Business a.m.
A landmark agreement between the Nigerian National Petroleum Company Limited (NNPCL) and its downstream subsidiaries, NNPC LNG Ltd and NNPC Shipping Ltd, has paved the way for the shipment of Liquefied Natural Gas (LNG) cargoes to Japan and China, on a Delivered Ex-Ship (DES) basis.
The development was communicated by Olufemi Soneye, the official spokesperson for NNPCL, in a statement released recently.
According to the statement, the cooperation between NNPCL and its subsidiaries yielded immediate results, as the first delivery of 174,000 cubic metres of LNG cargo from the LNG vessel Grazyna Gesicka was received at Futtsu, Japan, on 27th June 2024.
Soneye further disclosed that the company’s footprint in the Asian market has expanded following the successful delivery of another LNG cargo to China on a DES basis
“Delivered Ex-Ship (DES) is an international commercial term that requires the seller to deliver the products/goods at a specific port.
“The seller takes responsibility for the shipping and insurance for the products/goods until they get to the specified port of delivery. It requires expertise and a higher level of efficiency to execute than the Free on Board (FOB) system,” he stated.
According to Soneye, NNPCL’s LNG trading activities have been in full swing since 2021, with the company’s maiden LNG cargo sale occurring in November of that year. Since then, the company has successfully traded over 20 cargoes to both the European and Asian markets on a Free on Board (FOB) basis.
Commenting on the development, Dapo Segun, the executive vice president of downstream, said, “The DES system, apart from being more financially rewarding, allows NNPC Ltd. inroads into the downstream segment of the LNG sector and positions it to capture more market shares while building in-house capacity and ensuring that global customers are familiar with the NNPC Ltd. brand.
On his part, Panos Gliatis, managing director of NNPC Shipping, remarked, “NNPC Shipping intends to build a shipping portfolio (including owned vessels) so that we can provide our sister company and other clients all the shipping flexibilities they need.”
