NNPC commences shipments of LNG to Japan, China

The Nigerian National Petroleum Company (NNPC) Limited says
it has commenced the shipment of liquefied natural gas (LNG) cargoes to Japan
and China on a delivered ex-ship (DES) basis.

Delivered ex-ship (DES) is an international commercial term
that requires the seller to deliver the products or goods at a specific port.

The seller takes responsibility for the shipping and
insurance for the products or goods until they get to the specified port of
delivery.

According to a statement on Monday by Olufemi Soneye, chief
corporate communications officer at NNPC, this is in line with its strategic
vision to be a dynamic and reliable global energy supplier of choice.

NNPC said this milestone was achieved through the
collaboration of two of its downstream subsidiaries – NNPC LNG Limited and NNPC
Shipping Limited – which delivered its first DES LNG cargo from “the 174,000m³
LNG vessel, Grazyna Gesicka at Futtsu, Japan, on June 27”.

“Since then, it has expanded its footprint to China with the
delivery of one LNG cargo on DES basis,” NNPC said.

NNPC said it has been involved in LNG trading since 2021,
with its first LNG cargo sale occurring in November of that year.

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The national oil company said since then, it has traded over
20 cargoes into the European and Asian markets on free on board (FOB) basis.

In a FOB transaction, the buyer assumes all risk once the
seller ships the product.

Speaking on the development, Dapo Segun, executive
vice-president of downstream at NNPC, said the DES system is more financially
beneficial and enables NNPC to expand its presence in the downstream segment of
the LNG industry.

“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,” Segun said.

Also, commenting on the transaction, Panos Gliatis, managing
director of NNPC Shipping, said the shipping arm of the national oil company
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”.

The statement said the collaboration between NNPC LNG and
NNPC Shipping in executing the LNG supplies on a DES basis has strengthened
NNPC Shipping’s position as a world-class shipping provider in the LNG sector.

NNPC said both companies are scheduled to deliver at least
two more LNG cargoes to the Asian market on a DES basis by November, with more
orders expected before the end of the year.

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