NNPC Ltd Expands LNG Supply to Japan and China, Strengthening Global Market Presence

The Nigerian National Petroleum Company Limited (NNPC Ltd) has made a significant move in its strategic vision to become a leading global energy supplier by beginning shipments of Liquefied Natural Gas (LNG) to Japan and China on a Delivered Ex-Ship (DES) basis.

The milestone was achieved through the collaboration of NNPC Ltd's Downstream subsidiaries —NNPC LNG Ltd and NNPC Shipping Ltd. The first DES LNG cargo, transported aboard the 174,000m³ vessel Grazyna Gesicka, was successfully delivered to Futtsu, Japan, on June 27, 2024. Building on this success, NNPC Ltd has expanded its reach to China with a subsequent DES LNG cargo delivery.

The DES model, which requires the seller to handle shipping and insurance until the cargo reaches the destination port, demands a high level of expertise and operational efficiency. The approach marks a shift from the Free on Board (FOB) system, where the buyer assumes responsibility once the cargo is loaded.

Since it entered into LNG trading in November 2021, NNPC Ltd has completed over 20 LNG cargo trades in the European and Asian markets, initially on an FOB basis. The recent expansion to DES deliveries in Japan and China underscores NNPC Ltd's growing capabilities and commitment to expanding its global market footprint.

Commenting on the development, the Executive President, Downstream, Mr. Dapo Segun, 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”.

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

“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”, Managing Director of NNPC Shipping, Panos Gliatis, enthused.

NNPC LNG Ltd, in collaboration with NNPC Shipping Ltd, is scheduled to deliver at least two more LNG cargoes to the Asian market on DES basis by November. Many more orders are expected before the end of year.