The Nigerian National Petroleum Corporation (NNPC) Limited has initiated Liquefied Natural Gas (LNG) exports to the Asian markets of China and Japan.This development was announced by the company’s spokesperson, Olufemi Soneye, in a statement released on Monday in Abuja. Soneye elaborated that the LNG shipments to these Asian nations were carried out on a Delivered Ex-Ship (DES) basis.
Delivered Ex-Ship (DES) is an international trade term where the seller is responsible for delivering the goods to a specified port, including the costs of shipping and insurance, until the goods reach the designated port. “In alignment with its strategic goal to become a dynamic and reliable global energy supplier of choice, the Nigerian National Petroleum Company Limited (NNPC Ltd.) has commenced the shipment of Liquefied Natural Gas (LNG) cargoes to Japan and China on a Delivered Ex-Ship (DES) basis.
“NNPC Ltd. achieved this milestone through the collaboration of its two Downstream subsidiaries – NNPC LNG Ltd. and NNPC Shipping Ltd. – which delivered its first DES LNG cargo from the 174,000m³ LNG vessel, Grazyna Gesicka, at Futtsu, Japan, on June 27, 2024. “Since then, it has expanded its reach to China, delivering another LNG cargo on a DES basis,” he said.
Further Insights Soneye also noted that NNPC has been engaged in LNG trading since 2021, with its first LNG cargo sale occurring in November of that year. Since then, NNPC has traded over 20 cargoes into European and Asian markets on a Free On Board (FOB) basis. Commenting on this development, the Executive Vice President of Downstream, Dapo Segun, said:
“The DES system, apart from being more financially rewarding, enables NNPC Ltd. to penetrate the downstream segment of the LNG sector, positioning it to capture more market share while building in-house capacity and ensuring global customers recognize the NNPC Ltd. brand.”
Additionally, NNPC Shipping Managing Director Panos Gliatis highlighted that the collaboration between NNPC LNG Ltd. and NNPC Shipping Ltd. in executing LNG deliveries on a DES basis has solidified NNPC Shipping’s status as a world-class provider in the LNG shipping sector.
“NNPC Shipping aims to build a shipping portfolio, including owned vessels, to offer our sister company and other clients the shipping flexibility they need,” Gilatis noted.
Key Points to Note Nigeria’s ongoing transition from oil to gas in its energy sector has been driven by its vast gas reserves, which surpass its crude oil reserves. This strategic shift has gained momentum under President Tinubu, who has issued new executive orders to strengthen the gas industry. As part of these efforts, President Tinubu recently inaugurated three gas plants in Delta and Imo States, aiming to boost the country’s gas production by at least 25%.
Moreover, NNPC has entered into a significant agreement with Golar LNG, a North American company, to establish offshore Liquefied Natural Gas (LNG) production in the Niger Delta.
This Project Development Agreement (PDA) will utilize approximately 400-500 million standard cubic feet per day (mmscf/d) of gas, with plans to produce LNG, Liquefied Petroleum Gas (LPG), and condensate within the country.
