Investing in liquefied petroleum gas filling plant

Introduction/justification

Nigeria is one of the major producers of Crude Petroleum Oil in the World producing on the average over 2 million barrels daily of the organization of Petroleum Export Country (OPEC) production quota.Gas which is by-product from petroleum sector is in abundant supply in the country.

With the existence of the four refinery plants in the country, sourcing of the raw material (gas) is guaranteed.

There is also a greater prospect of increasing the number of refinery plants in the country considering the intensified oil findings and exploration in the country.

The market for Liquefied Petroleum Gas is very vast and wide.

It is being demanded in almost every home, Hotels, Canteens, Catering Centres and Industries are also parts of the market.

Considering the population figure of the country and the number of households, hotels, canteens and catering centers, there is no doubt that investment on this project is a right investment.

The market for Liquefied Petroleum Gas filling plant is widening daily because of the increasing awareness of our people to be changing with the modern changes by demanding for gas cookers in place of kerosene stoves, fire woods, charcoal and any other cooking device.

Another justification for this project is the profitability attached to it.

Annual net income of N24 million is guaranteed; the internal rate of return is above 50 percent and the benefit/cost Ratio is above one.

Other benefits attached to this project is employment generation, optimal utilisation of resources because we flare away gas everyday in Nigeria during the course of petroleum refining.

Technical information

To establish a gas filling plant, an appropriate site has to be procured.

The site should not be in residential area.

Gas filling equipment with storage tank have to be sourced and installed.

Liquefied Petroleum Gas tank attached with truck has to be purchased to bridge the product from Refineries to the filling plant.

A prospective investor will have to get registered with the Department of Petroleum Resources (DPR) to obtain necessary approvals including license to lift petroleum products.

Investors can be assisted along this direction.

Liquefied Petroleum Gas Filling involves lifting of the product from refineries and dumping it at the filing station.

It is at the filling station that you now fill into gas cylinders of 12.5 kilogram, 25 kilogram, 50 kilogram and 100 kilogram depending on the need of customers.

The project can readily be supported by banks as it is commercially viable and technically feasible.

A well-packaged feasibility study is a pre-requisite to finance sourcing from banks.

This can be provided to serious minded prospective investors.

Profitability analysis.

For every kilogram of gas filled, a profit margin of N20 is achievable, An aggressive gas marketer can fill up to 2 million kilogram in a year.

N40 million profit is therefore achievable annually.

Investors can be assisted in the establishment of this project.

OLUMAKINDE ONI