Business & Investment

How to start a gas plant in Nigeria

In this post, I will show you how to start a gas plant in Nigeria and make money from it. After reading this article, you will see the requirements to setup a cooking gas filling plant. This article is a mini cooking gas plant business plan that you can use to plan on how to start it.

Liquefied Petroleum Gas (LPG) has come to be an increasingly popular source of cooking fuel for Nigerian homes. This is mainly because kerosene is either not available or it is too expensive.

Another reason that is currently driving the demand for LPG as a cooking fuel is the fact that it burns cleanly, does not leave you kitchen all smoky and also does not leave a bad smell behind. People who are in cooking gas refilling business in nigeria buy gas from a gas plant and resell to their customers.

How to start a gas plant in Nigeria
An engineer setting up a gas plant in Nigeria. Photo Source: nairaland.com

Another thing to note is that the government currently encourages people even in the rural areas to focus more on using LPG for cooking instead of using firewood. This is because the apart from the fact that using firewood is a major cause of deforestation, it also poses health challenges to those who use it as cooking fuel.

See How to Stop Deforestation in Nigeria

All these points highlighted goes to show why the demand for LPG as a coking fuel is currently on the rise and could potentially be on the rise for a long time to come.

Apart from homes, LPG is also an important fuel that is used for firing in industries.

It is very obvious that this business is quite a lucrative one. However, this does not mean that you can just jump into it without making adequate plans and expect to be successful. That is the reason for this write up. The intention is to guide you on how best to start this business.

Some of the points to note are;

LPG gas plant design 

Just like starting a petrol filling station, a good cooking gas plant design is required. LPG gas plant design and construction is done by certified companies. They have the experience in building a complete gas filling and delivery station.

A good gas plant construction companies should offer the following services;

1. ×××× metric tonnes tank
2. Corken Fire proof ump
3. Manuel or Automatic filling systems
4. Weighing scale and pressure gauge
5. Return Hose
6. fire extinguisher
7. Safety goggles, boots and overall
8. Branding
9. HSE training
10. Free Haulage anywhere in Nigeria

Best Location to Setup a Gas Plant in Nigeria

As with any business venture, the location of your gas plant is very key. In the case of this one, it is most peculiar. A good place to locate your gas plant is in proximity of a sprawling residential area.

This is to ensure that you are not too far away from your target market. You do not want your customers to have to travel unnecessarily long distances to reach your business place.

Despite the fact that you should have proximity of the target market in mind, do not forget that you are dealing with a highly inflammable product. Hence you must also ensure that your intended location is not surrounded by residential buildings.

In Nigeria, all state governments have departments that have the responsibility of ensuring that such businesses are located where they will not be a hazard to the people. Typically, a gas plant in Lagos will make a lot of money because of the population of people there.

In a nutshell, while you are picking a location, ensure that it is not too far away from residential areas but also check with the authorities to make sure that you are also not too close.

See: Businesses You Can Do in School

Register Your Business

As we have always reiterated in this forum, it is most important to register your business with the corporate affairs commission (CAC). This is because it is in line with the laws of Nigeria. Failure to do so will attract some very stiff penalties from the authorities and in some cases, criminal charges.

In order for you to be seen as running a legitimate business, it is important to do this.

It is also very important for you to find out if there are other bodies you have to register with apart from the CAC. For example, in the case of an LPG plant you also have to get permission from the department of petroleum resources (DPR).

You should also find out if there are any location specific registration that has to be done. This is because in Nigeria, various states have their laws and requirements for you to be permitted to do business in their state.

See How To Register a Business

Build Your Infrastructure

After selecting your location and registering your business, it is now time to set out about raising up your building.

For a gas filling plant, you will need a bulk storage bottle. This is where you will store the gas you have bought in large quantities. It is from this storage bottle that you will then retail to your customers.

You will also need to build an open refilling bay. This has to be open because the accumulation of LPG is both poisonous and highly explosive. There is need for constant flow of fresh air to your refilling area.

Read Also: Capital Needed to Set Up a Petrol Station in Nigeria

There is also the need for you to build a small office where administrative and cash transactions will take place. A small room will normally suffice for these purposes.

For the filling mechanism, various technologies exist. One way to do business is to collect empty cylinders from your customers and give them a refilled one.

Another way is a more high tech approach where customers can come to pay for the quantity of gas they want in kilograms (KG) and you deliver this to them. In this approach, you will need expensive high tech weight sensing equipment to monitor the gas being dispensed. The down side of this system is the cost. You will need quite a substantial amount to purchase the pumps and digital weighing systems.

Cost of building an lpg plant

Cost of the mini plants varies depending on the tank size and design. (Please call or email & request for our product Catalogue

This is the most Affordable plants cost :

Pneumatic System
● 2.5ton mini plant : N4million
● 5ton mini plant: N8million

Electronic System
● 2.5tons mini plant: N6million
● 5tons mini plant: N11million

If you don’t have the capital to build a full fledged gas plant, you can build a mini lpg filling plant in Nigeria with low filling capacity and still make money from it.

Employ Skilled Staff

This is quite important. You will definitely need some staff, both skilled and unskilled to help you to run your business adequately.

At the minimum, you should employ a security guard, secretary / accounts officer and a technician to handle the refilling process. If you have the time in your hands, you can take up some roles.

Advertise Your Business

There is no use setting up a good business and not letting the world know about it. The importance of advertisement to a business cannot be over emphasized. You can make use of flyers and posters to spread the word about your business.

See How To Advertise in Nigeria

Seek and Acquire Knowledge

You must always be willing and ready to seek more information about new trends in the business. It is also important that you monitor the market trends so that you can prepare yourself for any eventuality.

Take Safety Very Seriously

As you set about this business, do not forget that you will be dealing with very inflammable products. NEVER take any safety precaution for granted. Ensure that you have bold and conspicuous warning signs to alert both staff and customers of the fire hazard that exists within the premises.

Discover: 50 Facts About The Nigeria Liquefied Natural Gas (NLNG) Ltd In Bonny Island, Rivers State

Make sure you have fire extinguishers handy in your premises. Also ensure that your staff are well trained on how to operate then in the event of any emergencies.

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Ikponmwosa Aikhionbare

Ikponmwosa Aikhionbare is a Content Developer at InfoGuideNigeria.com. InfoGuide Nigeria is a team of Resource Persons and Consultants led by Ifiokobong Ibanga. Page maintained by Ifiokobong Ibanga. If you need a personal assistance on this topic, kindly contact us.

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