Hello Pals,
Over the last couple of weeks, there have been kind words from entrepreneurs and investors on how our articles have been expanding their knowledge base about the African Gas Industry using Nigeria as a focus. They are really keen on action steps to take if they want to proceed with investment in the sector. This is what is forming the basis of our article today, to show you how Kiakia Gas Limited helps you make sound business decisions and guide you through the hurdles of investing in the Nigerian LPG Industry.
It is a known fact that Liquefied Petroleum Gas (LPG) is used worldwide for cooking, but to a lesser extent in most developing countries. LPG is a non-renewable fuel. However, it is widely acknowledged that use of LPG has few documented negative health effects compared to cooking with firewood and charcoal. Demand for firewood and charcoal as a source of cooking energy is one important driver for deforestation in Sub-Saharan Africa. Increased use of LPG is considered as one of several possible ways to relieve the pressure on forest resources. Biomass based cooking is also a source of both climate gas emissions and indoor pollution from black carbon. Reduced reliance on forest biomass for cooking could contribute to reducing greenhouse gas emissions from land use, land-use change, and forestry (LULUCF). Reducing the need for biomass for cooking also has potential to reduce time use for and various risks associated with firewood gathering which is a significant burden on women and children in rural areas. Use of wood fuels for cooking also has significant negative effects on health due to the exposure to smoke in particular in indoor settings, which mainly impacts women and girls, which could be eliminated or reduced through switching to clean cooking fuels such as LPG.


As you walk across Nigeria today, you will observe a new trend of LPG plants popping up all around in petroleum filling stations, small land spaces, Major Plants, Bulk terminals are coming up, increased number of LPG trucks on the road and many write-ups are littered across the internet about the LPG industry, this is as a result of many individuals that are shifting from kerosene and to using cooking gas. The major challenge for the old and new consumers of gas is the fact that the gas plants are not close enough for them which creates a vacuum which entrepreneurs can take advantage of and create value in the sector by brings gas closer to the consumers.

The LPG industry in Nigeria has a value of NGN152 billion ($500Million) with less than 10% already being harnessed. Nigeria is at that point we were in the 1970's when the populace made a massive switch from firewood to kerosene stoves because it was the most convenient domestic fuel at that time. The market for LPG for cooking in developing countries is increasing in several countries, but without targeted support the uptake happens primarily among urban and relatively wealthy parts of the population. Various barriers for uptake imply limited market-based development among the poor and in rural areas, where the majority of the population still lives. Even in households who use LPG, LPG is often used only for part of the cooking (fuel stacking), rather than completely replacing other energy sources.
National governments and the international community have to date implemented a range of interventions to contribute to improved cooking technology in developing countries. However, compared to other parts of energy sector development assistance, the efforts in this area have been insignificant, and in particular LPG has received little attention by the traditional bilateral and multilateral donors. The clean cooking promotion efforts have only in some countries overcome the key financial, economic, technical, logistical, and sociocultural barriers to transition.

Starting Out a Sizing LPG Facility for Investment Purposes
The sizing LPG facility for investment purposes consists of depot operations and distribution logistics operators that oversee the bulk delivery of cooking gas from depots to retailers.

1. Understand what sizing LPG Facility for Investment is
Sizing LPG facility for investment into Bulk sales involves mediating between Gas depots, and retailers. This puts bulk sellers somewhere in the middle of the cooking gas supply chain. It is critical to grasp the idea of the bulk sales of cooking gas business plan before allowing your thoughts to weave the full strategy.
Bulk sellers of cooking gas are companies who buy cooking gas in large amounts directly from distributors or depots and then sell it in smaller quantities to retailers or end users. Sellers of bulk cooking gas market their products to other businesses. This means that their purchasers aren't the end users, but rather the shops and other businesses that the users buy from. Because bulk cooking gas vendors buy in bulk, they often receive unique discounts and lower pricing overall.
2. Why Start Sizing LPG Facility for Cooking Gas distribution?
Any business might be difficult to start, but the cooking gas bulk distribution business is one that can be started with fewer hurdles. Cooking gas bulk distribution is profitable, and despite its relatively medium capital requirements, it is a relatively simple business to start.
The fact that the industry in Nigeria is growing rapidly and is not seasonal is one of the elements and incentives that inspire aspiring entrepreneurs to enter the business.
So, if you've decided to create a distribution company, make sure you conduct rigorous feasibility and market research first. When it comes to starting your own cooking gas bulk distribution business, a business plan is another crucial document that you should not overlook.
3. Tips for Sizing LPG facility for Investment
Business Feasibility Intelligence Report. Our business feasibility report is a must have if you must succeed and make a fortune in this business. The report is a quarterly updated working intelligence document that will be updated to you once you subscribe to help you keep in touch with current realities on ground and help you make decisions that would guide your business to profitability. The Plan includes:
Business Overview
Marketing Plan
Production Plan
Organizational and Management Plan
Financial Plan
Risk Analysis and SWOT analysis
Quarterly business intelligent update
For those that do not have the money now to start up, the plan is a must have when seeking for a loan from any bank in Nigeria or attract investors.
LPG Plant Variations. LPG Retail Plant Sizes that Kiakiagas in collaboration with our foreign technical partners can set-up for you
2.5tonnes mini plant:
5 tonnes mini plant:
10tonnes Mini plant:
20-100tons stationary plant
100-500 tons stationary plant
THE PPEs that comes with the Facility:
1. LPG tank
2. LPG fire proof Pumps
3. Filling Heads customized for the Nigerian Market
4. Weighing scales
5. Pressure gauge
6. Return Hose
7. Fire extinguishers
8. Safety Overalls
9. Safety boots
10. Safety gloves
11. Safety goggles
13. Safety caution signage’s
14. Free HSE training on how to manage the plant
15. Free haulage to anywhere in Nigeria
LPG Operating and Trading License
Our extensive network with DPR and other regulatory agencies enables us secure operating licenses for you to trade LPG in the quickest possible time.
A working website. Having a website that enables for bulk sales of cooking gas pricing is a must.
Set incremental sales. This includes setting targets for each quarter of the year in order to maintain a consistent growth rate. For example, if your firm is centrally located and has an effective and dependable distribution network, you will always attract gas retailers and generate more sales, which will inevitably lead to an increase in income generating.
Relationship with Supplier. Your strategy is determined by your relationship with the cooking gas supplier. The price that your supplier will exclusively offer will determine whether you prioritize profit or volume. These suppliers could be operators of LPG Process Plants, Refineries, LNG plant, LPG refill plants, etc
Deliverable Team (DT). Create an A-team to assist you in managing the complexities of a wholesale operation. Managing supplier relationships, establishing new customers, tracking inventory and gas stock, purchasing, estimating, billing, and financial reporting are all part of this process.
Cash flow. You will be working with a big number of gas retailers as a gas bulk seller, each with their own payment arrangements. Consider what terms you can acquire from your suppliers and try to extend them as much as possible to offset the conditions you will have to give your gas retailers.
Marketing and product training. Cooking gas does not sell itself; you must consider how you can help your gas retailers through marketing, promotional activities, and product training to ensure that your gas retailers are doing everything possible to sell your product to their end customers.
Payment Option. Because it is well known that different gas retailers choose different payment alternatives as it suits them, the payment policy to be applied for cooking gas bulk sales must be clearly defined.
4. Acquiring Assets for Sizing LPG facility for Bulk distribution Business
LPG is usually transported from place to place under pressure using tank car, tanker ship, transport truck and delivery trucks known as bobtails. The size of an LPG transport tank ranges from11,000 gallons and a bobtail is typically around 5,000 gallons.
Bobtail road tankers are mounted transportation tanks used often for the distribution of LPG to customer (domestic and industrial). Common manufacturing standards are: ADR, TOED, EN 12252 and EN12493.
The standard sizes for bobtail trucks are as follows:



Bobtails usually come with a delivery pump but LPG meters are often optional.
Bobtails that come with a meter can undertake the following tasks:
LPG transfer through the meter and hose reel,
LPG transfer through the pump and the hose reel,
Unloading through the pump, but not the meter,
Transferring LPG from other tanks, into a different tank.
Things to Consider When Acquiring a Bobtail
Vehicle safety
Ride quality
Self-eliminating of operator faults
Operational Reliability
High Performance
Durability
Total Economy
Health And Safety Operators And Other People
Environmental Impact
Regulatory Compliance with the DPR
Bobtail Tank Accessories – Standard:
Safety Relief Valves
Loading and Unloading Connections
Safety systems
Internal valves, pneumatic operated & with excess flow feature
Level gauges
Equipment cabin made of metal, with long-life and ergonomic design
Anti-tow-away system
Earthling rod
LPG Pump
Hydraulic drive
Electric Drive
Shaft Drive
Fire extinguisher
Reflectors, Safety marking and labelling
Bobtail Accessories- Optional:
Hose reel, liquid, vapour or both
Electric power rewind
Hydraulic power rewind
Pneumatic power rewind: Hose fixture, rust-free
LPG Meter and ticket printer
Hydraulic operated internal valves
Selector
Remote emergency stop



5. Budget for an LPG Bulk Distribution Business
S/N
Item
USD $(20mt: One truck)
N(20mt: One truck)
1
Cost of 20 tons at the depot in APAPA
23,529.21
9,800,000
2
NUPENG Dues at the Depot
74.43
31,000
3
COST (DEPOT GATE)
14,239.98
5,931,000
4
Cost of Logistics to Gas Plant
1,128.44
470,000
5
Cost of LPG in Lokogoma per kg
9.60
4,000


Total
38,982
16,236,000

*As at the time of this report, subject to change as economic variables change
Nb: All prices are Datapitch index prices
6. Why This Is Your Best Investment Option
• You own your business
• Your plant is branded in your company Name
• Very low operational cost
• Kiakiagas maintains the plant for you
• Safe and Secure
7. Our Integrated After Sales Support
• Management tools (OMS, Gas Sales stock Tracker) to successfully track and run business to make it a profitable
• Full in-house sales support
• Routine Maintenance on the plants
• Steady Supply of Gas to the plant at best competitive prices
• Quarterly HSE and Management Training
• All year round business support and free consultancy
8. OUR PROMISE
• 21 days delivery time
• No additional charges (it’s a turnkey project)
• Dedicated customer service
• Cheerful training staff
• Assurance and quality check.

This ebook is published by Kiakia Gas Limited. We are a leading Clean Energy Solutions provider based in Lagos, with expertise in Nigeria and Africa. Kiakia Gas provides services such as Engineering, Procurement, Construction, Consulting, amongst many others.
Get to know us more: +2348187784000, advisory@kiakiagas.com
Facebook:Kiakiagas.com
Instagram:@kiakiagas
Twitter: @kiakiagas