Liquefied petroleum gas, commonly referred to as LPG, is used as a fuel in heating appliances and cooking equipment. The widespread use of LPG in Nigeria presents ample opportunities to make enormous profits. There are over 15 LPG business opportunities. Read on.
How to start an LPG business in Nigeria will be discussed below:
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What are the Types of LPG Businesses in Nigeria?
The LPG business encompasses several aspects including:
- LPG distribution: transportation and distribution of LPG from source to end users.
- LPG retailing: setting up retail outlets for the sale of LPG to end-users
- LPG cylinder manufacturing: production of LPG cylinders.
- LPG cylinder distribution: distribution of LPG cylinders to retail outlets and end-users.
- LPG pipeline construction: construction of pipelines for the transportation of LPG from the source to the end-users.
- LPG equipment manufacturing: production of equipment and accessories needed for the storage, transportation, and use of LPG, such as valves, regulators, and hoses.
- LPG conversion: This involves the conversion of vehicles and other machines to run on LPG.
- LPG export:
- LPG consultancy: providing consulting services to individuals and organizations on LPG production, distribution, and utilization.
- LPG safety training: providing safety training to individuals and organizations on the safe handling and use of LPG.
- LPG research and development: conducting research and development activities to improve the production, distribution, and utilization of LPG.
- LPG storage facilities: This involves the construction and operation of LPG storage facilities.
- LPG marketing and branding: creating and promoting brands for LPG products and services.
- LPG financing: providing financing and investment opportunities for LPG businesses and projects.
- LPG regulatory services: providing regulatory and statutory compliance to ensure strict adherence to safety codes.
From all these aspects of LPG business in Nigeria, this article will focus on discussing just three, which include:
- LPG refilling plant
- LPG cylinder plant
- LPG storage plant
These LPG business options require government approvals or licensing to begin, however, as you read on, you’ll
get guidelines on how to go about it.
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How to Start an LPG Refilling Plant in Nigeria
The LPG refilling gas plant tops the list as the most lucrative of the three options mentioned above. However, this LPG business requires a substantial amount of initial investment.
This LPG business option can cost N10 million to over N30 million to set up, depending on the scope of the business.
Just like every other LPG business that will be discussed in this article, the LPG refilling plant requires the services of a consultant to assist in the setup process.
Hiring a consultant to help with the setup process will help you avoid gigantic mistakes that can cause you to lose money.
After you’ve gotten a consultant involved in the process, you’ll need to apply for approval from the Department of Petroleum Resources (DPR) before you can proceed to the next step.
Following approval by the DPR, you’ll need to get a space in a commercial location. Depending on your budget, you could buy the land or lease it.
When you’ve got the land, the next line of action is to construct an LPG plant according to the approval of the DPR. This is why the consultant comes in handy as he would connect you with experienced professionals to help with the construction of the site.
Remember, after you’ve constructed the LPG plant, you’d need to have some extra cash as operation capital to buy LPG and hire staff.
The staff you should hire are those conversant with operating an LPG gas plant.
Conclusively, as this LPG business option is quite capital intensive, you’d not have much competition, thereby presenting the opportunity for more sales.
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How to Start a Gas Cylinder Plant
A statistic found online revealed that over 30 million Nigerian households have no access to LPG. This figure shows that engaging in the business of manufacturing cooking gas cylinders is a lucrative venture to invest in.
To start this business, you’d need to first be approved by DPR and other authorities. And these approvals have attendant quality assurance expectations to be met to ensure maximum security.
As required, ensure to work hand in hand with a consultant to guide you through the process of setting up a cylinder manufacturing plant. This is to ensure that guidelines are followed religiously while setting up the LPG cylinder plant.
Depending on the scope of the LPG cylinder plant, it is possible to manufacture over a million cylinders annually, including cylinders for domestic and industrial uses.
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How to Start an LPG Storage Plant
Another aspect of LPG business you can invest in, in Nigeria is the LPG storage plant. This aspect of LPG business involves storing liquefied petroleum gas in pressure vessels (above-ground or subsurface).
However, before you can start an LPG storage plant, you would need certain approvals, especially from the Department of Petroleum Resources (DPR). With the approval to operate an LPG storage plant granted, you would need to adhere to the laid down guidelines to ensure maximum safety.
To ensure quality assurance, it’s recommended to hire a consultant to walk you through the process. The minimum size of the space used for an LPG storage plant is dictated by state and federal authorities. Typically, there should be ample tanks around the tanks to allow for adequate airflow as well as the absence of weeds and grass near the tanks.
Another physical planning feature the gas storage plant should have is a designated level parking place for the tanker transporting it. And drivers of tankers transporting the LPG gas must be verified to ensure top expertise.
The security of the lot, siting of the tank, impact protection for tanks, arrangement for an emergency, and other quality assurance guidelines should be carried out in their entirety to ensure the facility meets top ratings.
When the LPG storage plant is set up eventually, you get to enjoy supply from major marketers, and in turn, partner with bulk buyers, and freelance marketers in Nigeria to supply them with LPG.
It is important to note that only experienced staff should be hired to work in the LPG storage plants.