Do you know how LPG gas plant works? I want to share with you an insider knowledge of how you too can setup a cooking gas plant. I will make it so simple that you will catch up fast.
At this point I would want to advise that starting an LPG gas plant is capital intensive. Don’t bother if you currently can’t afford the capital requirement. There are no short cuts. Although some people would still want to cut corner but please don’t. Remember the warning, don’t play with fire.
So, having heeded to that warning, let me go on to explain all you need to know about starting an lpg gas plant with this complete setup guide.
Although I have already written several helpful articles on starting this cooking gas plant business and it’s published on this blog. You will find of the article s very helpful in addressing different aspects of cooking gas plant setup process.
Introduction to LPG Gas Plant
In most of my articles I generally avoided the word LPG (Liquefied Petroleum Gas). I preferred the general one, which is Cooking Gas. It was to avoid question like what is LPG. But I’m glad it worked because everyone understands what cooking gas means, including children.
Also, in my LPG gas plant business trainings, of which I have currently trained over 500 entrepreneurs, I hardly use the word LPG. But everyone today knows that an LPG gas plant is a refill station where cooking gas cylinders are refilled. If you want to buy cooking gas, you don’t buy it at Shoprite, you go to an LPG gas plant.
And more of these LPG gas plants are quickly springing up all over the country, especially in the southern part of the country. But many of them are making grave mistakes that would cost them the market in the future.
How LPG Gas Plant Works
An LPG gas plant is located to serve and supply cooking gas to a specified location in a city or community. That restricts it’s functions to that location. And if it’s going to be successful the primary factor for that will still depend on that chosen location.
That means your biggest investment should be your location. But most entrepreneurs look for cheap lands to buy and that equally translate to wrong or inaccessible location. Until you can beat your chest and say this location is verified to be profitable, you shouldn’t even start your LPG gas plant there. And if you’re already operational you may need to also conduct this assessment.
Remember that even DPR approval is in two-fold. The first approval is the location even before your LPG gas plant is approved for building. And if you move to a new location you will do a fresh DPR approval because DPR still needs to be sure of the new location that it meets all regulatory conditions.
So, why you get your location approved by DPR, don’t forget that DPR is only interested in the safety of the people and not in your profitability. It’s your job to conduct a location assessment report to ensure your location will be profitable for your business.
LPG Gas Plant Success Secret
Most of the LPG gas plants are located outskirts of the city. That was partly caused by DPR (The Directorate of Petroleum Resources). That’s the body responsible for approving LPG gas plant locations across the country. They have offices in virtually every state capital. But for Delta state that office is still in Warri.
So, the secret of LPG gas plant is location. You can see that the current location of many of the existing plants are not favorable to the owners as new LPG gas plants starts springing up right inside the city population.
Of course these LPG gas plant owners would try to fight back and even by using price point as a weapon. But the cost of transport and weight of cylinders will push consumers to buy from the LPG gas plants closer to them.
Location Assessment Report
But there is a solution you can apply now when setting up your own LPG gas plant to avoid falling victim of DPR regulation. And that is conducting location assessment report.
Although this would cost you extra money but it’s worth all of it. A location report could be needed before purchasing a property for setting up of LPG gas plant. And after getting the land to verify the viability of the location. Or you can do both of them.
In LPG gas plant, DPR must approve your location before you can setup a gas plant there. The reason for this approval is because not every location is suitable and there are also certain nature of environment that you would not be allowed to set up an LPG gas plant.
And even after DPR approves or better still before you even buy the land in any location you need to do viability assessment report to avoid wrong investment. Some people skip this because of mere N350,000 but risk millions without verifiable report of its viability.
Action Points to Setup LPG Gas Plant
And if you have decided you want to setup an LPG gas plant then you need to follow these steps. I will break the process into just three parts that you need to follow.
That’s not to mean that’s all the process. I’m excluding business plan writing and location assessment report. I have already explained location assessment report. You can read through again above. However, for the cooking gas business plan, I have explained that one in another article on MyBlog. You can read it there.
You can also ORDER my PDF manual where I explained all the processes in more details. This PDF guide cost just N35,000 and you will get it instantly sent to your WhatsApp or email after confirmation of your payment. Call or Chat 07087770518 to ORDER IT NOW!
Step One: DPR Approval Processes
Approval for LPG gas plant is determined by DPR. And it’s based on size of the LPG gas plant, the size of the land and the location.
Cost is determined by DPR agents. It’s also based on the size of the LPG gas plant you plan to setup. And cost of the entire process can range between N2 million to N3.5 million.
Duration is till the duration of the setup. And DPR gives final nod to begin operation. That’s when you know it’s done. However, LPG gas plant requires annual inspection and renewal processes.
Step Two: LPG Plant Site Construction Works
Building an LPG site must also follow DPR specifications. You cannot just build the way you like. There are guidelines for construction of LPG gas plant site.
Below are some of the things to build. You can determine their cost by ordering for a design prototype. Designing a DPR specified building prototype for your site construction cost between N350,000 to N500,000.
- Office building
- Fire resistant fence
- Plinth construction
- Fire proof Filling shed
- General flooring
- Water borehole
- Electrical works
- Anything else as required by DPR regulation
However, you would need a design prototype to know what you want to build on the property. And appropriately cost the construction.
A good design prototype would take into consideration space management and complete cost of construction, including materials and labour. The design will equally follow all DPR requirement to make is possible for any construction engineer you may hire to build according to specification.
Step Three: LPG Plant Transportation & Installation
There are different sizes of LPG gas plant. The size you choose will determine the price you pay.
- LPG gas plant size ranges from recommended 2.5 metric tons size to 10MT complete brand new turnkey gas plant with digital dispenser. With a price range from N3.5 million to N19.5 million. And depending on your choice, you can go for used or brand new LPG gas plant. I strongly recommend brand new tanks.
- You should also budget for the Transportation of the LPG gas plant from builders yard to your already approved installation site. Depending on size and location, you may cough out as much as N700,000. Some builders transport free to your site, if they are the ones to also install it.
- Also the Installation of the LPG gas plant at your location may attract cost depending on who build and delivered the tanks. And you should be considering amount as much as N500,000.
Note: Duration is between 2 – 6 weeks.
LPG gas plant and cooking gas plant means the same thing. LPG is like the technical name for cooking gas. It simply means LIQUIDFIED PETROLEUM GAS.
And to setup the business of refilling LPG gas cylinders for cooking follows regulatory process, under the supervision of The Directorate of Petroleum Resources, popularly known with the abbreviation DPR.
However, the most important aspect of setting up an LPG gas plant is the location. And I have prescribed a compulsory location assessment report before you consider investing million in setting up your own LPG gas plant.
ALSO READ: How to Package A Cooking Gas Business Plan