business plan for lpg plant

LPG Business Review

Weather forecast, operating and setting up an lpg plant in nigeria: an interview with teryima denen toryila.

Tell us about your journey towards the LPG industry.

After the compulsory 1 year of national service, I began my career in the telecommunications industry with Celtel Nigeria, where I was involved in the coordination and supervision of retail activation programs as well as the sales and distribution of SIM cards. I moved to the air conditioning industry as a HVAC engineer for Technoton Limited where I was involved in a lot of engineering projects and gained increased knowledge on gases. Thereafter I moved to Banner Energy, where I worked as an Engineer on its LPG projects.

I joined Oando Marketing, one of Nigeria’s leading indigenous downstream companies (now known as OVH Energy Marketing) as an LPG Development Officer tasked to provide market intelligence and develop new business channels for its LPG sales. Having made significant impact in the business, I transitioned to becoming the LPG Technical and Operations Supervisor where I coordinate LPG plant projects, oversee plant operations, and monitor strict adherence to health and safety practices across the company’s 18 LPG plants nationwide.

What is your most notable experience/achievement?

I have had several notable accomplishments in my career; probably my most notable achievement was my first LPG engineering project when I had to install 10 LPG plants comprising entirely new systems (that I had little or no clue about), new (first of its kind) in Nigeria at that time. I had approximately 2 days to prepare before mobilizing to site, so I spent that entire time studying the systems and manuals amidst high expectations from my employer to deliver on the project within very close time lines. I successfully delivered on the project and have gone on to deliver on over 20 LPG projects since then.

Setting up an LPG Plant:

What is the timeline for setting up an LPG filling plant in Nige ria? (From the planning phase to operation)

The timeline for setting up LPG plants differs; it typically takes about 2 years depending on the approval process. Let me walk you through the approval process for better understanding. One needs to go through town planning approval, followed by an Environmental Impact Assessment (E.I.A.) of the site. Nigeria typically has 2 seasons in a year – the wet (rainy) season and the dry season; the EIA must be conducted for both seasons. Then you get a fire department approval, acquire a police report, and commence full engineering, design & procurement assessment which will be submitted to the Department of Petroleum Resources (DPR), along with a written application and all documents mentioned earlier. DPR will visit the site to be sure it fulfils all requirements for the construction of an LPG plant. Should the site meet these requirements, DPR will approve and issue you an Approval to Construct (ATC).

Once approval is given, you can then commence the equipment acquisition and site construction. The Department of Petroleum Resources (DPR) will visit the site once construction is complete for inspection and certify the design is consistent with proposed plans submitted. They will also witness and sign off on all integrity tests conducted at the plant; following which an operating license will be issued. The process takes about 2 years or more end-to-end. The integrity of the plant itself is a function of the competency and technical capability of both the client and the contractor.

The requirements enumerated above do not preclude foreign investors. It’s a standard operating procedure for both local and foreign investors. For investors, it is imperative they partner with local experts with good industry knowledge, technical knowhow and experience; and who is also versatile with the relevant stakeholders.

What does it cost to set up an LPG plant in Nigeria? The standard/ stipulated fees vary depending on the size of the facility amongst other sundry expenses. A breakdown of the estimated costs would be:

Town Planning Approval : N200,000 (USD656.28)
Fire Service Approval: N100,000 (USD328.14)
Police Report: N50,000 (USD164.07)
Environmental Impact Assessment (need to engage a consultant, depends on consultant and must be a ministry of environment certified consultant – function of location – this could typically cost you (N2 – N5 million) (USD6562 – USD16407)
DPR Approval: N20,000 per 100MT capacity (e.g. 200 MT – 40 thousand Naira) (USD131.26) All in all, without the environmental impact assessment, it will cost roughly around half a million Naira for all the approvals. When looking at construction costs, the major expense comes from equipment which are imported from Europe and America, but in more recent years, a large amount comes in from Asia and this would cost something in the neighbourhood of about N250 million (USD820,347 )for everything.

What does the LPG distribution network in Nigeria look like? (Where does the plant get its gas from and how is it distributed from there) How do Secondary Distribution Points fit into the mix?

Nigeria is one of the largest producers of LPG in Africa. The NLNG plant on Bonny Island produces significant amount of LPG but was designed primarily for exports. It was expected that the local refineries would meet local demand but unfortunately, that is not the case. So, this means the NLNG plant is required to provide for local demand as well. (The NLNG plant is located off the coast of Port Harcourt Nigeria with most storage facilities in Lagos).

Currently Nigeria has an 8000 MT and 4000 MT storage (the 4000 MT has recently been expanded to 9000 MT), another 1000 MT and 4000 MT which would make it all in all about 25000 MT worth of LPG storage capacity in Lagos. Recently another 10,000 MT storage facility was completed in December 2016 in Calabar. There is also another 8,000 MT facility on verge of completion at Port Harcourt. Most of these storage facilities are coastal storage facilities, so when the vessel brings the LPG from NLNG facility, they are docked in Lagos and then from Lagos it discharges the LPG into these facilities, which are then loaded onto road tanker trucks which distribute the gas across the country.

We are thinking that the dynamics should change within a year or so with new coastal facilities that will come online in Calabar and Port Harcourt, hopefully, they will be receiving more vessels in the other parts of the country as well.

In-country distribution via the road network in Nigeria is not so ‘beautiful’, it’s not like you have in Europe and America, it’s a different terrain. Most of the LPG distributed must go by road and it is a real challenge. We have a lot of inland storage facilities in Nigeria, most of them are of 1000 MT storage capacity and not connected by pipeline. So, if you needed to move a 1000 MT from the coastal storage depots to the inland storage depots that would take about 50 trucks to fill it up. It would have been a lot easier if we had them linked up by pipeline.

There are a lot of moderately sized LPG filling plants across the country. Nigeria has about 350 of these across the country (within 50 MT – 100 MT storage capacity). From NLNG to coastal storage depots, it goes via trucks to the LPG inland storage depots and LPG filling plants and from there it goes to the secondary distributors (cylinder sellers who take from the filling plants), who then distributes to the end users and maybe to tertiary distributors.

So for the filling plants, are these all secondary distribution points? Do they do their own filling and distribution to the retailers?

Actually I would say that we have 2 kinds of secondary distribution and with regards to the filling plants, I would call them primary distributors and not secondary distributors. The filling plants are the ones who supply the secondary distributors with gas for their cylinders. The secondary distributors fill a thousand cylinders or thereabout and distribute directly to end users. There is a new set of secondary distributors in Nigeria (these guys are the second type) – they own filling plants of their own which are mini plants, these are 1 MT – 5 MT storage capacity which are typically installed in gas stations. So they normally buy in bulk from primary distributors (the filling plants) about 1 -2 MT using bobtail trucks which they in turn fuel to end users from gas stations.

The primary distributors (the gas plants themselves) also distribute to end users. So for me, if my cylinder is empty, I can take it, drive to any filling plant, walk into it, pay for the gas and get the cylinder filled – there is not much restriction in Nigeria. So you can go to a primary distributor and buy it directly from him or could give a call to a secondary distributor who would bring the gas to your home or you could even bring the cylinder to the nearest gas station where you fuel your car and buy from the new kind of secondary distributor who is filling from a small skid plant or mini plant.

What is the current penetration of filling plants across the country? Is there still much room for growth?

Well… Nigeria is on the verge of an explosive growth of the LPG industry. I don’t think there is any market in the world that has the kind of potential like you have in Nigeria. The market is thirsty for serious investment and investments are coming in gradually. Over the past year, we’ve had about 15,000 MT of new storage capacities. The per capita consumption in Nigeria is among the lowest in West Africa.

Nigeria has a population of about 170 million people according to the latest estimates and LPG penetration is only about 5%. The figures for LPG use in Nigeria in 2015 only stood at about 400,000 MT for a population of 170 million people – this is merely a scratch for a population that size. Nigeria has potential for LPG industry to 5 million MT per annum, so we are doing less than 10% of what we could be doing. So really, there is a lot of potential and room for investment. It seems to be much more saturated in places like Lagos which is a cosmopolitan city where literacy and education is high. Typically, the average person in Lagos uses LPG daily but you also have to consider looking at the rural parts of Nigeria which is completely not supplied with LPG. So, if anybody looks at that, the potential its really, really, huge, I repeat, I don’t think there is anywhere in the world that has the kind of potential for LPG goods and i nvestment like Nigeria.

Operating an LPG Plant

What are the most important health and safety issues that need to be monitored during operation of an LPG filling plant?

I think for me, from my experience, the most important part of the operations, is the operators – the people operating the filling plant. There is really, to a large extent a scarcity of qualified personnel available in Nigeria to run an LPG plant. So typically when you are hiring staff, they have little to no training or experience in running an LPG plant. So the biggest risk you face, is having an operator who is not knowledgeable enough. The need to conduct initial and ongoing trainings cannot be over emphasized to ensure one has the right operators. In my opinion, the highest risk involved and the single most important safety factor is adequate training and competence in plant operations.

For our operations we make sure that we have a series of trainings both formal and informal, both on the job and off the job, to ensure our operators are at their best – it really is safer to run a poorly constructed LPG facility with competent operators than to run a properly constructed LPG facility with incompetent operators. The operators come first and are the most important factors even before the facility itself. So just to summarise, the highest significance where safety is concerned are the operators, adequate training and then the quality/ standard of the facilities.

What sort of operation costs are involved in running an LPG plant? Would you be able to give a ballpark figure/ rough estimate of the monthly costs involved in operating a plant?

After staff costs, the most expensive part of operation is power. In Nigeria, we don’t have good public power supply so you would spend about 20 – 30% of your total cost on power which must be run on diesel – these are stand-alone generators running the plant. Let me give you an example, we have a 100 MT LPG facility that fuels about 15 MT a day. To operate the plant, we have about 14 staff members – 8 operate filling machines and the sorting / carrying cylinders, a plant manager and admin staff and about 2 security officers. The average cost of manpower is about 1.2 million Naira (USD 3937) per month.

Without staff cost, we would spend about N180,000 (USD590.65) for diesel (power), N120,000 (USD393.77) for diesel cost, N60,000 (USD196.88) public power cost (which is not reliable). LPG equipment rarely breaks down if you perform your regular maintenance, daily checks, monthly checks, and quarterly checks and with that we rarely need to buy spares, we don’t spend much on spares. So typically, it’s just the cost of servicing equipment and the generator which will amount to about N200,000 (USD656.28) in a month. Other costs would include a supply of consumables, seals, etc. – typically for a plant in Nigeria – the turnover would be about 250 MT in a month and spend about 2 million naira a month and which about N1.2 million (USD3937) goes to Staff cost. All in all, it costs about N2 million (USD6562) to fill out about 250 MT of LPG every month.

Why is diesel used for power and not LPG itself?

LPG can be used, it just has not been explored. Typically, a lot of industries in Nigeria are all powered by diesel, even our homes and our offices. Diesel is readily available. You could say an LPG generator could be easily installed and piped from your main storage to a smaller storage to supply an LPG generator but unfortunately there are not many LPG generators in the country now, they are only just starting to come in. The thing is most of these types of generators have been designed for propane and not for butane which is what is generally used in Nigeria. I am sure though that as the market grows, we may be able to explore butane powered generators and engage more manufacturers who might be able to provide butane powered generators. A big part of it, is also due to cost – the cost of diesel, slightly cheaper than cost of LPG. It might be cheaper to run on diesel than LPG.

Moving Forward

What needs to be done to improve the overall LPG distribution network and growth of the LPG industry in Nigeria?

Infrastructure – we need infrastructure across the LPG value chain. I’ll give you an example of the typical way things work in Lagos. When an LPG vessel comes into Nigeria, we only have one LPG facility with a dedicated jetty in Lagos. All other facilities (about 5 of them) are connected to a major jetty that also receives other petroleum products. Most petroleum products imported into Nigeria (other than LPG) have a higher demand than LPG, so preference is given to petrol, aviation fuel, diesel and then LPG. So, you may have an LPG bearing vessel having to wait for several days.

Jetty expansions would help facilitate demand for LPG in the country. Facilities outside Lagos could also go a long way in improving access to LPG. Also, the transition of LPG from coastal storage depots to inland storage depots which is done typically by road (which are not in good condition) forestall the distribution process. Perhaps we could consider using rail or most preferably link the inland storage depots via pipeline – it would help the supply of LPG in Nigeria. .

Most importantly, cylinders – the typical Nigerian is not able to afford the initial cost of cylinders. Investing in the provision of LPG cylinders especially for rural communities will aid the growth of LPG use in Nigeria. I think that if we take from the lesson learned from India, Indonesia, Brazil and all countries that have grown their LPG industries significantly, you will realize that the governments of these countries made significant investment in providing this infrastructure. If we can have half that level of commitment and investment from the government, I am sure Nigeria can very easily grow their LPG industry by more than a 1000% over the next 5 – 6 years. I am so confident about that because of the amount of potential we have in this country.

Despite the multi-faceted challenges in Nigeria’s LPG industry, this sector will thrive following proper assistance from the government, tactical strategies, and operational efficiencies as it’s a cleaner, healthier and more affordable energy source.

The views expressed in this publication are solely mine and does not represent the position of my employer .

(LPG Business Review)

Teryima Denen Toryila

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Business Idea

How to Start Gas Plant Business

March 11, 2024

Today, I bring o you a discussion on the most effective methods to begin effective gas plant business in Nigeria.

Feasibility Study on Gas Plant Business

With short of capita utilization, Nigeria positions among the most reduced oil and gas expending states in Africa. This is sad, in spite of its immense gas assets. Nigeria at present expends around 70,000 MT for every annum and has around 130 LPG plant. Also available are about 7,000 retailing outlets scattered over the organization.

In any case, the nation has a tremendous gas hold of 185 trillion cubic feet. Government’s solid responsibility regarding increment the nearby utilization of gas from 70,000 MT for every annum.

As it stands, this is bound to increase to 1,000,000 MT yearly. There are therefore markets and open doors for the foundation and marketing of condensed oil gas plants in Nigeria.

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Gas Plant Business

Detailed guide to establishing gas plant business in NIGERIA

Government application procedure

As per arrangement part IV, area, sub segment {2} of the oil determination of 1967, any mass stockpiling or stop for condensed oil gas in Nigeria should be operated with permit.

Therefore, application for endorsement to build and operate a melted oil gas filling plant with the end goal of retailing to general society must be submitted to the Directorate of Petroleum Resources {DPR}.
This ought to be gone with subtle elements of the proposition and some other data that might be important to the venture.
There must be confirmation that the company applying for DPR endorsement is properly registered as a constrained obligation company by the suitable federal service to bargain in oil based good.
Other reports that must be appended to the application incorporate assessment freedom testament for the first years.
Three {3} duplicates of a plan demonstrating the structures existing or proposed on the site and the connection of the site to the roadway and abutting property must be submitted alongside the application.
Also required is a testament marked by the chief federal/state fire officer or an officer approved.
The testament from the town planning and police specialist is likewise required. A natural effect evaluation of the proposed plant is additionally required.

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Select a Good Location for Your Gas Plant Business in Nigeria

Similarly, as with any business wander, the area of your gas plant is exceptionally key. On account of this one, it is generally unconventional.

A decent place to find your gas plant is in vicinity of a sprawling neighborhood. This is to guarantee that you are not very far from your objective market. You don’t need your customers to need to make a pointlessly long separation to achieve your business put.

Regardless of the way that you ought to have closeness of the objective market as a main priority, bear in mind that you are managing a profoundly inflammable product. Consequently you should likewise guarantee that your planned area is not encompassed by private structures.

In Nigeria, all state governments have divisions that have the duty of guaranteeing that such businesses are found where they won’t be a risk to the general population.

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As we have dependably reiterated in this gathering, it is most important to register your business with the corporate undertakings commission (CAC). This is on account of it is in accordance with the laws of Nigeria.

Inability to do as such will pull in some sol i d punishments from the specialists and now and again, criminal allegations. With the goal for you to be viewed as maintaining a honest to goodness business, it is important.

It is additionally important for you to see whether there are different bodies you need to register with separated from the CAC. For instance, on account of a LPG plant you likewise need to get authorization from the division of oil assets (DPR).

You ought to likewise see whether there are any ar e a particular enrollments that must be finished. This is on the grounds that in Nigeria, different states have their laws and necessities for you to be allowed to work together in their state.

Build Your Gas Plant Infrastructure

In the wake of choosing your area and registering your bus i ness, it is currently time to set out about raising up your building.

For a gas filling plant, you will require a mass stockpiling bottle. This is the place you will store the gas you have purchased in substantial amounts. It is from this stockpil i ng bottle that you will then retail to your customers.

You will likewise need to assemble an open refilling cove. This must be open on the grounds that the amassing of LPG is both harmful and profoundly dangerous. There is requirement for steady stream of natural air to your refilling region.

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Employ Skilled Staff

This is very important. You will require some staff, both gifted and untalented to help you to maintain your business sufficiently.

At the base, you ought to utilize a security protect, secret a ry/accounts officer and a professional to handle the refilling procedure. In the event that you have sufficient energy in your hands, you can take up a few parts.

Advertise Your Business

There is no utilization setting up a decent business and not letting the world think about it. The importance of ad to a business can’t be over underscored. You can make utilization of flyers and publications to get the message out about your business.

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Seek and Acquire Knowledge

You should dependably be eager and prepared to look for m o re data about new patterns in the business. It is likewise important that you screen the market slants so you can set yourself up for any projection.

Be Conscious of Risks and Safety

As you set about this business, keep in mind that you will manage exceptionally inflammable products. NEVER play with the safety aspect of the business.

Put up Warning and Instructional Signs

Guarantee that you have striking and prominent cautioning s ig ns to alarm both staff and customers of the fire danger that exists inside the premises.

Each business has its unconventional difficulty. The greatest hazard in cooking gas business is fire blast. This of course, is extremely normal because of the high inflammable nature of liquified gaseous petrol. That isn’t much issue since it can without much of a stretch be relieved or even m ai ntained from a strategic distance.

Get Your Fire Extinguishers Ready

To have the capacity to abridge this, you should be ready at all circumstances to identify when there is spillage in those cylinders. This is essential, as spillage is one of the significant reasons for flame and blast. You additionally need to purchase great fire distinguishers that ca n be extremely handy in time of minor fire episode.

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Prepare for Market Changes

Another hazard in the business is government control. Ought to government choose to build the cost of LPG, a few purchasers may think that it’s hard to take and need to fast-track to utilizing lamp fuel or kindling. On the off chance that that happens, you lose a few customers and y o ur deals will drop.

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Despite the fact that LPG is generally utilized by il lu minated people in Nigeria, the market is National. With a populace of more than 140 million individuals, evaluated national populace development rate of 5.7% for each annum.

There is also a normal financial development rate of 3.5 % in the previous five {5} years, Nigeria has a huge, expanding and sustainable market for condensed oil gas.

The raw materials required for production can be sourced from Nigeria with the offering cost of 12.5 cylinder averaging N2,200. Opportunity additionally exists in the retailing of the product where the speculator can make between N300 – N500 for each 12.5 cylinders.

If you need a complete business plan, please let us know. Or, you want us to help you set up this business, kindly contact us. Otherwise, Please check out these other business ideas you can do in Nigeria

BusinessHAB

Thank you so much for the information that I was able to read from your write up here. I wish to know if you have idea of the total cost of setting up a cooking gas refilling plant in Nigeria, The price of the tank, the price of the material . The fee to get the licence and all that, putting aside the plot of land. I have a land already for the business.

Is ok, read more on https://businesshab.com/ for more business tips. Thanks.

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Gas Station Business Plan Template

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Cooking Gas (LPG) Plant Business In Nigeria (2024 DOC)

Cooking Gas (LPG) Plant Business In Nigeria 2024 PDF Sample | Feasibility Study

Cooking Gas (LPG) Plant Business In Nigeria – Cooking gas is essentially one of the most essential home needs, and of cause for those who do not require kerosene to prepare their meals.

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Business plans and feasibility studies to get a discount.

The cooking gas also known as the liquefied petroleum gas (LPG) business is one business that has been thriving in Nigeria , and with the liquefied petroleum gas (LPG)/cooking gas filling plant business plan & feasibility study you can set up a plant and start running your own business.

Starting a personal LPG Cooking gas plant business in Nigeria can be profiting as much as it is rewarding. It comes with financial commitment and extra work ethic. This PDF file (MS word document) is a comprehensive Cooking Gas (LPG) Plant Business Plan, it has the complete information that you will need to setting up your own LGP filling plant in Nigeria using the gas station business plan doc.

BUY YOUR own Cooking Gas (LPG) Plant Business In Nigeria PDF. Simply order yours by paying N20,000 to

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Once payment is made for the Cooking Gas (LPG) Plant Business In Nigeria PDF, send the following (i) a valid email address and (ii) your payment details to any of these numbers – 07039768549.

What To Use Your Cooking Gas (LPG) Plant Business In Nigeria PDF file For

The Cooking Gas (LPG) Plant Business In Nigeria pdf file can do much more than just planning a business, it can be used for other things as will be listed below, below are what you can do with your Cooking Gas (LPG) Plant Business plan feasibility study;

You can apply for a business Grant using this business plan /feasibility study
You can secure Bank Loans for your business or start up capital
You can use it as a business proposal writing to a cooking gas firm in order to either obtain loans or use an already established cooking gas company name (as franchise).
Information contained in this feasibility study can serve as a reference to publishable academic project work, seminar paper etc.
Information contained in this business plan can serve as your model for business or your business concept.

While growing up, there was this little misconception we had about cooking gas , the popular believe back then was that cooking gas is specifically meant for the rich folks, and that getting one and maintaining it cost a whole lot of money. Well, in all honesty, cooking gas is actually one of the cheapest means of cooking your meals, take for example, the average price of a litre of kerosene cost’s N305.55k, while a the price of cooking gas per kg goes for N336 (price is not stable), although the price of gas is a bit higher, however, the 1kg gas will last you for up to three to four days compared to 1 litre of kerosene that might not be enough for a day.

No wonder the market for Cooking Gas (LPG) Plant Business plan In Nigeria is huge and will always accommodate more dealers, in Enugu (Coal City) alone, Cooking Gas (LPG) business Plant should number a little above 60 outlets. Most filling stations are adding it to their products. A little research on the viability of the business will tell you that it is a viable venture, one that will bring you returns. These days almost every family use cooking gas in their homes and demands keeps increasing as many new homes are either getting a new cooking gas or they are upgrading the one they have already.

Thanks to the government, these days cooking gas has become more affordable, hence the notion of cooking gas being for the rich is no longer there. In major city centres, a landlord will not build his house and then make provision for wood and kerosene methods of cooking, majority of the houses I’ve been to in Enugu, Abuja and Lagos, Landlords now make provision for cooking gas in their kitchens.

Now, let me assure you that with a body like the NLNG in charge, your business continuity is assured. Coming to the market and customer base, Nigeria has an estimated population of 180 million people, out of this number only 1.8 million of the population make use of cooking gas, that is about 10% of the (10 per cent) of the entire population. This simply means that the market has barely been scratched. More people are going with the option of cooking gas, even in the rural areas, cooking gas is becoming the most viable option there.

Factors to Consider Before Setting Up A Cooking Gas (LPG) Plant Business In Nigeria

A brief look at the possible challenges as well as factors you must consider before you start investing into the Cooking Gas (LPG) Plant Business using the gas station business plan doc, see factors below;

Start Up Capital – Every business requires a start up capital , most times you may not have the required fund to start your business, you can actually go for a loan using the Cooking Gas (LPG) Plant Business plan pdf, or you can apply for a loan using the feasibility study. In all, you need to have your start up capital in place.

Research – Getting adequate information on the cooking gas business is very important, it exposes you to information such as the market viability, the level of demand as against supply, the possibility of more people choosing the cooking gas option, the competition and also you get to know how to start, where to start and how much to invest.

Write A Business Plan – Haven achieved the two above, you can go ahead to write a business plan, that is if you know how to, writing a business plan for your business, this entails you have all the necessary information required. You can as well contract a professional to write one for you or follow the easiest of them all, buy one of our Cooking Gas (LPG) Plant Business plan, they are written by professionals who updates the information therein from time to time.

Business Registration – You can now proceed with the registration of your business, of cause, there are procedures to follow. However, to begin with, go to the Corporate Affairs Commission (C.A.C) office in the state where you reside and register, since their office is situated in every state of the federation, you can opt for their online option by visiting their platform.

Trading Equipment – You need your gas hardware equipment to begin with, these equipment refers to different sizes of cylinders, precisely here are the types of cylinder to buy;

5kg cylinders
5 kg cylinders
20kg cylinders
45kg cylinders
90kg cylinders

Depending on the space in your shop, you can get two 5kg cylinders, fifteen 12.5kg cylinders, five 20 kg cylinders and 45kg cylinders and then maybe one 90kg cylinder, use your initiative to determine what can enter your shop .

Buying Your Cylinders – Since cylinders are in the center of the business , you can actually get them from a reliable cooking gas supplier, they sell the best (both new and old). Buying from them also helps your course as you will be building a business relationship and goodwill. And then organised transport that will move your gas from the supplier to your shop.

Location – Where site this business is equally important, it is advisable to site your Cooking Gas (LPG) Plant Business in a densely populated area. You know why? Most times gas finishes without warning and the customer might not be mobile to travel a long distance in order to buy cooking gas, you become an automatic option. Having your business in such area guarantees you constant customers on a daily basis, you can include additional services such as home delivery, cylinder servicing etc

Skill Acquisition – This part is one of the most important part of this business, this is a high risk business were any slightest mistake will result into inferno. Training can be acquired through other established cooking gas plants, these are the things you must focus on through your skill acquisition period;

How to change valves
How to connect gas cylinders to other type gas cookers
Know how and where to buy gas
Learn how to differentiate between high and low quality LPG gas

These skills and more will make you stand out in the business.

Cooking Gas (LPG) Plant Business In Nigeria PDF Table Of Content

Introduction & Terms of Reference
Executive Summary
Nature of Gas plant Business Plan/Feasibility Study
Direct Cost & Operational Expenses
Expenditure/Capital Cost
Plant Operation/List of Equipment
Shares Capital
Organization & Management
Projected Balance Sheet
Profitability Projection
Cash Flow Projection
Calculation of Loan Repayment & Interest
Notes to Accounts & Projection

Cooking Gas (LPG) Plant Business In Nigeria PDF List Of Tables

Calculation of Monthly Loan Repayment, Processing Fees, Management
Fees and Interest
Fixed Asset and Depreciation Computation
Direct Cost Estimate for years
Operational Cost for years

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An Executive Summary Of This Business Plan

The Cooking Gas Plant has to be fully registered business with license to operate in the designated environment, which could be anywhere in the country. The main services and products on offer at our place of business for our highly esteemed customers includes a standard cooking gas. Other business ventures which we engage in includes sales of gas cookers, sale of cooking gas cylinders, also other gas cooker accessories like burners etc we also handle repairs and gas cooker servicing.

We are open to the use of latest technology in the cooking gas plants industry. No doubt our excellent customer service and the range of additional complementary services we offer will position us to become one of the most preferred cooking gas plants in town. Researching and defining our markets, strategies, mission and financials will provide insight and prepare the owner to successfully run the cooking gas.

The Cooking Gas Plants industry over the years has experienced a modest amount of volatility. As a matter of fact, as more Nigerians switch from kerosene stoves to gas cookers, the demand for cooking gas also increase. So also, as per capital disposable income continued to increase, some household, even people in a smaller apartment would choose to go for gas cooker even if it is camp gas as against settling for the not too pleasant coal stove or kerosene gas.

Just like other industry, the cooking gas plants industry has also experienced its fair share of ups and downs over the last five years. As a result of restiveness in the Niger Delta area of Nigeria and also the recent fall in global oil and gas prices. The industry is known to employ several thousands of people. There are no cooking gas plant companies that can boast of having the lion share in the Nigeria market; the industry is pretty much open for competitions. Although the cooking gas plants industry can be said to be a competitive industry, but it does not in any way stop entrepreneurs who are creative and financially capable to still make headway in the industry. It is indeed a profitable industry especially when the business is well located.

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How to Make LPG Gas Cylinder?

There are several uses for LPG gas cylinders, including household and commercial. An LPG gas company for cylinder manufacturing might be difficult and expensive to start, but it can be a profitable endeavor with careful planning.

When starting a facility to produce LPG gas cylinders, the following points should be kept in mind:

1. The manufacturing process of LPG gas cylinders is regulated by various international standards, such as ISO 9001 and ISO 14001. It is essential to ensure that your facility is compliant with these standards to produce high-quality cylinders.

2. The production process of LPG gas cylinders is energy-intensive, and it is essential to have a reliable energy source to maintain a consistent production level.

3. LPG gas cylinders are made from materials under high pressure, which can pose a safety risk if not handled properly. Having adequate safety measures to protect workers and the surrounding community is essential.

4. LPG gas cylinders must be tested before they are shipped to customers.

5. LPG gas cylinder manufacturing plants need to be located near an LPG gas storage facility to have a constant

Also Read: What is the Difference Between Businessman And Entrepreneur?

Project Requirements for Gas Cylinder Company

The following are the project requirements for setting up an LPG gas cylinder manufacturing facility:

The total land required is around two acres, and the plot should have all the basic facilities like water, electricity, etc.

2. Building:

The total built-up area required for the factory is approximately 10,000 sq. ft. One section of this space can be used as an office, and the other can be used for production.

3. Machinery:

The machinery required for this project includes an automatic welding machine, a hydraulic press, a Lathe machine, a drilling machine, and a painting booth. The cost of all the machinery is around 15 lakhs.

4. Manpower:

This project will need around 25 trained workers.

5. Other Requirements:

The other requirements for this project are an LPG gas tank, a gas pipeline, and an LPG gas filling station.

Also Read: What is the Difference Between E-Business and E-Commerce?

Plant and Machinery for LPG Gas Cylinder Manufacturing

LPG gas cylinders are typically made from steel or aluminum and are used to store liquefied petroleum gas (LPG gas). LPG gas cylinder manufacturing plants usually have several machines to create the cylinders. These may include stamping machines, welding machines, coating machines, and assembly lines.

When setting up an LPG gas cylinder manufacturing plant, it is essential to consider the type of machinery required. The size and intricacy of the cylinders being created will determine this. For example, small domestic LPG gas cylinders can be produced using basic stamping and welding machines, while large commercial cylinders may require more sophisticated equipment.

It is also essential to consider the workforce needed to operate the machinery. An LPG gas cylinder manufacturing plant can be pretty labour-intensive, so it is necessary to ensure sufficient staff to keep production running smoothly.

Finally, it is also worth considering the location of the plant. Many LPG gas cylinder manufacturing plants are located near natural gas fields or refineries, providing a convenient source of raw materials. The installation of a plant, however, may also be done in a more isolated area.

Production of Commercial LPG Gas Cylinders

LPG gas cylinders are used for various purposes, including domestic and commercial uses. To produce commercial LPG gas cylinders, it is necessary to have the right equipment and facilities. Here’s an overview of what goes into establishing a commercial LPG gas cylinder manufacturing plant:

1. The first step is to procure the raw materials, including the steel sheets or coils used to make the cylinders.

2. Next requirement is to set up the assembly line. It will be necessary to install the required gear and equipment, such as sheet metal cutting machines and welding machines.

3. Once the production line is set up, the next step is manufacturing the cylinders. This involves cutting the steel sheets into the required shape, welding the seams, and testing the finished product to ensure that it meets all safety standards.

4. Once the cylinders have been manufactured, they need to be painted and labeled according to their intended use.

5. Finally, the cylinders must be packaged and shipped to their destination.

Also Read: Strategic Planning Process in Business: Goals and Benefits

Production of Domestic LPG Gas Cylinders

The production of domestic LPG gas cylinders is a process that involves the use of specialised equipment and highly trained personnel. The manufacturing process starts with selecting raw materials, which are subsequently cut and moulded into the appropriate shape and size. Once the raw materials have been cut and formed, they are welded together to create the cylinder. After the welding process is complete, the cylinder is tested for leaks. Then the cylinder is ready for painting and final assembly if no leaks are found.

Once the cylinder has been painted, it is then ready for shipping. Shipping LPG gas cylinders is a process that requires the use of specialised equipment and trained personnel. The shipping process begins with loading the cylinders onto a truck or trailer. After that, the vehicle or trailer is driven to the place where the cylinders will be delivered.

Production Capacity and Working Hours at an LPG Gas Cylinder Company

An LPG gas cylinder manufacturing plant typically has a production capacity of 200,000 to 400,000 cylinders per year. The plant normally operates for two shifts of 8 hours each, for 16 hours per day.

The production capacity of an LPG gas cylinder manufacturing plant can vary depending on the size and type of cylinder produced. For example, a plant that produces small cylinders may have a lower production capacity than a larger one. The working hours at an LPG gas cylinder manufacturing plant may also vary depending on the time of year. For example, the plant may operate for additional hours during the peak demand season.

Staffing Needs for an LPG Gas Cylinder Manufacturing Plant

When considering staffing needs for an LPG gas cylinder manufacturing plant, a few key positions must be filled to ensure a successful operation:

A plant manager oversees all operations and ensures production goals are met.
A quality control manager to monitor product quality and compliance with regulations.
Experienced production workers to manufacture the cylinders.

When staffing an LPG gas cylinder manufacturing plant, it is important to find individuals with experience in the industry. With the proper personnel, a facility can produce high-quality cylinders that meet customer demands.

Also Read: 10 Home-Based Business Ideas To Help You Make Money

Capital Investment and Cost of Setting up an LPG Gas Cylinder Manufacturing Plant

In terms of capital investment, the highest costs will be for the purchase of equipment and machinery. Other costs include land and building costs, hiring staff, and training them in production.

Overall, the cost of setting up an LPG gas cylinder manufacturing facility is high but achievable if careful planning and execution are undertaken.

The cost of setting up an LPG gas cylinder manufacturing plant will vary depending on the size and capacity of the plant. The cost may vary from INR 6 – 10 crores for setting up an LPG gas plant. Most of the investment will go into purchasing the machinery and equipment required for production.

Quality Control and Standards for LPG gas Cylinders

It is essential to have quality control and standards in place when manufacturing LPG gas cylinders. This is because LPG gas cylinders store flammable liquid and must adhere to strict safety standards. Setting up quality control for LPG gas cylinder manufacture requires taking into account several factors, some of which are listed below:

The raw materials used to make the cylinders must be of good quality and sourced from reliable suppliers.
The manufacturing process needs to be monitored and controlled so that each cylinder meets the required standards.
Regular testing of the finished cylinders needs to be done to ensure they meet the relevant safety standards.
To start an LPG gas cylinder manufacturing plant, you must have a comprehensive quality control plan.

These points will help to ensure that your cylinders are safe and meet all the necessary standards.

Market Survey for LPG Gas Cylinders

Before starting an LPG gas cylinder manufacturing plant, it is essential to survey the market to understand the potential demand for the product. Online research, conversations with potential clients, and expert industry advice can all be used to accomplish this. Once the market potential has been determined, the next step is to develop a business plan and obtain the necessary financing.

Also Read: What are the Basics of Business Intelligence for Brands?

Conclusion:

So, this is how you can start an LPG gas cylinder manufacturing plant. You must clearly understand the production process, choose the right machinery and equipment, and get all the necessary licenses and permits. After everything is done, you can begin making LPG gas cylinders and selling them to residential and business clients.

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How to start a successful lpg business in nigeria in 2023..

The plan by the Federal Government through the National Liquefied Petroleum Gas (LPG) popularly called cooking gas Expansion Implementation Plan domiciled in the Office of the Vice President; to achieve a target of five million Metric Tons of LPG consumption annually by 2027 is set to open a fresh vista of opportunities for those in the gas sub-sector.

Part of the plan also includes the injection of 10 million cylinders into the market in order to discourage the use if dirty fuels which included charcoal, firewood, kerosene, among others.

Programme Manager, National LPG Expansion Implementation Plan, Mr Dayo Adeshina, had last year disclosed that all these efforts were geared at improving safety and deepening LPG utilization in the country.

“We are starting the cylinder injection under the first phase in 11 pilot states and FCT, with two states from each of the geopolitical zones. The states are Lagos, Ogun, Bauchi, Gombe, Katsina, Sokoto, Delta, Bayelsa, Ebonyi, Enugu, Niger and the Federal Capital Territory”.

The cylinders will be injected through the marketers. The marketers will be responsible for the cylinders and the exchange will take place in homes and not in filling stations. What this means is that going forward, cylinders will not be owned by individuals but by the marketers who will ensure that they are safe for usage.’’

Regrettably, Nigeria, with a proven gas reserve of 206 trillion cubic feet according to latest statistics from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) records a paltry consumption of 1.3 million metric tons per annum. The disconnect between the volume of available gas reserves and cooking gas penetration was as a result of poor investment in the LPG sector.

But to reverse this trend, investments must be encouraged in the entire gas value chain from gas production to transportation, retailing and marketing in order to grow the LPG consumption figure. The Nigeria LNG Limited (NLNG) recently disclosed that feed gas and market constraints remained an impediment towards Liquefied Petroleum Gas (LPG) popularly called cooking gas supply into the domestic market.

This was as it said the company was committed to supply 100 per cent of all its LPG production (butane and propane) to the local market. It added that there were challenges which have slowed the utilization of LPG in the country. This included the inability of the market to completely absorb NLNG’s propane production, leading to its sparse export of propane to avoid tank-top situations at its plant.

Despite the massive investment opportunities that abound in the gas sub-sector, one area that is still largely untapped is investment in LPG plant. While other areas of the value chain such as terminals, gas accessories and parts, haulage investment are getting investment opportunities, investment in cooking gas plant is still at its lowest ebb.

This development can be said to be partly responsible for the high cost of cooking gas because there are only few players in this sub-sector of the LPG arm of business, with the few operators are smiling to the banks on a daily basis as a result of huge returns on investment.

Establishing LPG plant

Cooking gas business is very profitable, and you don’t have to break the bank before you can start. With substantial startup capital you will get your business set up and ready to go with almost everything necessary in place. And this is a big business that anyone who is into it can be proud of.

But beyond the financial requirement needed to establish an LPG plant, there are statutory regulatory guidelines that must be met before license can be issued. These standards are prescribed by the downstream regulatory – The Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA), formerly known as the Department of Petroleum Resources (DPR). This post explains further on how to get your license. Also take note that we have explained that there is a deadline to consider to get said license.

Risks in LPG business

Every business has its peculiar setback and the biggest risk in cooking gas business is fire explosion, which is very common due to the high inflammable nature of liquefied natural gas. That isn’t much problem though since it can easily be mitigated or even avoided.

To be able to curtail this, you need to be alert at all times to detect when there is leakage in those cylinders as leakage is one of the major causes of fire and explosion. You also need to buy good fire extinguisher that can be very handy in time of minor fire outbreak.

Another risk in the business is the purchase of substandard product and equipments. In the event that the store set up is not up to standard, accidents will occur and be a threat to the environment and others around. Thus, it is imperative that no stone is left unturned when it comes to setting up a store that is up to standard and avoid endangering the lives of others. In fact, one can also say that the ensuing accidents or explosion can also lead to enormous financial and property loss as is the notoriety of gas explosion.

According to the Sun News to set up a 2.5 tons mini plant will cost N7.5 million while a 5 tons mini plant will cost N14.5 million. The cost of 1kg including landing cost from the depot is N600.This is now sold at N750 at the cooking gas plant. That translates to a profit margin of N150/per 1kg of gas. If one is lucky to be in a busy location and sells about 500kg of cooking per day, that translates to a profit margin of N30,000 daily.

How profitable is cooking gas business in Nigeria?

Let’s take the 12.5kg cylinder as a case study; the average profit you make from 12.5kg cylinder of cooking gas is N1,000. You buy for unit cost of N7,500 or less and sell for N8,500 or higher. If you sell 30 cylinders in a day at the average profit margin of N1,000, you will be making N30,000 daily. In a month, you will be making N30,00×30 = N900,000.

This is relatively the lowest profit you can make in cooking gas business if you are in a highbrow locality where you get good patronage. Most people make much more than what we calculated here. So, it’s not in any way by exaggeration. Gas companies, both the suppliers and retailers, are making good money in the business. You can become one of them today if you act now!

LPG in Nigeria is here to help you get started. Visit our blog and follow us on our social media platforms to keep abreast of LPG News.

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Oluwabukola Jimoh

Oluwabukola Jimoh is a dynamic academic writer and captivating energy blogger. She is able to delve into intricate subjects with an insatiable thirst for knowledge, crafting thought-provoking essays that engage and enlighten her readers.

11 Comments.

Pls how do I raise funds with virtatrade.com

Want to start with 500kg what is the size of the land I can place it on ? Or can I attach it beside a shop along the road

Samuel Adelowokan

Kindly forward all requests and information about plant setup or LPG Business setup to [email protected] or You can call us on +2349047574454 (Whatsapp). Thank You!

Eronini Ojinere

Kindly furnish me with the information regarding getting approval for a 2.5 tonne lpg plant at a rural area in Imo State. Thanks.

I am interested in setting up a gas station, how do l get started

Pls i have a land, but l wanted to know wats d list of sizes of d gas cylinder plant, for a starter, and how much it will cost me. thanks

Innocent Ubaka

I want to get into gas sale and cylinder sales business guide me how please

What is the cost implication of setting up a small gas station of 5tons in Rivers State and the procedure of starting.

[email protected]

I will like to be updated concerning lgp gas business as a starter

Hello, I am interested in buying 2.5mT tank in abuja

If you want to start cooking gas business, there are so many company platform this days like www.virtatrade.com that can enable you to raise the funds you need to backup your cooking gas business without you seeking for a loan

This company platform is where so many business dealers from different part of the world raise funds to backup there various business financially

I use this company platform to backup my cocoa beans export business each time am running loss financially

You can visit and register with the company website here www.virtatrade.com to raise the funds you need to backup your cooking gas business now

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Gas Delivery Business Plan Template & Guidebook

Business planning is an important part of starting up a new business. A good business plan can help you get investors and lenders to invest in your company. In order to write a good business plan, it is helpful to use sample business plans in order to get an idea of what the different sections should include. This article provides some information on how to write a business plan for your gas delivery business.

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How to Write a Gas Delivery Business Plan in 7 Steps:

1. describe the purpose of your gas delivery business..

The first step to writing your business plan is to describe the purpose of your gas delivery business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.

It also helps to include a vision statement so that readers can understand what type of company you want to build.

Here is an example of a purpose mission statement for a gas delivery business:

Our purpose at Gas Delivery Inc. is to provide our clients with a convenient, reliable, and efficient way to get the gas they need, when they need it. Our mission is to become the leading provider of gas delivery services in the region, offering a wide range of options and packages to suit every need and budget. We are committed to providing our clients with high-quality gas, delivered in a safe, timely, and professional manner. We aim to provide a hassle-free, stress-free experience for our clients, and to deliver exceptional results that exceed their expectations. We believe that everyone deserves to have access to convenient, reliable, and efficient gas delivery services, and we strive to provide our clients with the best products and services available.

2. Products & Services Offered by Your Gas Delivery Business.

The next step is to outline your products and services for your gas delivery business.

When you think about the products and services that you offer, it's helpful to ask yourself the following questions:

What is my business?
What are the products and/or services that I offer?
Why am I offering these particular products and/or services?
How do I differentiate myself from competitors with similar offerings?
How will I market my products and services?

You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.

3. Build a Creative Marketing Stratgey.

If you don't have a marketing plan for your gas delivery business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals.

A good marketing plan for your gas delivery business includes the following elements:

Target market

Who is your target market?
What do these customers have in common?
How many of them are there?
How can you best reach them with your message or product?

Customer base

Who are your current customers?
Where did they come from (i.e., referrals)?
How can their experience with your gas delivery business help make them repeat customers, consumers, visitors, subscribers, or advocates for other people in their network or industry who might also benefit from using this service, product, or brand?

Product or service description

How does it work, what features does it have, and what are its benefits?
Can anyone use this product or service regardless of age or gender?
Can anyone visually see themselves using this product or service?
How will they feel when they do so? If so, how long will the feeling last after purchasing (or trying) the product/service for the first time?

Competitive analysis

Which companies are competing with yours today (and why)?
Which ones may enter into competition with yours tomorrow if they find out about it now through word-of-mouth advertising; social media networks; friends' recommendations; etc.)
What specific advantages does each competitor offer over yours currently?

Marketing channels

Which marketing channel do you intend to leverage to attract new customers?
What is your estimated marketing budget needed?
What is the projected cost to acquire a new customer?
How many of your customers do you instead will return?

Form an LLC in your state!

4. Write Your Operational Plan.

Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations.

In it, you should list:

The equipment and facilities needed
Who will be involved in the business (employees, contractors)
Financial requirements for each step
Milestones & KPIs
Location of your business
Zoning & permits required for the business

What equipment, supplies, or permits are needed to run a gas delivery business?

To run a gas delivery business, you will need a few key pieces of equipment, supplies, and permits. These include:

Gas delivery trucks and tanks
Gas delivery hoses and fittings
A permit to operate your business (depending on location)
Business licenses and permits for business activities (if applicable)

You may also need to hire and train staff to manage the gas delivery operations and provide customer service.

5. Management & Organization of Your Gas Delivery Business.

The second part of your gas delivery business plan is to develop a management and organization section.

This section will cover all of the following:

How many employees you need in order to run your gas delivery business. This should include the roles they will play (for example, one person may be responsible for managing administrative duties while another might be in charge of customer service).
The structure of your management team. The higher-ups like yourself should be able to delegate tasks through lower-level managers who are directly responsible for their given department (inventory and sales, etc.).
How you’re going to make sure that everyone on board is doing their job well. You’ll want check-ins with employees regularly so they have time to ask questions or voice concerns if needed; this also gives you time to offer support where necessary while staying informed on how things are going within individual departments too!

6. Gas Delivery Business Startup Expenses & Captial Needed.

This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.

Typically, expenses for your business can be broken into a few basic categories:

Startup Costs

Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a gas delivery business varies based on many different variables, but below are a few different types of startup costs for a gas delivery business.

Running & Operating Costs

Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.

Marketing & Sales Expenses

You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your gas delivery business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.

7. Financial Plan & Projections

A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your gas delivery business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses.

Here are some steps you can follow to devise a financial plan for your gas delivery business plan:

Determine your start-up costs: This will include the cost of purchasing or leasing the space where you will operate your business, as well as the cost of buying or leasing any equipment or supplies that you need to start the business.
Estimate your operating costs: Operating costs will include utilities, such as electricity, gas, and water, as well as labor costs for employees, if any, and the cost of purchasing any materials or supplies that you will need to run your business.
Project your revenue: To project your revenue, you will need to consider the number of customers you expect to have and the average amount they will spend on each visit. You can use this information to estimate how much money you will make from selling your products or services.
Estimate your expenses: In addition to your operating costs, you will need to consider other expenses, such as insurance, marketing, and maintenance. You will also need to set aside money for taxes and other fees.
Create a budget: Once you have estimated your start-up costs, operating costs, revenue, and expenses, you can use this information to create a budget for your business. This will help you to see how much money you will need to start the business, and how much profit you can expect to make.
Develop a plan for using your profit: Finally, you will need to decide how you will use your profit to grow and sustain your business. This might include investing in new equipment, expanding the business, or saving for a rainy day.

Frequently Asked Questions About Gas Delivery Business Plans:

Why do you need a business plan for a gas delivery business.

A business plan is a document that outlines the goals and objectives of a business, as well as the strategies and tactics that will be used to achieve those goals. It is important to have a business plan for your gas delivery business because it helps to focus the efforts of the company, communicate the business's goals and objectives to potential investors, and provide a roadmap for the business to follow. Additionally, a business plan can be used to help secure funding from investors or lenders, who will want to see that the business has a solid plan in place before they provide funding.

How to write a business plan for your gas delivery business?)

To build a business plan for your gas delivery business, start by researching your industry, competitors, and target market. Use this information to define your business's goals and objectives, as well as the strategies and tactics that you will use to achieve those goals. Next, create a financial plan that outlines your projected income, expenses, and profit. This should include a projected income statement, cash flow statement, and balance sheet. Once you have all of this information, you can use it to create a comprehensive business plan that outlines the goals and objectives of your business, as well as the strategies and tactics that you will use to achieve those goals. A well-written gas delivery business plan contains the following sections: Purpose, Products & Services, Marketing Plan (including Marketing Strategy), Operations/Management Plan (including Operations/Management Strategy), Financial Plan (including Financial Forecasts), and Appendixes.

Can you write a gas delivery business plan yourself?

Yes, you can write a gas delivery business plan yourself. Writing a business plan is a valuable exercise that can help you clarify your business idea, identify potential challenges and opportunities, and develop a roadmap for success. While there are many resources and templates available to help you write a business plan, the process of creating one is ultimately up to you.

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I'm Nick, co-founder of newfoundr.com, dedicated to helping aspiring entrepreneurs succeed. As a small business owner with over five years of experience, I have garnered valuable knowledge and insights across a diverse range of industries. My passion for entrepreneurship drives me to share my expertise with aspiring entrepreneurs, empowering them to turn their business dreams into reality.

Through meticulous research and firsthand experience, I uncover the essential steps, software, tools, and costs associated with launching and maintaining a successful business. By demystifying the complexities of entrepreneurship, I provide the guidance and support needed for others to embark on their journey with confidence.

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Stay connected, the ultimate guide to starting an lpg gas business in south africa.

Are you looking to venture in the profitable LPG business space in South Africa and achieve remarkable success? Look no further! This step by step guide outlines what you need to build a thriving business in this booming market. Whether you are seasoned entrepreneur or just starting out, this guide will help you navigate the unique challenges of LPG gas business in South Africa and assist you in building a formidable LPG business.

Understanding Regulations And Permits Required For Starting An LPG Business In South Africa

LPG business is a highly regulated space with various regulations, permits and acts that one must adhere to if they are to operate in South Africa. It is very important that the business owner be legally compliant to all the regulations and permits as they are meant for the safety of the people and properties.

LPG Installation Regulations

Below we look at the relevant acts and policies that govern safe installation of LPG in South Africa:

The Occupational Health and Safety Act, 1993 – this one outlines all the responsibilities of the employers to ensure the safety and health of their employers, including those who maybe affected by the LPG installations.
The national Regulator for Compulsory Specifications (NRCS) Act, 2008 – This act established the NRCS that makes sure that all LPG installations in South Africa, follows relevant standards and regulations.
The Petroleum Products, 1977 – This act establishes the regulatory framework for building construction and contains provisions for the safe installation of LPG systems in structures.
SANS 10087-1:2013- The technical requirements for LPG systems and their components are provided by this South African National Standard (SANS) for LPG installations.

The business will also need to get their Gas Certificate of Compliance (CoC) from their local authorities. The CoC can vary from city to city or local authorities but will basically contain stuff like; getting an accredited gas installer certified by the Liquefied Petroleum Gas Safety Association of Southern Africa (LPGAS) , applying for the certificate, paying a relevant fee, getting inspection and being issued with the CoC which shall be displayed at all times at the business premises. The CoC is valid for 2 years and must be renewed annually.

Market Research and Analysis for Your LPG Gas Business

Before you jump into the LPG business, it is necessary that you do your market analysis and research first. Market research aids in the development of marketing strategies, the analysis of competitors, and the preparation of strategies for maintaining a competitive edge.

In 2012, the South Africa’s Department of Energy made a presentation to the Parliamentary Portfolio Committee of Energy on the , ‘ Option For LPG Expansion ’ in which they highlighted that:

The LPG Expansion option aims to provide access to safer, cleaner, efficient, portable, environmentally benign and affordable thermal fuel for all households nationally.
Switch low income households from the use of coal, paraffin and biomass to LPG as the thermal fuel;
Contribute to demand side management by minimizing the use of electricity on cooking and space heating; investing a fraction of the cost of a power plant in LPG switching cost could lead to a delay in the investment in new power plants.

Over the years there has been significant uptake and market for LPG gas and its necessary that you do a localised market research and analysis for your operations.

Creating A Business Plan For Your LPG Gas Business

The production and supply of LPG involves many players in the value chain, including the refineries/producers, wholesalers, distributors, dealers, retailers and end-users. It is important that you pick where you want to fall along the value chain. In this post, will most focus on the wholesalers, dealers and retailers.

Refineries or producers are typically involved at all levels of the supply value chain, from the acquisition of crude oil up to the cylinder or bottle retailing level.

The business plan includes your:

Executive Summary
Products and Services
Customers and Clients
Financial Considerations
Competitor Analysis
SWOT Analysis
PESTEL Analysis
Marketing Analysis & Trends

Starting The LPG Gas Business

If you would like to be an LPG distributor in South Africa, you will need to have the DMRE 38 wholesale license in which its application you submit through the Department of Mineral Resources and Energy after having published a notice of application in four newspapers. Distributors pay an annual license fee of R500. After granting of your license, the business need to submit annual business information to the department.

You also have to pay strict attention to your market, location and suppliers as they are core to the profitability of the LPG gas business .

Managing Safety and Security In Your LPG Business

LPG can be dangerous if handled improperly or used improperly, just like all other forms of energy. One of the main goals of the World LPG Association (WLPGA) is the promotion of safety, which is reflected in its mission statement: “As the authoritative global voice for LPG, the WLPGA promotes the use of LPG throughout the world to foster a safer, cleaner, healthier, and more prosperous world.” For more reading on the LPG Safety Guidelines for all stakeholders, you can access them here .

The hazards that are commonly associated with LPG gas are fire and explosion and the World LPG Association (WLPGA) released a short video highlighting some of the behaviours and charasteristics of the LPG under normal and abnormal conditions. ( https://www.youtube.com/watch?v=9X6EG3g8JHU )

In conclusion, just like any other business, your success is ultimately determined by how well you run the business and adhere to set business principles and many other business variables. All the best as you embark on your LPG gas business.

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Want to start LPG gas business? Here's what you need to do

Looking to start LPG cooking gas retail business? Here are a few things you need to know as per the Energy Regulatory Commission (ERC):

1. You need to acquire a business license from the respective county government.

2. You need a certificate of fire - Proof that the retail site has been assessed for fire. This certificate is obtained at the county government offices.

3. Safety assessment report - Proof that the retail site has undertaken a safety assessment by persons registered by Directorate of Occupational Safety and Health Services.

4. Workplace Registration Certificate by Directorate of Occupational Safety and Health Services.

5. Empty or filled gas cylinders should be stored in a well-ventilated area preferable outdoors in a secured cage.

6. Display “No smoking” signs and have fire extinguishers in place which should be serviced regularly.

7. Have a weighing scale that is calibrated/ standardized and in good condition.

8. Filled LPG cylinders should only be sourced from wholesalers licensed by the Energy Regulatory Commission.

9. Obtain a supply agreement with a licensed distributer.

10. Keep records of serial numbers of the cylinder you have received and distribute.

11. Do physical check of the state of the cylinders before distributing e.g check the paint, foot ring, valve.

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Gas(LPG) Retail Business Plan

Gas(LPG) Retail Business Plan Overview

This Gas(LPG) Retail Business Plan focuses on the informal retail of Liquefied Petroleum Gas ( LPG) commonly known as Gas. “ Informal “ is in the sense these are comparatively small businesses operating in a relatively relaxed manner as compared to the ‘formal’ like branded petrol stations and their more established agents like supermarkets.

The Gas(LPG) Retail Business involves consumers exchanging their empty gas cylinders with a full refilled cylinder at a fee. The retailer takes the empty cylinder to a wholesaler who r efills it at an agreed price the n sells to the next customer.

Gas retail as of the nature common in estates and smaller towns, where the dealers are independent selling the brands of different oil companies, operate s on a legal grey area. Legalities touching on licensing, wholesale sour ces , equipment, location and setting. The fact that many are ab le to acquire county government business permit licenses, survive and thrive does not sanitize the illegal aspects of t he business, and if the law was to be strictly implemented many of them wo uld be forced to close or realign their businesses.

In no way does this mean that the business is not viable or that there are no retailers operating within the law. Not at all. As you will see in this survey consumption of gas is growing, and opportunities abound in some locations.

Before we get to the actual figures on Capital, Revenue & Margins, Competition & Survival, Consumer Behavior, Tips, Tricks and more a little background of the LPG business in Kenya will be of help in understanding the industry, legal loopholes, possible opportunities and trends.

LPG Industry in Kenya

Trade in LPG is to a very large extent guided by the Energy Act 2009 and regulated by th e Energy Regulatory Commission. Others who have a say in different licensing aspec ts of the business include county governments and state organizations like Energy Regulatory Commission and National Environment Management Auth ority (NEMA).

Prior to 2009 g as cylinders were locked to particular oil companies that marketed them. This was through company specific cylinder valves. For instance a Totalgaz cylinder valve from Total Kenya could only fit a Totalgaz cylinder and so forth.

As a consumer it was not possible to interchange a Total Cylinder with a K – Gas. This meant that if your Totalgaz run out, you had to look for a Total Petrol Station for a refill. If there was a Kenol Kobil Petrol station located a hundred meters from your house and the Total station 2 kilome ters away, then you had no option but to transport your cylinder to the latter in exchange for another.

In 2009 the government through legislation decided that gas cylinder valves were to be standardized. Out went the company specific valves and in came the universal valve which could fit any gas cylinder irrespective of the brand . The standardization was partially in response to pressure from small independent oil marketers who felt without such a move the re was no way they could compete in a market dominated by big wel l funded multinationals.

Majority of the consumers are not aware of cross filling and other workings of the LPG industry . All they want is gas, and conveniently so.

Big oil companies have started pushing for the reintroduction of company specific valves, quoting safety concerns, revenue leakages and tax evasion by the illegal wholesalers. The government has not shown any indication of reversing the 2009 legislation . Perhaps before a blanket reversal there will be more efforts to have the ERC and other regu latory bodies like NEMA and the police reign in on cross refilling and illegal refilling.

Meanwhile some companies have started experimenting with RFIDs to trace the movement of their cylinders; from their depot s to the consumer and back. It’s still early to determine the success of such efforts . Other companies are using universal but self sealing valves, meaning the cylinder protects itself from refilling by other wholesalers. It will take quite some time for these measures to have any impact since many cylinders are circulating within the informal channels.

Despite all the hiccups about 95% of the oil companies who are members of the cylinder exchange pool consider the LPG business profitable. The profits and relatively high in the business will continu e to attract illegalities.

Download Gas(LPG) Retail Business Plan / guide here

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The lpg power generation advantage.

Posted by ----->Admin --> on Mon, Dec 17, 2018 @ 02:30 PM

LPG Power Generation - LPG Storage & Regasification Infrastructure - Tanks & Equipment - EPC_

Liquefied petroleum gas (LPG) is gaining awareness as an important fuel consideration for off-grid power generation, with a growing track record of success.

While natural gas is an obvious choice for homes and businesses in close proximity to natural gas pipelines, in remote areas, island locations, and in countries lacking established pipeline infrastructure, natural gas delivery can have costly obstacles.

For its efficient and safe transportation, natural gas must be cooled to extremely low temperatures of approximately -160 °C (−260 °F), transforming it to a liquid state known as liquefied natural gas (LNG). LNG must be maintained at a constant temperature during transport and storage, requiring significant investment in purpose-built receiving terminals and on-site cryogenic storage and vaporization solutions.

Propane on the other hand, is easily liquefied under modest pressure and can be efficiently transported as a liquid (liquefied petroleum gas or LPG) via marine, truck or rail, using readily available storage tanks and equipment .

In contrast to the significant infrastructure demands and lengthy cycles associated with the implementation of off-grid natural gas, the use of propane fuel can be quickly implemented, at virtually any location, and at lower cost, making it a favorable solution for power generation in both remote and off-grid locations.

LPG Power Generation Poised for Growth

Driven by the shale gas revolution and to a lesser extent by associated natural gas market growth, propane has experienced record production in recent years, making it abundantly available and easily accessible in world markets.

The United States—a net propane importer prior to 2010—is now leading the world as the largest exporter of propane, according to the U.S. Energy Information Administration (EIA). Indeed, as reported by EIA, the U.S. exported 905,000 barrels of propane per day in 2017, making it the second-largest U.S. petroleum product export, with broad distribution to over 50 destinations worldwide.

The U.S. supply makes propane particularly compelling in areas dependent on imported fuel, such as the Caribbean and Central America, where TransTech Energy has witnessed an uptick in LPG plant orders regionally, including its recent 28 MW LPG-fired power plant for Roatan Electric Company (RECO), built in partnership with Wärtsilä.

Abundant supply, relative low cost and ease of implementation have already established propane as a desirable solution for heating, cooking, agriculture and transportation throughout the world. These benefits combined with other advantages suggest propane will have an expanding role within the global power generation sector in the coming decades.

Due to its low carbon content, propane is a relatively clean burning fuel that presents no threat to soil, surface water, or groundwater and considered a ‘clean fuel’ by the U.S. Department of Energy (DOE).

Pounds of CO2 emitted per British Thermal Units - BTU- of Energy for Various Fuels

Propane also delivers a favorable energy density over other fuels, offering more than twice the energy of natural gas as measured in BTU’s. In other words, on a per unit basis, propane delivers double the amount of heat offered by natural gas, which ultimately results in using less fuel (one cubic foot of propane = 2,516 BTUs, whereas one cubic foot of natural gas = 1,030 BTUs).

As policy makers the world over continue to focus on the importance of renewables, and with coal and heavy fuel oil increasingly losing favor for both poor emissions and unfavorable economics, propane is uniquely positioned to both support more stringent emissions regulations and help pave the way towards cleaner alternative energy.

LPG Power Generation Applications

For existing remote and off-grid power suppliers switching to natural gas requires the conversion of oil, diesel, or coal-fired power generators to gas-fired units. With the current, relatively lower cost of natural gas, there is a strong case for fuel switching , using propane as an interim fuel, with returns recognized within favorable time frames. Even more compelling is the case when new power plants are needed to satisfy growing electricity demand, and the expense of fuel conversion can be avoided altogether.

In some cases, in areas where natural gas will be available in the future, governments are exploring LPG as a ‘bridge’ fuel as an interim strategy until LNG infrastructure can be built over the longer term.

Certain power generating engines are capable of combusting LPG and natural gas, interchangeably, allowing users to begin benefitting from lower-cost, cleaner burning propane today, and preparing them to leverage low-cost natural gas once it becomes available in the future.

LPG can also be used as a standby fuel source. Should there be an interruption in the natural gas supply ‘Peak shaving’ strategies allow users to supplement natural gas consumption with propane to off-set high prices during times of peak demand and/or to compensate for natural gas supply shortfalls.

Multi-fuel engines—which can burn a variety of fuels including LPG, ethane, condensate, and naptha in addition to natural gas—also allow customers greater fuel flexibility, with the option to always choose the most affordable fuel supplies available – or to choose fuels that may be more readily available than others, depending on the circumstances, such as during natural gas curtailment.

For decentralized, distributed power generation models and combined heat and power (CHP) applications, clean-burning LPG is again an obvious choice, offering an economical and environmentally friendly alternative to conventional fuels and delivering ROI within highly desirable time frames.

Importantly, LPG is also gaining interest as a supplemental or back-up fuel to compliment power generated from renewable energy sources and technologies—including solar and photovoltaics (PV) and wind power generation—which can be prone to interruption.

With abundant propane output expected to continue through 2040 and beyond, TransTech anticipates burgeoning growth of LPG power generation capacity in the coming decades.

LPG Propane production - millions of barrels per day copy

“We are continuing to see a significant increase in the demand for LPG terminal storage and LPG gasification equipment to fuel power generation applications in the Caribbean and Latin American markets” said Mark Wenik, Market Director, Terminals & Power Generation, TransTech Energy.

Modular LPG Storage Infrastructure - Tanks & Vaporization Equipment for LPG Power Generation - EPC

TransTech Energy supplies complete LPG storage and handling infrastructure solutions to support LPG power generation , including distributed power generation and CHP , as well as back-up power generation .

Our scalable bulk LPG storage solutions provide an ideal solution for supporting high levels of LPG consumption, with storage tanks available in an array of sizes up to 120,000 gallons and more.

TransTech also offers custom engineered and turn-key solutions and services for LPG storage and gasification, including:

New and used LPG storage tanks
Custom ASME Vessel fabrication
LPG vaporization and blending systems
Bulk plant engineering & construction
Terminal engineering & construction
Logistics coordination

TransTech Energy also provides comprehensive, best-in-class solutions for liquefied natural gas ( LNG) storage and re-gasification across the full LNG value chain, for all off-pipeline applications.

Tags: LPG Power Generation , LPG Storage & Handling , LPG Storage Infrastructure Solutions , LNG Storage & Handling , off-grid power generation , LPG back-up fuel

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US’s largest public utility ignores warnings in moving forward with new natural gas plant

President and CEO of the Tennessee Valley Authority Jeff Lyash listens during a board of directors meeting, Wednesday, May 8, 2024, in Nashville, Tenn. (AP Photo/George Walker IV)

Members of the Tennessee Valley Authority Board of Directors listen to members of the public during a meeting, Wednesday, May 8, 2024, in Nashville, Tenn. The nation’s largest public utility is moving ahead with a plan for a new natural gas plant in Tennessee despite warnings that its environmental review of the project doesn’t comply with federal law. (AP Photo/George Walker IV)

Paul Klein speaks during a Tennessee Valley Authority Board of Directors listening session Wednesday, May 8, 2024, in Nashville, Tenn. The nation’s largest public utility is moving ahead with a plan for a new natural gas plant in Tennessee despite warnings that its environmental review of the project doesn’t comply with federal law. (AP Photo/George Walker IV)

Nanette Mahler speaks in opposition of a proposed natural gas plant planned for Cheatham County during a Tennessee Valley Authority Board of Directors listening session, Wednesday, May 8, 2024, in Nashville, Tenn. The nation’s largest public utility is moving ahead with a plan for a new natural gas plant in Tennessee despite warnings that its environmental review of the project doesn’t comply with federal law. (AP Photo/George Walker IV)

Tennessee Valley Authority Board of Directors member Wade White listens to members of the public meeting, Wednesday, May 8, 2024, in Nashville, Tenn. The nation’s largest public utility is moving ahead with a plan for a new natural gas plant in Tennessee despite warnings that its environmental review of the project doesn’t comply with federal law. (AP Photo/George Walker IV)

Tennessee Valley Authority Board of Directors Chairman Joe Ritch listens during a public meeting, Wednesday, May 8, 2024, in Nashville, Tenn. The nation’s largest public utility is moving ahead with a plan for a new natural gas plant in Tennessee despite warnings that its environmental review of the project doesn’t comply with federal law. (AP Photo/George Walker IV)

Cheatham County resident Angela Moore, center, speaks against a proposed natural gas plant in her area during a Tennessee Valley Authority Board of Directors listening session Wednesday, May 8, 2024, in Nashville, Tenn. (AP Photo/George Walker IV)

FILE - In this Aug. 7, 2019, photo, the Kingston Fossil Plant stands near a waterway in Kingston, Tenn. The nation’s largest public utility is moving ahead with a plan for a new natural gas plant in Tennessee despite warnings that its environmental review of the project doesn’t comply with federal law. The Environmental Protection Agency asked the Tennessee Valley Authority in a March 25, 2024 letter to redo several aspects of its environmental impact statement for converting the coal-burning Kingston Fossil Plant. (AP Photo/Mark Humphrey, File)

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NASHVILLE, Tenn. (AP) — The nation’s largest public utility is moving ahead with a plan for a new natural gas plant in Tennessee despite warnings that its environmental review of the project doesn’t comply with federal law. The Tennessee Valley Authority announced in April that it would replace the aging coal-burning Kingston Fossil Plant with gas amid growing calls for the agency’s new board of directors to invest in renewables.

The board, with six of nine members appointed by President Biden , is expected to meet on Thursday in Nashville, a day after a planned protest by a coalition of environmental groups demanding the utility stop investing in fossil fuels.

Decommissioning the Kingston plant, the site of a massive 2008 coal ash spill , is part of TVA’s overall plan to reduce its reliance on coal. In analyzing alternatives to replace the plant, the utility considered either a new 1,500-megawatt gas plant or 1,500 megawatts of solar combined with 2,200 megawatts of battery storage. TVA concluded that a 2027 deadline for retiring the current plant does not give it enough time to develop the renewables alternative.

The Environmental Protection Agency asked the utility in a March 25 letter to redo several aspects of its analysis, citing “numerous” concerns with the plan to install new gas turbines . Among other things, the EPA accused the utility of defining the Kingston project so narrowly that only its predetermined choice of a new gas plant would meet the parameters, making the evaluation process a “foreordained formality.” EPA said the utility did not adequately explain the need for the 2027 closure or look at possible alternatives.

FILE - The Marshall Steam Station coal power plant operates March 3, 2024, near Mooresville, N.C. A rule issued April 24, 2024, by the Environmental Protection Agency would force power plants fueled by coal or natural gas to capture smokestack emissions or shut down. (AP Photo/Chris Carlson, File)

The EPA said the environmental review does not meet the requirements of the National Environmental Policy Act, which requires federal agencies like the Tennessee Valley Authority to assess the environmental impact of proposed actions before making a decision.

TVA declined to follow the Environmental Protection Agency’s suggestion for a do-over. It decided in April to forge ahead with gas — continuing to follow a plan of action that the EPA says fails to consider recent changes in the energy sector, including falling prices for renewables, billions of federal dollars for clean energy projects, and ever stricter environmental regulations . The corporation remains off track to meet the Biden administration’s goal of eliminating carbon pollution from power plants by 2035 to try to limit the effects of climate change .

The utility said in a statement that “we met with EPA following the letter and addressed their concerns.” EPA, meanwhile, maintained in an email to The Associated Press that its request that TVA revise its environmental impact statement still stands.

Dennis Wamsted, an energy analyst at the Institute for Energy Economics and Financial Analysis, said even with TVA’s 2027 deadline, “They could build twice the amount of solar that they say they need and twice the amount of battery storage they say they need.”

Other utilities are taking advantage of price drops, technical improvements and government incentives to build out solar, including in Texas and Florida.

By 2030, Florida Power and Light expects solar to account for close to 40% of its generation, Wamsted said.

“This is a big utility with, you know, the same daily responsibilities as TVA,” he said. “And they are building out solar as fast as they can.”

TVA provides power to 10 million people across seven Southern states. Florida Power and Light serves over 12 million people in that state.

Even if solar doesn’t produce power 24 hours per day, the amount of energy it does produce is knowable and can be planned for, Wamsted said. It can also be paired with batteries that store excess energy during the day to release back to the grid at night. That is already happening on a large scale in California where batteries are providing more than 20% of the power in the system on many evenings, he said.

In Wamsted’s view, many utilities resist the transition to renewables primarily because they are unfamiliar.

He points to an area called the Southwest Power Pool that runs from Oklahoma to Canada and now sees days where 60% or 70% of the system is wind-powered. In the late 2000s, he spoke to grid operators there who were afraid to go above 5% or 10% because they had never done it before, he said.

TVA’s Kingston project is not its first clash with the EPA over gas. The environmental regulator made many of the same criticisms a year ago when the utility decided to build a new 1,450-megawatt natural gas plant at its coal-burning Cumberland Fossil Plant . The Sierra Club and other groups are suing over that decision as well as an earlier one to install gas turbines at a retired coal plant in New Johnsonville. Both lawsuits claim that TVA’s environmental reviews are perfunctory, in violation of the law — similar to the EPA’s criticism of the Kingston plant.

Democratic Sen. Ed Markey, of Massachusetts, a frequent TVA critic, said in a statement to The Associated Press that the corporation should listen to the EPA.

“The National Environmental Policy Act isn’t optional — it’s the bedrock of our environmental protection and community engagement laws,” he said.

Although TVA has not embraced renewables, the utility still says a majority of its energy is carbon-free because 42% comes from nuclear and another 9% is from hydropower. Purchased wind and solar make up another 4% of its energy portfolio. The utility currently produces 1 megawatt of its own solar and has 20 megawatts of battery storage. The Kingston project includes another 3-4 megawatts of solar and 100 megawatts of battery storage. TVA estimates that the new gas plant will produce 1.68 million tons (1.52 million metric tons) of greenhouse gases a year, noting that that is a steep decline from Kingston’s current emissions.

Nationally, coal provided about 16% of U.S. electricity last year, down from about 45% in 2010. Natural gas provides about 43% of U.S. electricity, with the remainder from nuclear energy and renewables such as wind, solar and hydropower.

The Tennessee Valley Authority has said it intends to build 10,000 megawatts of solar by 2035. Wamsted contends that is too far in the future.

“It should be, ‘We’re going to build as much solar as we possibly can now,’ because it’s now that we really need to worry about,” he said. “We don’t need to worry about 10 years from now or 15 years from now.”

Associated Press writer Jonathan Mattise contributed to this report.

US’s largest public utility ignores warnings in moving forward with new natural gas plant

The Tennessee Valley Authority announced in April that it would replace the aging coal-burning Kingston Fossil Plant with gas amid growing calls for the agency’s new board of directors to invest in renewables.

NASHVILLE, Tenn. — The nation’s largest public utility is moving ahead with a plan for a new natural gas plant in Tennessee despite warnings that its environmental review of the project doesn’t comply with federal law. The Tennessee Valley Authority announced in April that it would replace the aging coal-burning Kingston Fossil Plant with gas amid growing calls for the agency’s new board of directors to invest in renewables.

The board, with six of nine members appointed by President Biden, is expected to meet on Thursday in Nashville, a day after a planned protest by a coalition of environmental groups demanding Tennessee Valley stop investing in fossil fuels.

Decommissioning the Kingston plant, site of a massive 2008 coal ash spill, is part of Tennessee Valley’s overall plan to reduce its reliance on coal. In analyzing alternatives to replace the plant, the corporation considered either a new 1,500 megawatt gas plant or 1,500 megawatts of solar combined with 2,200 megawatts of battery storage. Tennessee Valley concluded that a 2027 deadline for retiring the current plant does not give it enough time to develop the renewables alternative.

The Environmental Protection Agency asked Tennessee Valley in a March 25 letter to redo several aspects of its analysis, citing “numerous” concerns with the plan to install new gas turbines. Among other things, the EPA accused the utility of defining the Kingston project so narrowly that only its predetermined choice of a new gas plant would meet the parameters, making the corporation’s evaluation process a “foreordained formality.” EPA said the utility did not adequately explain the need for the 2027 closure or look at possible alternatives.

The EPA said that Tennessee Valley's environmental review does not adhere to the requirements of the National Environmental Policy Act, which requires federal agencies like Tennessee Valley to assess the environmental impact of proposed actions before making a decision.

Tennessee Valley, which is an independent federal agency, declined to follow EPA’s suggestion for a do-over. It decided in April to forge ahead with gas — continuing to follow a plan of action that the EPA says fails to take into account recent changes in the energy sector, including falling prices for renewables, billions of federal dollars for clean energy projects, and ever stricter environmental regulations. The corporation remains off track to meet the Biden administration’s goal of eliminating carbon pollution from power plants by 2035.

Tennessee Valley said in a statement that “we met with EPA following the letter and addressed their concerns.” EPA, meanwhile, maintained in an email to The Associated Press that its request that Tennessee Valley revise its environmental impact statement still stands.

Dennis Wamsted, an energy analyst at the Institute for Energy Economics and Financial Analysis, said even with Tennessee Valley's 2027 deadline, “They could build twice the amount of solar that they say they need and twice the amount of battery storage they say they need."

Other utilities are taking advantage of price drops, technical improvements and government incentives to build out solar, including in Texas and Florida.

By 2030, Florida Power and Light expects solar to account for close to 40 percent of its generation, Wamsted said.

“This is a big utility with, you know, the same daily responsibilities as TVA," he said. "And they are building out solar as fast as they can.”

Tennessee Valley provides power to 10 million people across seven Southern states. Florida Power and Light serves over 12 million people in that state.

Even if solar doesn't produce power 24 hours per day, the amount of energy it does produce is knowable and can be planned for, Wamsted said. It can also be paired with batteries that store excess energy during the day to release back to the grid at night. That is already happening on a large scale in California where batteries are providing more than 20 percent of the power in the system on many evenings, he said.

In Wamsted's view, many utilities resist the transition to renewables primarily because they are unfamiliar.

He points to an area called the Southwest Power Pool that runs from Oklahoma to Canada and now sees days where 60 percent or 70 percent of the system is wind-powered. In the late 2000s, he spoke to grid operators there who were afraid to go above 5 percent or 10 percent because they had never done it before, he said.

Tennessee Valley’s Kingston project is not its first clash with the EPA over gas. The environmental regulator made many of the same criticisms a year ago when the corporation decided to build a new 1,450-megawatt natural gas plant at its coal-burning Cumberland Fossil Plant. The Sierra Club and other groups are suing over that decision as well as an earlier one to install gas turbines at a retired coal plant in New Johnsonville. Both lawsuits claim that Tennessee Valley’s environmental reviews are perfunctory, in violation of the law — similar to the EPA’s criticism of the Kingston plant.

Democratic Sen. Ed Markey, of Massachusetts, a frequent Tennessee Valley critic, said in a statement to The Associated Press that the corporation should listen to the EPA.

“The National Environmental Policy Act isn’t optional — it’s the bedrock of our environmental protection and community engagement laws,” he said.

Although Tennessee Valley has not embraced renewables, the utility still says a majority of its energy is carbon-free because 42 percent comes from nuclear and another 9 percent is from hydropower. Purchased wind and solar make up another 4 percent of its energy portfolio. The corporation currently produces 1 megawatt of its own solar and has 20 megawatts of battery storage. It estimates that the new gas plant will produce 1.68 million tons of greenhouse gases a year, noting that that is a steep decline from Kingston's current emissions.

Nationally, coal provided about 16 percent of US electricity last year, down from about 45 percent in 2010. Natural gas provides about 43 percent of US electricity, with the remainder from nuclear energy and renewables such as wind, solar and hydropower.

The Tennessee Valley Authority has said it intends to build 10,000 megawatts of solar by 2035. Wamsted contends that is too far in the future.

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