An indigenous firm, Africa Liquefied Petroleum Gas (Africa LPG) Equipment Company has signed a pact with Kautex Maschinenbau of Germany on establishment of a composite gas cylinder manufacturing plant in the country.
The plant, which would be the first composite gas cylinder manufacturing factory in sub-Saharan Africa, is estimated to gulp about N8.4 billion ($50m) and it would be sited in Lekki Free Trade Zone, Lagos.
The constriction and commissioning of the plant, which would take about 15 months, would help bring down the price of composite gas cylinders that now ranges between N20,000 and N22,000. It is also expected to crash the price of cylinders, encourage the conversion from steel cylinder to composite cylinder and ultimately bridge the huge gap in gas utilisation.
The plant, estimated to have capacity to produce 1,000,000 cylinders yearly, would take off with 150,000 products in the first phase, then progress to 500,000 and ultimately 1,000,000.
The Federal Government through the Nigerian Content Development and Monitoring Board (NCDMB) had placed strict restriction on the influx of imported steel cylinders into the country.
NCDMB had therefore set a target for local manufacture of 5 million gas cylinders by 2015.
Taofiq Tijani, Lagos State commissioner for energy and mineral resources, while speaking during the signing of the pact, said the project was in line with the state government’s Eko Gas project and would therefore enjoy support from this administration.
The state government is particularly excited over the project, because it is being sited at Lekki Free Trade Zone, he sai, saying “we also key into the project because the campaign for LPG usage in the country is at the front burner in the state.”
According to him, the state government has adopted the use of cooking gas as official energy source in place of firewood, kerosene and coal, among others.
The commissioner was also optimistic that the programme would help the state convert the 21 million population to gas usage in the next few years.
LPG is about health of the people, it sits well with the environment, and empowerment of her citizens, he said, adding that there is a lot of great value chains in LPG business.
Olanrewaju Runsewe, chairman and managing director, Rungas Limited (a mother company of Africa LPG), who spoke after the signing ceremony, said the plant would be a one-stop point for LPG product and accessories, noting that the LPG city would parade a steel and composite cylinder manufacturing facility, a bottling plant, cylinder cages and racks, and gas vending machines, among others.
He praised the efforts of President Goodluck Ebele Jonathan for creating the environment for such companies to thrive even the face of mounting challenges.
Runsewe said the projects would take Nigeria from the era of cylinder importation to the state of manufacturing and therefore enhance access to the product and promote the gas utilisation agenda.
Although the plant is designed to produce both steel and composite cylinders, he said it would commence with composite cylinders (otherwise called transparent cylinders) due to its numerous benefits.
Besides, he said the project would align with the clean environment campaign, as it would drastically phase out the use of firewood, kerosene and candle.
He said Nigeria had suffered so much from the gas infrastructure deficit comparing Brazil with 196 million population using 100 million cylinders and Nigeria with 160 million people using 1.8 million cylinders.
Siegfried Eckert, technology manager, technical sales and project of Kautex Maschinenbau, said “the company is delighted to partake in Nigerian market, particularly making it standard products play significant impact in boosting the nation’s gas sector.”
He encouraged the use of the new cylinder technology – composite cylinder due to its advantages, which include lighter weigth and extreme safety features.
Tari Omonibo, who representated the Nigerian National Petroleum Corporation (NNPC Retails), said the corporation was delighted about the initiative and ready to progress with the partners in the course.
“We will equally be interested in mobile filling plant. We are happy and we are ready to work with the partners,” he said.
Olusola Bello
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