As an experience team that have been into LPG business in Nigeria, we want to dedicated this post “How to Start LPG Business, Plant Approval & Licensing in Nigeria” to all who want to start LPG business. The details guild is for starters and for those who may need help our Consultancy service or LPG Design & Installation engineering service.
This post covers the followings:
– How to start LPG business in Nigeria,
– LPG Plant Site Suitability Approval Procedures,
– NUPRC Site Suitability assessment,
– Approval To Construct LPG Plant/ Cooking Gas Plant after site Suitability,
– Requirements for LPG Plant License,
– Idea of the cost of LPG Plant Approval,
– Plant Construction Procedure,
– Procedures for Licensing a newly Completed Plant.
– Procedure for Relocation of existing Plant to a new Site/ Location.
Note: Requirements for construction of LPG Refilling Plant Aboveground Storage Tanks is different from that of Underground Storage Tanks Plant, also different form LPG Add-On in Retail Outlets attached to Petrol Stations. Though they have similarities.
We concentrated on LPG Refilling Aboveground Storage Tanks Plant Construction Approval & Licensing Procedures in this page.
Read: LPG Refilling Underground Storage Tanks Plant
Read: LPG Refilling Retail Outlets attached to Petrol Stations Plant
Before we continue, let me say this “the most important decision to take when you want to go into LPG business is deciding Plant location”.
Read: How to Start LPG Business in Nigeria
What is NUPRC?
Nigerian Upstream Petroleum Regulatory Commission (NUPRC) could be likened to have inherited upstream responsibilities of the defunct Department of Petroleum Resource (DPR) and many more. Department of Petroleum Resource (DPR) was a department under the Nigerian Federal Ministry of Petroleum Resources (FMPR) with the statutory responsibility of ensuring compliance to petroleum laws, regulations and guidelines in the Oil and Gas Industry.
Upstream Petroleum Regulatory Commission (NUPRC) was created by the Petroleum Industry Act (PIA) 2021, signed into law by President Muhammadu Buhari. The beautiful legislation brought to a close, a 20-year effort to reform Nigeria’s oil and gas sector.
What is LPG Plant Construction Approval by NUPRC?
The NUPRC Plant Construction approval is a major requirement when setting up a LPG or cooking gas plant. You cannot operate a LPG plant or cooking gas plant anywhere in Nigeria without the approval of the NUPRC.
But NUPRC approval for LPG/ cooking gas refill plant is in 3 phases. And all the 3 takes place in stages, from the beginning of your gas Plant setup and before the commencement of operation of the gas plant. Even after the gas Plant setup, NUPRC will continue their regulatory oversight for as long as the business exists.
Here are the 3 NUPRC approvals you will need at when setting up a cooking gas refill plant:
- Site Suitability Approval
- Approval to Construct
- License to Operate
These 3 approvals will be issued at different stages of the setup. The first one being the site suitability approval, followed by the approval to construct and license to operate.
LPG Plant Site Suitability Approval Procedures
This is the first step when starting a LPG plant/ cooking gas refill plant. It’s also the first approval required before any thing else is done about starting your cooking gas refill plant. Even though you can actually conduct the physical Suitability test for your location, you will still need the body to give their approval.
It is advisable that you conduct an independent assessment of your location before applying for DPR site approval.
This should have been done even before you purchase the land. But since most of you already have the land even before you think of starting a cooking gas refill plant, just get a cooking gas consultant to do complete site assessment. This independent assessment will ensure both Suitability and viability assessment is done together.
It’s not the job of NUPRC to verify the viability of your location for LPG plant/ cooking gas refill plant. Their job is to approve a suitable site. To ensure that the safety of the people is adhered to and that your LPG plant won’t constitute any environment problem as well.
Read: How to Obtain Oil & Gas Business Permits/ Licenses
DPR Site Suitability Assessment list
Qualified NUPRC staff will physically visit the proposed location for LPG Plant or Cooking Gas Refill Plant foe site Suitability assessment.
There are specific things the commission looks for to give their site Suitability Approval. These conditions must be met before approval for site Suitability be issued to you.
– Land size test will confirm if the land meets the minimum size required for gas plant by the commission
– Closeness to a residential assessment is to ensure it’s at least 15 meters away from any residential building. Although this particular condition maybe conflicting in most cases.
– Closeness to a public place like church, school, market, mosque and any other public place that large number of people gather.
– Closeness to high tension or major power installation or public infrastructure like petroleum pipeline. This one too will cause the commission approval denial.
– Soil contamination test is another requirement. The commission will conduct soil test to ensure underground water will not be contaminated in any way by waste products from your gas refill plant.
Approval To Construct LPG Plant/ Cooking Gas Plant after site Suitability
The next approval after site Suitability assessment is approval to construct. Once the site is suitable and approved by the commission, you can now apply for approval to start constructing your gas refill plant.
The site approval confirms the Suitability of your location for a gas refill plant. And once this is given by the commission, you can apply for the approval to Construct the gas plant.
Read: Nipex Registration Requirements
NUPRC approval to Construct is not just an approval allowing you to start construction of the gas plant. It also approves the design and pipe architecture for the gas plant. It’s more of a design Approval than just go and start constructing.
Note: The validity of the Approval To Construct LPG Plant/ Cooking Gas Plant shall be two (2) years.
Read: Requirements for LPG Plant License
The following requirements are to be met before approval, construction, modification, relocation and licence of a Liquified Petroleum Gas (LPG) plant and auto gas station by Director of Petroleum Resources (DPR) in Nigeria.
- Three copies of the approved drawings showing the existing or proposed buildings on the site and the relevant distances to the
roadways and adjoining properties, if any.
The drawing include:
– Architectural Drawing
– Structural Drawing
– Mechanical Drawing
– Electrical Drawing - Three copies of Piping and Instrumentation Diagram (P&ID) of the gas filling plant and manufacturers’ data sheet of the storage tanks with codes and standards adopted in the design.
- A provisional approval letter and fire report by Chief Federal/State Fire officer or an officer authorized by him on his behalf, that he is satisfied with the proposed arrangement for the prevention of fire.
Note: This approval must come from state where the LPG station will be situated. - A letter from the appropriate Town Planning Authority, authorizing siting of the Liquefied Petroleum Gas filling plant at the proposed site. The Town Planning approval stamps on all design drawings are accepted.
- Three copies of Memorandum and Articles of Association of the company and evidence that the company is duly incorporated by
the Federal Ministry of Trade to deal in petroleum products. - Tax clearance certificate for the preceding three years of application or Tax exemption certificate for new company.
- An application fee, as may be determined by NUPRC, in Bank draft or certified cheque made payable to “Federal Government of Nigeria DPR Fee Account” is payable on submission of application.
- Three copies of Codes, Standards and Specification adopted in the design of the tanks and ancillary equipment.
- A copy of Safety, Health and Environment (SHE) proposal for the proposed plant and Environmental Impact Assessment report of the site.
Cost of LPG Plant Approval Cost
DPR Approval also cost money. The official fee is the same but fee shall depend on storage capacity of the
gas vessel installed at the plant, so the end cost will not be the same
But it’s always advisable to make budget for at least N3 to N5 million for all the stages of approval.
Read: NOGIC JQS and NCEC Registrations (Nigerian Local Content)
LPG Plant Construction Procedure
The regulations and conditions governing the construction of Liquefied Petroleum Gas (LPG) filling plant are as follows:
(a) Liquefied Petroleum Gas must be stored under pressure in vessels designed to withstand safely the vapor pressure at the maximum temperature. Construction of such vessels must be to an acceptable design code such as;
(b) The Nigerian Standards Organization approved standard on pressure Vessels and Liquefied Petroleum Gas containers N1 S220/85.
(c) The American Society of Mechanical Engineers (ASME) boiler and pressure for use in the chemical, petroleum and allied construction, test and certification.
(d) The American Petroleum Institute standard 2510(2).
(e) The British Standards (BS) 1500 PART 1, fusion welded pressure vessels for use in the chemical, petroleum and allied Industries pr BS15500 for new vessels design, construction, test and certification.
(f) The installation/construction of piping, instruments and the plant must be carried out by an accredited DPR Company.
(g) The materials used for the construction of the filling shed must be noninflammable material.
(h) The filling shed must be open-sided for good ventilation.
Procedures for Licensing a newly Completed LPG Plant.
On completion of construction works, the applicant shall notify the nearest DPR office and the following statutory/technical requirements shall be met or provided to facilitate pre-license inspection of the plant:
(a) A completed application form for the grant of LPG license.
(b) Certification from Weight and Measures Division Federal Ministry of Commerce that the measuring equipment installed at the plant are calibrated satisfactorily.
(c) Certification from Standards Organization of Nigeria (SON) that the gas tank meets specifications and is safe for the proposed purpose.
(d) Final fire safety certification issued by Federal or State Fire Department.
(e) Mechanical leak tester.
(f) Gas detector.
(h) Warning notices and Personnel Protective Wears for the Plant operators.
(i) Gas tank and pipeline pressure test reports and certification. These facilities should be pressure tested by DPR accredited company and witnessed by Director’s assigned officer.
If the LPG plant is built according to the approved diagrams and the engineers are satisfied with the safety arrangement of the plant, Management will consider the grant of LPG plant operating license to the deserving company.
All applicants are to note that failure to meet the above statutory and technical requirements or any other which may come into force during the construction of the plant, may lead to non-licensing of the plant for operation.
Read: Buy/ Fabricate Your LPG Tank in Nigeria
Procedure for Relocation of existing LPG Plant to a new Site/ Location.
If a company desires to relocate an existing and a licensed LPG plant to a new site/ location, the applicant must submit the following requirements:
- The justification (reasons) for the proposed relocation of the plant to a, new site.
- Three copies of revised and approved plant layout diagram showing the existing or proposed buildings on the site and relative distances to the roadways and adjoining properties if any.
- Three copies of revised and approved Piping and Instrument Diagram of the gas filling plant.
- Three copies of gas storage tank sectional diagram.
- A letter from the appropriate Town Planning Authority, authorizing siting of the LPG filling plant at the proposed site.
- A provisional approval letter or certificate signed by Chief Federal/State Fire Officer or an officer authorized by him in that behalf that he is satisfied with the proposed arrangement for the prevention of fire.
In summary, the conditions for the grant of Approval to Construct and operating licenses for a new LPG plant shall be the same for relocated LPG plants. With this, you can agree with me when we say “the most important decision to take in LPG business is deciding Plant location”.
Gas Storage Tank Design Specifications and Fittings.
(a) All tanks for the storage of liquefied petroleum gas shall be designed for a working pressure corresponding to the vapour pressure and at the highest temperature that the tanks are likely to reach.
(b) All storage tanks should be fitted with the pressure gauge and devices for measuring the liquid content and its temperature. The maximum quantity of LPG filled into any tank should be such that the maximum operating temperature it would occupy shall not be more than 95% of the capacity of the storage.
(c) Excess flow valve should be fitted to prevent the loss of liquefied Petroleum gases from storage tanks, transport tanks and points where flexible hoses are used. .
(d) Remote control hydraulically operated shut-off valves should be fitted to each storage tank.
(e) Water sprinkler system should be provided on top of the gas vessel. Access ladder to the top of the gas storage should be provided for inspection and maintenance needs.
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Cylinder Filling Shed.
(a) Cylinders should be filled with LPG only in building designed for that purpose. Filling buildings should be open-sided. The filling of cylinder: should not be done in cellars of upper story of building.
(b) Floor should be near ground level or raised to a minimum of 1 meter to vehicle platform height.
(c) A fence of at least 2 meters high should be provided to enclose the filling and gas storage area if the filling is not carried out within a fenced area.
(d) No duct or blow-off line should be directed into or discharged near sewer systems or drains used for other purposes.
(e) Water drains from the filling area should be provided with effective seals.
(f) Piping should be protected or painted in appropriate industrial colour.
(g) Fire extinguisher in sufficient quantity should be provided at strategic places within the premises and the plant personnel should have easy access to the extinguisher.
(h) Cylinders should not be stored in the cylinder filling area. An area within the plant should be designated for cylinders storage.
(i) Adequate lighting should be provided to illuminate the working and the storage areas of the plant.
LPG Plant Design and Installation
General Design:
The design of vessels, vessel fittings, pumps, dispensing systems, hoses, filling nozzles and adaptors and breakaway/pull-away systems should be designed for efficient and safe operations in line with applicable codes and standards.
Installation:
The installation and commissioning of the system should only be undertaken by competent personnel, and in accordance with manufacturer’s instructions.
Written procedures should be drawn up for installation and/or commissioning. Mineral Oils Safety Regulations (MOSR), 1997 should be observed in these installations, particularly the taking of all the necessary measures to reduce risk as much as reasonably practicable, including the replacement of the hazardous by the non-hazardous or by the less hazardous.
CONCLUSION
As we listed, the increase on gas reserves, underutilization of Liquefied Petroleum Gas (LPG) for decades, federal government plan to end gas flaring (mass wastage), the verse and rising Nigerian population, with the intentionally and deliberate acts by authorities to make cooking gas’s main substitute (kerosene) scarce plus cost advantage cooking gas have against its main substitute and many more, LPG Business in Nigeria a way to go. It is a business to invest your money.
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