FG, Rungas Unveil $40m Gas Cylinder Manufacturing Plant

Emmanuel Addeh in Abuja

The federal government has laid the foundation of a $40 million gas cylinder manufacturing plant, located at Alaro City, Lekki Free Trade Zone, Lagos State.

A statement by the Nigerian Content Development and Monitoring Board (NCDMB) which has substantial equity investment in the project, said the Minister of State for Petroleum Resources, Chief Timipre Sylva performed the groundbreaking ceremony yesterday.

The facility alongside its sister plant, Rungas Prime in Polaku, Bayelsa State are being developed with equity investments by NCDMB.

On completion, the facilities have a combined capacity of over 1.2 million cylinders per annum, surpassing the record held by a European firm that currently produces 900 cylinders.
Quoted in the statement, the minister said when completed, the plant would churn out the largest number of cylinders every year globally.

Sylva described the cylinder plant as key to achieving deeper penetration of Liquefied Petroleum Gas (LPG) and Compressed Natural Gas (CNG), in line with the federal government’s commitment to ensuring economic diversification using the oil and gas industry as a pivot.

He stated that cylinders were the most visible element of the LPG value chain, saying the manufacturing facilities will not only bring affordable and durable cylinders to Nigeria but also create many direct and indirect jobs for citizens.
Sylva also commended the NCDMB for recording another milestone in the drive to enhance domestic participation and capacity building of indigenous companies in the oil and gas industry.

In his comments, the Executive Secretary of NCDMB, Mr. Simbi Wabote, gave the expected completion date of the facility as 12 months and highlighted that the board had proven that it delivers anytime it’s involved in a project.

He said the groundbreaking event confirmed that private-public partnership remains a pragmatic and workable model for putting in place the needed infrastructure, facilities and manufacturing base, to position Nigeria for the opportunities that abound in the region and continent.

Wabote listed other interventions by the board in the gas value chain to include development of LPG storage terminals and jetties, inland gas processing for the production of LPG and propane, infrastructure for gas gathering and injection into gas pipeline networks and CNG facilities.

“Our handshake with the Rungas Group will catalyse the transition away from the heavy metallic LPG cylinders. It will also address the issue of high importation of LPG cylinders with the attendant economic losses,” he noted.

Other benefits of the project, he said, include helping to eliminate deaths and illnesses caused by smoke and wood fumes associated with cooking with firewood and bringing the products closer to end-users.

Shedding light on the rationale behind the board’s equity investments in strategic oil and gas projects, Wabote noted that the Nigerian Oil and Gas Industry Content Development (NOGICD) Act mandated the board to build capacities in the oil and gas industry and harness opportunities to create jobs.

He added: “You cannot create jobs if you do not get involved in projects. We expect that during the construction phase, hundreds of people will be involved and during the operations phase, direct and indirect jobs will be created. There is no way to create jobs if you do not create the opportunity.

“As a country we cannot continue to sit and wait for people to bring the opportunities for us. We must create those opportunities so we can employ our youths.

“We have proven the concept with regards to modular refinery and today the Waltersmith modular refinery cannot even meet demand from customers for its products. Imagine that we had done this in the past; today we would not be discussing the issue of fuel availability or scarcity in this country.”

Quoting from the enabling law, he stated that it mandates the NCDMB to assist local contractors and Nigerian companies to develop their capabilities and capacities to further the attainment of the goal of developing Nigerian content in the Nigerian oil and gas industry.

Also speaking, the Chief Executive Officer, RunGas Group, Mr. Lanre Runsewe underscored the importance of triggering local manufacturing of safe cooking gas cylinders and making it a catalyst for the rapid industrialisation of gas-based industries.
He added that it would have been more difficult without the support of the authorities, which would make it expensive to implement the imminent National Gas Expansion Programme (NGEP) rollout, due to lack of locally manufactured safe cylinders.

Runsewe said that the support led to collaborations with the company’s foreign partners, which will result in direct investments of over $40m to produce some of its key raw materials in Nigeria.

Chairman, Rungas Group, Mr Shuaibu Ahmed, expressed the hope that the facilities would produce enough products to meet local demand and export to other countries to earn the nation much needed foreign exchange.