Nigeria’s role as a major natural gas player is due to their large base of proved natural gas reserves and importance as a natural gas exporter. As of 2014, Nigeria had five billion, one hundred and eleven million (5,111,000,000) cubic metres of proved natural gas reserves. This gave them the ninth most proved natural gas reserves in the world and the most proved reserves in Africa.

However, Nigeria’s overall natural gas production is relatively low based on their large amount of proved natural gas reserves. Nigeria produced forty-three billion, eight hundred million (43,800,000,000) cubic metres of natural gas in 2014, which only made them the world’s ninetenth (19th) largest producer of natural gas globally. 

However, this natural gas production represented a six point six percent (6.6%) growth compared to the previous year and Nigeria’s proved natural gas reserves illustrate that they have the opportunity to further grow production in the future.

Nigeria is also one of the world’s largest exporters of natural gas via liquefied natural gas (LNG). Nigeria exported twenty-five billion, three hundred million (25,300,000,000) cubic metres of natural gas as liquefied natural gas (LNG)  in 2014, which made them the fourth largest liquefied natural gas (LNG) exporter in the world and the largest liquefied natural gas (LNG)  exporter in Africa. Nigeria exported this liquefied natural gas (LNG) to a multitude of countries and regions. 

However, the Asia Pacific region overall was the main importer of Nigeria’s liquefied natural gas (LNG) in 2014 having imported thirteen billion, three hundred million (13,300,000,000) cubic metres, while Japan specifically was the largest importing country at six billion five hundred million (6,500,000,000) cubic metres. Additionally, Nigeria also exports a small amount of pipeline natural gas through the West African Gas Pipeline.

Nigeria’s current proven gas reserve has gone up to two hundred and two trillion (202,000,000,000,000) cubic feet (cf) from the initial figure of one hundred and niety-nine trillion (199,000,000,000,000) cubic feet (cf), the Nigerian National Petroleum Corporation (NNPC) has disclosed.

The corporation also stated that the country’s unproven gas reserve is now about six hundred trillion (600,000,000,000,000) cubic feet (cf).

Nigeria’s current gas production is in the region of eight billion, five hundred million (8,500,000,000) standard cubic feet per day (scfd).

Of this volume about three billion, seven hundred million (3,700,000,000) standard cubic feet per day (scfd), representing forty-three percent (43%) of total gas production was exported, while two billion, seven hundred million (2,700,000,000) standard cubic feet per day (scfd) representing thirty-two percent (32%) of total gas production is used upstream for gas re-injection and gas-lift, one billion, five hundred million (1,500,000,000) standard cubic feet per day (scfd) representing eighteen percent (18%) of total gas production is used domestically for power generation and industries, while the balance of six hundred million (600,000,000) standard cubic feet per day (scfd) representing seven per cent of total gas production is currently being flared at fields in the Niger Delta.

Despite this abundant reserve base, its utilization in the domestic sector is grossly inadequate and the country is yet to fully benefit from her natural gas endowment.

Nigerians and people everywhere use petroleum products as a fuel in their automobiles, generating sets, industrial plants and for cooking purposes, thus making petroleum products an essential commodity that is needed for the daily operations of individual, industrial and national activities. 

Undoubtedly a vast investment potential exists in the domestic liquefied petroleum gas filling sub-sector of the oil & gas industry in Nigeria. A large proportion of the middle and upper socio-economic class of people depend on gas for cooking purposes. So are industries, government establishments, hotels, hospitals, restaurants, bakeries e.t.c

A statistic for the country some years ago showed that a mere five percent (5%) of the consumption potentials of liquefied petroleum gas (LPG) were attained. 

With huge gas reserves of two hundred and two trillion (202,000,000,000,000) cubic feet (cf) and the Nigerian government's strong commitment to developing the gas industry through the Gas Master Plan, there are a lot of emerging opportunities for investors in the sub- sector.

With less than one (1) kilogramme per capita consumption, Nigeria ranks among the lowest liquefied petroleum gas consuming states in Africa despite its huge gas resources.

Since around 2007 till now, liquefied petroleum gas (LPG) demand/supply market in Nigeria has grown from a mere seventy thousand (70,000) metric tons per annum market to over one million, one hundred thousand (1,100,000) metric tons per annum, pulling along with it, massive investments in liquefied petroleum gas (LPG) infrastructure along the value chain.

Along with growth in the market, the liquefied petroleum gas (LPG) market in the last ten to twelve (10-12) years as witnessed the development of over five (5) privately financed, owned and operated liquefied petroleum gas (LPG) coastal terminals in Lagos, Calabar and Port Harcourt, with total storage in excess of thirty-five thousand (35,000) MT, along with liquefied petroleum gas (LPG) ship loading/offloading jetties, liquefied petroleum gas (LPG) cylinder bottling plants, liquefied petroleum gas (LPG) mini plants, liquefied petroleum gas (LPG) road delivery tankers which have particularly seen a growth from less than one hundred (100) trucks twelve (12) years ago to over one thousand and fifty (1,050) as at last count in 2017.

The above does not include the effort made by Nigerian National Petroleum Corporation (NNPC), with the revival of the nine liquefied petroleum gas (LPG) butanization plants strategically located in major cities and towns in across Nigeria’s geo-political regions, adding nine thousand (9,000) MT to its already existing four thousand, five hundred (4,500) MT storage terminal in Apapa-Lagos, and returning them to profitable operations. 

So in all, Nigeria’s coastal and inland liquefied petroleum gas (LPG) terminals can boast of aggregate storage capacity over fifty thousand (50,000) MT as at today.

More succinctly, a captive market of over two hundred million (200,000,000) people, growing at the rate of about two point seven percent (2.7%) per annum with an estimated economic growth rate of five point seven percent (5.7%) in the past five (5) years, the market for liquefied petroleum gas (LPG) in Nigeria, is established, growing and sustainable.

The major barrier to the proliferation of liquefied petroleum gas (LPG) in Nigeria at the moment is infrastructure for storage and distribution to the end users and majorly price instability of the product.

Consequently, this has opened - up a lot of opportunities in the industry and one of such opportunities is the production of liquefied petroleum gas (LPG) cylinder in Nigeria.

Local gas cylinder manufacturing scheme is supported by section fifty-three (53) of the Nigerian Content Act, which prohibits the importation of welded steel products.

Liquefied petroleum gas (LPG) Cylinder is an essential item for filling liquefied petroleum gas used for cooling purpose. 

The body of liquefied petroleum gas (LPG) cylinder is deep drawn in two pieces then these are welded together to make a compact unit without any leak and defect etc. 

Liquefied petroleum gas (LPG) cylinders are in use in three (3) kilogrammes, six point twenty-five (6.25) kilogrammes, twelve point five (12.5) kilogrammes and fifty (50) kilogrammes capacities. Though the plant can produce different sizes of the product, we would use twelve point five (12.5) kilogrammes as the reference in the report.

To ascertain the quality, safety and performance certain regulations are applicable such as NIS 69: 2006 standardization. About two point five (2.5) mn cylinders are estimated to be in the country and over seventy percent (70%) of this volume are imported.

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