Rungas, NCDMB partner in 3 m/yr gas cylinder production

Sopuruchi Onwuka

Indigenous gas cylinder producer, Rungas, will in next 18 months scale up output to over 3.0 million type 3 composite cylinders per annum.

General Manager, Tarilate Iyabi, who spoke with The Oracle Today in Yenegoa, Bayelsa State, stated that the capacity boost would be driven with government’s support after striking a partnership deal with the Nigerian Content Development and Monitoring Board (NCDMB).

The eco friendly cylinders, according to him, would be produced at the company’s three factories in Lagos, Bayelsa and Kano states from which the company would be producing significant million cylinders per annum.

 Mr Iyabi said the 12.5 kilogram cylinders from the company’s three plants would be a game changer for the government’s gas penetration objectives and in the realization of full resource valorization agenda in the Decade of Gas programme.

The cylinders produced by Rungas, he said, are fire proof and different from the common iron cylinders. Another key feature, he explained, is a gauge that indicates the level of gas in the cylinder.

“Our company is the first in Africa to introduce this technology and our plant will be in three different cities: Bayelsa, Lagos and Kano.”

 

Mr Iyabi said that whereas the company was currently working to bring the Bayelsa plant online in the immediate, the full outlook is to produce cylinders simultaneously from the three market zones in the country. The strategy, he explained, would position the company for market dominance and as key factor in the prevailing gas penetration programme of the government.

The Oracle Today reports that the government is incentivizing private investments in driving enhanced utilization of natural gas in line with the multiple policy agenda of resource optimization, clean fuel promotion, energy availability, displacement of harmful kitchen fumes and deepening of domestic gas fuel market.

Among existing programmes are the national autogas policy which promotes the use of compressed natural gas (CNG) for transportation fuel, the Nigerian gas penetration policy which promotes use of liquefied petroleum gas (LPG) as cooking fuel, and the National Gas Expansion Programme (NGEP) which promotes creation of gas transmission corridors for industrial fuel.

Mr Iyabi said Rungas would from December this year begin wielding strong influence in domestic gas penetration when the Bayelsa plant is expected to roar into life.

In flaunting the projects viability profile as the main attraction to the NCDMB, Mr Iyabi said: “we are coming with this kind of technology to beat the previous generation of gas cylinders” at a time the use of cooking gas is fast spreading across all homes in the country.

“Currently in the market now you will see people carrying the 3kg cylinders with burner to gas filling stations to refill them. That shows the level of gas usage in the country is very high,” he pointed out.

With the rising demand for gas, he said, the demand for gas cylinders is also jumping to unprecedented levels; helping displace firewood as kitchen fuel  and providing huge market for investments in gas supply and cylinder production.

To ensure sustainable supply of gas to customers of the company, Mr Iyabi said Rungas was partnering gas producers and suppliers in driving part of the penetration project to provide the molecules into kitchens.

“We have already partnered with people who are into gas productions and with our system of MDC gas distribution centres that we are setting up, it will not be a problem for us to take these products to the rural areas because we are planning to set up gas distribution centers across the country,” he said.

“The federal government has given us the mandate to ensure that these products get to the inner parts of the country,” Mr Iyabi said, adding that Rungas is partnering gas producing companies to guarantee sales of filled gas cylinders for ready consumers.

The Rungas’ cylinders are filled at the partners’ retail outlets ahead of bottle swapping with customers at consumer retail sites across rural areas in the country. The method, according to hum, saves the consumers the time and cost of searching for refill sites.

On the company’s cylinder production plants, Mr Iyabi said “each of our plants will be manufacturing 1 million 12.5kg cylinders per annum; but for now, the Bayelsa plant will be producing 400,000 cylinders per annum, and Lagos will produce 800,000 per annum.”

He said Rungas has plans to scale the capacity if the cylinder production plants “so that they can have the capacity of 1.0 million cylinders each per annum In average. We are starting this year so by the end of next year we should be having minimum of 800,000 cylinders.”

On partnership with then NCDMB, he said that the company would install a plant in the state for quick win commissioning and subsequent production activation.

The NCDMB had in a separate statement declared that Nigeria would become the world’s largest manufacturer of composite cylinders with the Rungas ALFA plant located at Alaro City, Free Trade Zone, Epe, Lagos State.

The facility alongside its sister Rungas Prime in Polaku, Bayelsa, is developed with equity investments from the NCDMB to produce over 1.2 million cylinders per annum.

The cylinder plants, according to the NCDMB, is key to achieving deeper penetration of Liquefied Petroleum Gas (LPG) and Compressed Natural Gas (CNG), in line with the Federal Government’s commitment to ensure economic diversification using the oil and gas industry as a pivot.

The Oracle Today reports that cylinders are the most visible element of the LPG value chain and the manufacturing facilities will not only bring affordable and durable cylinders to Nigeria but also create countless direct and indirect jobs for citizens.

Erstwhile Mister of State for Petroleum Resources, Chief Timipre Sylva , had commended NCDMB on recording another milestone in the drive to enhance domestic participation and capacity building of indigenous companies in the oil and gas industry.

The Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote, gave the expected completion date of the facility as 12 months and underscored that the agency had proven that it delivers successfully on any project it participates in.

He said that Private-Public Partnership is 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.

He also affirmed the Board’s excitement for being an active participant and a front-runner in taking practical steps to deliver on lofty goals of the ‘’Decade of Gas’’ that is being championed by the Minister of State for Petroleum Resources.

Other interventions by the Board in the gas value-chain 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.

He said NCDMB was deliberate in going for the Type-3 Composite LPG cylinders considering the unique features such as safety, lightweight, and durability. “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 added.

Other benefits of the project 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 mandates the Board to build capacities in the oil and gas industry and harness opportunities to create jobs.

He insisted that “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.”

He advised stakeholders to read the NOGICD Act which established NCDMB. “It clearly mandates the Board to get involved in things like this and ensure the catalysation of manufacturing facilities,” he concluded.

Section 70 (h) of the NOGIC Act states that functions of the Board shall be 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 lauded the NCDMB for triggering the local manufacturing of safe cooking gas cylinders and becoming the catalyst for the rapid industrialisation of gas-based Industries.

He stated that “without the NCDMB initial and extended facilitation for the local manufacture of cooking gas cylinders in Nigeria, it would have been more difficult and expensive to implement the imminent National Gas Expansion Programme (NGEP) roll out, due to lack of locally manufactured safe cylinders. The country would have had to resort to importation.”

He also revealed that NCDMB’s participation and the substantial quantity of cylinders to be manufactured had “triggered a clause in our contractual agreements based on one million cylinders with our Italian, Portuguese Original Equipment Manufacturers which will result in direct investments of over USD$40m to produce some of our key raw materials in Nigeria. We are currently working in conjunction with our Alaro City Partners to position them in this Free Trade Zone.”

Chairman, Rungas Group, Ambassador Shuaibu Ahmed said the facility in Bayelsa was Africa’s first composite cylinder manufacturing plant and expressed hope that the facilities would produce enough products to meet local demand and export to other countries, earning the nation much needed foreign exchange.