ISSUE 07 | APRIL 2017 | USD 30 CHANGING THE FACE OF THE LPG INDUSTRY: WOMEN IN LPG GLOBAL NETWORK (WINLPG), A GLOBAL NETWORK FROM THE WORLD LPG ASSOCIATION (WLPGA) INTERVIEW WITH ALISON ABBOTT THE DIRE IMPORTANCE OF GOOD INDUSTRY PRACTICES FOR LPG: A LOOK AT WLPGAâ€™S GUIDELINES SPECIAL THANKS TO DAVID TYLER LPG CONSUMPTION IN KENYA - IS THERE A CASE FOR SUBSIDY? BY CHRINUS OTIENO HOW TO START A COOKING GAS BUSINESS IN NIGERIA? BY UWANDU IFEANYI
A DAY IN THE LIFE OF AN LPG PLANT SUPERVISOR IN ABU DHABI INTERVIEW WITH AKINJIYAN OLATUNBOSUN OLAKUNLE Technical Operations LPG Filling Plant Supervisor, ADNOC Distribution
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We are always pleased to find out that the LPG market in Africa continues to show promise with each passing day. LPG Associations are working hard to create more awareness of this life saving gas across the continent through new events and projects. Many private companies are also beginning to work together with these groups and we could not be any happier to see this happening in the marketplace. There has also been increasing work on legal standards in Nigeria and a big push by regulators to do away with uncertified facilities operating illegally. This is absolutely necessary for such a large LPG using nation like Nigeria, which has potential for growth unlike any other in Africa and possibly even the world. The idea is that if their market can adapt and mature through stricter laws and standards, it will only be matter of time before other African nations follow suit. We can only hope that this move by the regulators is carried out with an utmost urgency and seriousness. Nigeria will likely be the trend-setter for the rest of Africa in the years to come. The sheer size and potential of the market there, if developed, will send a wave throughout the continent that will change the entire industry there. We continue to watch and wait in anticipation and will be keeping a sharp eye on what goes on there. We recommend you do too. In this issue, we have interesting interviews with WLPGA Communications Director, Alison Abbott, who talks to us about WINLPG’s recent works in Africa and another stellar interview with Akinjiyan Olakunle, Technical Operations LPG Plant Supervisor at ADNOC LPG, who talks to us about the daily operation of an LPG filling plant in Abu Dhabi. The issue also has another three articles; one on whether subsidy would help the LPG market in Kenya, another that takes a look at WLPGA’s guidelines for good industry practices and also one that talks about how someone would go about starting a cooking gas business in Nigeria. As always we treasure your feedback and are always looking for new partners and contributors. Do write in to us if you feel we could work together or if you had any comments on our articles. We wish you the best in your business and hope that we continue to narrow the gap between markets and assist in growing the LPG market in Africa to reach ever greater heights for the good of all.
Ryan Pasupathy Editor
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CONTENTS INTERVIEWS: 09
A Day In The Life Of An LPG Plant Supervisor In Abu Dhabi Interview With Akinjiyan Olatunbosun Olakunle
Changing The Face Of The LPG Industry: Women In LPG Global Network (WINLPG) A Global Network From The World LPG Association (WLPGA) Interview With Alison Abbott
The Dire Importance Of Good Industry Practices For LPG: A Look At WLPGAâ€™s Guidelines Special Thanks to David Tyler
LPG Consumption In Kenya - Is There A Case For Subsidy? By Chrinus Otieno
How To Start A Cooking Gas Business In Nigeria? By Uwandu Ifeanyi
NEWS: 03 FGE CONFIDENTIAL: 36 STATISTICS: 39
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WORLD LP GAS NEWS INFRASTRUCTURE
Construction will start on a R350m LPG cylinder manufacturing facility in Coega Industrial Zone in South Africa. Chief executive, Manana Bogatsu of MM engineering, said the new facility, which would create 71 jobs, had a production target of 500,000 cylinders during its first phase and year of operation, after which, at full capacity, the plant would produce 1.5 million units a year, or 3 200 cylinders a day. - Herald Live President Nana Addo Dankwa Akufo-Addo has cut the sod for the commencement of construction of the 400-MegaWatt Bridge Power project in Ghana, the worldâ€™s largest LPG-fired power plant. - Star FM Online
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NEWS TRADE & SUPPLY CHAIN
Consumers in Uganda feeling burdened as they are paying almost twice (UShs 110,000) what their counterparts in in Kenya (UShs 72,000), Rwanda (Shs 52,000) and Tanzania (UShs 42,000) are paying for a 13 kg refill. This has been attributed to market forces, tax cuts and freight costs involved in Uganda. - Daily Monitor The West Africa Gas Ltd. (WAGL) has taken a step further towards becoming a fully-integrated energy company by ordering and completing the construction of a Liquefied Petroleum Gas vessel for commercial activities. WAGL currently has a Gas Sale Agreement with the Government of Ghana for the supply of 180,000 scf of LPG. - Peace FM Online Dayo Adeshina, President of the Nigerian Liquefied Petroleum Gas Association (NLPGA) said that the LPG market in Nigeria is poised to grow by 12,000 tonnes in Q2 2017. He said that this development will bring about better opportunities for Nigerians against recent scarcity which led to hike in the prices of LPG across the country. - Naija Daily Feed New MD of Engen Mauritius vows to ensure outstanding execution of Engenâ€™s base business and also mentioned his interest to grow the Marine Segment and enter the LPG business. - Engineering News LPG Prices in Nigeria remain high showing significant year-on-year increase. The average price of a 5 kg cylinder of cooking gas at N2,589.84 was about 28.8 per cent higher than the N2,010.60 recorded in the preceding quarter. - All Africa
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LEGAL & SAFETY
WINLPG appealed to the federal government to take bold and proactive steps by enacting a law on safe cooking in Nigeria. The National Coordinator of the Nigerian Chapter of WINLPG under the Nigerian Liquefied Petroleum Gas Association (NLPGAS), Mrs. Nkechi Obi, said the legislation had become imperative in view of the health hazards associated with the use of dirty fuels. - This Day Live The Standards Organisation of Nigeria (SON) has warned marketers with uncertified LPG storage tanks across the country to get the standardisation and certification of the facilities or have them shut down. They have given a two-week ultimatum to all owners of LPG storage tanks nationwide to commence the process of SON certifications or have the tanks dismantled. - This Day Live Kenya bans LPG inland imports from Tanzania. Kenyan Petroleum Principal Secretary Andrew Kamau said traders will not be allowed to import gas via land borders to Kenya. Mr. Kamau says that this is meant to eliminate illegal cooking gas filling plants. - All Africa
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NEWS EVENT & INNOVATION
The Strategic Support to the Clean Cooking Sector in Ghana (SSCCSiG) project has been launched in Accra with the aim to support stakeholders engaged in clean cooking market development to build an enabling environment. - Ghana Business News LITE Gas has begun free distribution of 450 units of LPG cylinder bundles to members of religious bodies in Lagos State, Nigeria, under the Eko Gas project. The bundles included a complete set of a filled cylinder, mesh, a regulator and a cooker ring. - The Nation Online Paygo Energy, a Kenyan energy startup providing clean cooking fuel for the mass market on a pay-as-you-go basis, has raised US$1.43 million in a Series Seed funding round to build its next gen smart meters and expand across Nairobi, Kenya. The company developed a smart meter to work with gas cylinders and cook stoves which it delivers directly to households who register for its PayGo service and pay a small upfront fee. - Techloy.com Shell has sealed a deal to sell its remaining 20 per cent shareholding in Vivo Energy for $250 million (Sh25.5 billion) to Dutch firm Vitol Group, after getting approval from regulators. - Business Daily Africa
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Fuelling New Markets
Conference & Exhibition Palais des CongrĂ¨s de Marrakech
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A DAY IN THE LIFE OF AN LPG PLANT SUPERVISOR IN ABU DHABI INTERVIEW WITH AKINJIYAN OLATUNBOSUN OLAKUNLE Technical Operations LPG Filling Plant Supervisor, Adnoc Distribution
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Mr. Akinjiyan Olatunbosun Olakunle, Technical Operations LPG Filling Plant Supervisor, Adnoc Distribution
Tell us about your journey towards and throughout the LPG industry. Let me start by saying that I’m an international Law and Diplomacy graduate. Before this however, in 2003, I started working in an oil company in Nigeria that I worked at for 3 years as a supply operator. I started off with no experience so it was here that I started taking a lot of courses and meeting with a lot of people which slowly grew my passion for the oil and gas industry. In 2007 I knew there was no way to continue without a University degree so I had to stop work and went to Babcock University in Nigeria which is where I pursued my International Law and Diplomacy Degree. I
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completed my Bachelor’s degree in 2011 and then started my Master’s in International relations the following year, completing it in 2014. After completing my Master’s, I was looking for new challenges and chanced upon an opportunity to go to Abu Dhabi later that year. My actual plan was just to head to Abu Dhabi for a while and enjoy the attractive salary package which was much better than what I could get back in Nigeria. This job I applied for and eventually got was as a customer care staff at Emirates Bowling Village. The job was simple, but I need to say again that this pay was much more than anything back home.
In the beginning, adjusting was not easy and quite stressful and during this time I was constantly searching and applying for other jobs that were closer to my passion. It just so happened that I was lucky enough to be called back by ADNOC for an interview as a supply operator. It would seem that my past experience helped me a great deal. I was extremely fortunate to have then cleared the interview and eventually got the job. It was then in August 2015 that I started my new career working with ADNOC. I resigned from my customer care position and promptly began work with ADNOC.
What are some of your most notable experiences/ achievements? First off, let me just say that ADNOC has been a lovely place to work at. When I arrived in ADNOC I began work as a Supply Operator. In less than 5 months I was sent to work in the Dispatch Department as a team member. From here I worked hard and became Dispatch Foreman. Following this I was then sent to the filling plant as a team member and here too I worked my way up to become Filling Plant Supervisor. It was one step at a time, from one experience to the next, gaining knowledge each at each stage. Having been at 3 different
departments now I can really say I have learned so much here. I am currently also working in a new department - The Control Room where I oversee operations in the filling plant. This latest role means that in this short span of time I have worked in 4 different departments; Dispatch, Filling Plant, Bottling and now in the Control Room. It’s a massive thing for me and I feel I’ve really grown since I first started. I never knew I’d grow so fast like this. The growth rate has been almost exponential. I’d also like to say that ADNOC is a really good company that appreciates your effort, when they see that you are good, they use you and you are rewarded
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for your hard work. I’ll say this everytime; I really appreciate working in a big company like ADNOC, for how they have treated me and given me vast experience and paying me well for my ‘sweat and blood’. UAE LPG MARKET What stage do you feel the LPG industry in UAE is in? The UAE LPG market is in its matured stage. I say this because I feel it has met with so many of the people’s and government’s demands. It has paved the way for LPG use in a lot of things such as for electricity generation, autogas, refrigeration and mostly cooking. It has provided gas to both old and new industries and become a real source of energy. With the way its growing here, people are beginning to stop relying on other types of fuel completely. Houses and cars run on LPG, even big industries run on LPG. Its growing at a really fast rate now. People take it very seriously and they actually prefer it to other types of fuel. It’s easy to handle and is safe to use when done properly.
What sort of yearly production of LPG does Abu Dhabi have? Abu Dhabi’s LPG output is expected to be about 13 million MT this year. What is the price of LPG in the UAE? Is this cost subsidized? The gas itself is subsidized and operates using the Rahal eGas Card System to make LPG affordable by anyone. The cards provide an allowance for the subsidized gas, with Emiratis receiving the highest allowance. Gas cylinders for Emirati families can be subsidized up to 150 AED per month, while single people can use up to 70 AED. Expatriates or resident families can consume the subsidized gas at a rate of 70 AED a month; a single resident up to 40 AED. Anyone exceeding the quota will have to buy their next cylinder at non-subsidized rates. Gas can be bought as: • 3 types generally. 25 lbs, 50 lbs and 100 lbs. The Government
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• • • •
has put a ban on the 100 lbs cylinders recently though. 25 lbs (11.3kg) – 20 AED (Subsidized), 58 AED (Unsubsidized) Cylinder cost – 225 AED 50 lbs (22.6kg) – 30 AED (Subsidized), 116 AED (Unsubsidized) Cylinder cost – 300 AED
It cost between 5 AED to 10 AED extra, depending upon the location, if the customers want home delivery. It is between 120 AED and 125 AED for a mediumsize cylinder in Dubai which is 5 to 6 times that of cost in Abu Dhabi. Generally, customers bring in their empty cylinders and exchange them with filled cylinders at filling stations. Is the ruling government supportive of LPG? Have they always been supportive? The government is very responsible and supportive and have always been that way. The government is responsible for implementing policies that have driven growth. They are also
INTERVIEW responsible for developing strict statutory requirements for storage, distribution and sale of LPG in the UAE. This has given structure and form to the industry priming it for growth. The government also only issues trade licenses to private companies that are required to satisfy various standards set by the government. A key thing that I feel that greatly benefits the industry here that they do, is that they run have several campaigns for public awareness towards the transport, handling and use of cylinders and regulators keeping the public well informed and knowledgeable on the use of LPG. What are some of the major barriers to further LPG development in UAE? I find it difficult to say that there are any real barriers here in the UAE. The only barrier that I could stretch to say it is one, is that customers constantly request for an increase in quota for subsidized gas. So, the customers do desire more LPG and are normally using more than their fixed quota. There are reasons for this however but aside from this, I can’t say that there are other barriers for growth. There is just a continuously increasing demand for the product as it is required by all industries and households. TECHNICAL OPERATION OF AN LPG PLANT What does a regular day at the LPG plant look like for you? What is your daily routine like and what is the most important part of your day? I normally get to work at 15 minutes before time so I can change into my normal work attire, which is my Personal Protection Equipment or PPE as we call it. Once my gear is on I go straight to plant so I can check the activities in the plant. I start
by checking the documents of the previous days filling activities and then make my assessment before signing off. After this, I then proceed to the conference room for our regular daily meeting. The daily meetings take about 2 – 3 hours, so they normally go from about 8 am – 11 am. After that, I go to my office and do some routine admin work such as bottling transactions and other paperwork. After this I’m basically in the plant for the rest of the day until my shift ends. If my shift is 7 hours, roughly 4 - 5 hours are in the plant. I’m more in the plant than I am in the office. My work is more so in the field (the plant) and not in the office. I’m only really in the office to just go do some finishing touches for some documents. My most important part of my day is definitely to oversee operators doing the filling and making sure that everything is running smoothly and operating well in the plant which typically is an on-going task throughout the entire day. Where does the filling plant get its LPG from and where do the filled cylinders go?
We get our gas straight from the Ruwais refinery. The gas is conveyed through a gas pipeline all the way from Ruwais to Abu Dhabi. Once reaching Abu Dhabi, the gas is filled into bullet tanks and from the bullet tank it is transferred to the filling plant. The gas is then used to fill the cylinders. After being filled, the cylinders are transported to private distributors and end users. How frequent does machinery and equipment breakdown or need require maintenance? We rarely experience any breakdowns because we set aside a various times during the day to do maintenance and we have full scale maintenance on Fridays where the plant is shut down and there is no production. On Fridays, our maintenance departments check the machines for any possible problems. Which equipment requires the most maintenance/ repair and which requires the least? We have many different machines and they are subdivided into categories:
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INTERVIEW do this is to have strict supervision of operators and of the machines. It is also very important to manage the staff well and ensure that employees have enough time to rest while at the same time giving employees monetary incentives for good work.
• Handling and Transportation Systems: Palletizing unit, Cylinder handling unit, Carousel introduction and ejection unit • Filling Equipment: Carousel filling system, In-line filling system, Container filling systems, Compact filling system, Universal filling machines Filling heads • Checking equipment : Check weighing system, Manual leak detector, Electronic leak detector, Valve tester, Leak testing baths, Weight correcting machine • Preparation equipment: Evacuation unit, Valve orientation machine, Valve opener and closer • Finishing Equipment: LPG piping system tank yard equipment, Fire water system, Electrical Installations and Data • Network: power and data network, Production data management system, Electrical equipment, Fire and gas alarm system • Reconditioning Equipment: Shroud and foot ring tester, Pressure testing machine, Purging machine, Valve changing machine All plant equipment requires maintenance. There are different sizes of equipment, so some machines require weekly and
monthly maintenance and some require also yearly maintenance. We have a separate maintenance team that oversees maintaining all the equipment. I would say that in my opinion our maintenance team is one of the best in the world. I would also like to mention that we have 2 plants, so that in event that there is any problem, we can shut down one plant and switch to the other plant immediately. The plants are about 5 minutes’ drive apart so it is easy for personnel to move from one plant to the other should this ever be the case. What method do you use to ensure quality and consistency of filled cylinders? We are currently using a Kosan Crisplant designed setup such that everything is automated. If a cylinder is not filled properly, there is an ejection machine that pushes the cylinder out so we know it is not filled properly. These ejected cylinders are then put on the weight correcting machine and an alternate filling machine that fills these cylinders to the brim before they are dispatched. All cylinders are made sure to be filled properly in this way. What are some methods that you use to ensure maximum productivity during operations at the filling plant? For me, I feel that the best way to
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THOUGHTS ON AFRICA In your opinion, what do you feel African LPG markets can learn from the UAE? To me, I feel that the major things are the storing, distribution and selling process. Basically, every aspect of the industry here can teach them something there. Most importantly though, the African market can definitely take examples on the safety practices here in Abu Dhabi. In Africa, what is missing is the safety orientation, I’ve seen people smoking beside the LPG cylinders, right next to the pictogram that says, ‘No Smoking’ on the cylinder. They just need to be orientated and educated. In many countries in Africa, you see so many accidents because of gas explosions and this is caused by the people using the cylinders. In the UAE, we have little to no accidents here because there is so much awareness and understanding of the use of the cylinders. What should be on their minds, (to learn from us) is that the government should first organize public awareness programs for LPG end users. This is so that they can know the importance of the use of LPG and secondly, so that they can know how to best use it safely. LPG is important but it can also be dangerous if not handled properly. The programs will teach the public so they know both the usefulness and also the best way to handle LPG safely. [LPG BUSINESS REVIEW]
Conference & Exhibition LISBON CONGRESS CENTER
CHANGING THE FACE OF THE LPG INDUSTRY: WOMEN IN LPG GLOBAL NETWORK (WINLPG) A global network from the World LPG Association (WLPGA) INTERVIEW WITH ALISON ABBOTT WLPGA, Communications Director
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Tell us about your journey
towards and within the LPG industry and how you’ve come to be where you are today. I started working in the LPG industry at the end of 2010 and the Madrid World Forum was my first major event. I have a background in international marketing and communications and have held similar roles in the software and telecommunications industries. What immediately struck me about the LPG community is that whilst we are a relatively small LPG world, it is a dynamic and fascinating industry to be part of, and there are indeed opportunities for women
to advance. Working at the World LPG Association we are privileged to work within our industry on a very global basis and have the chance to travel widely to witness at first hand the impact that LPG can have, whether in the developing or developed world. How did this network come about and how are you involved? According to Energia, an NGO focusing on women’s issues in the energy industry, most LPG consumers are women. Many women make and manage the purchasing decision and it is largely
women who are using the product. However, within the industry itself there are few women, not only at executive level, but at all levels. WLPGA identified that there is a clear opportunity for the global LPG industry to take medium and long term actions that can address the issue of attracting, retaining and developing women, and young talent in general, in the LPG industry. As the authoritative voice for the global LPG industry, we feel WLPGA is uniquely positioned to develop and implement these actions. WLPGA launched the network, Women in LPG Global Network (WINLPG) during the 2015 World LPG Forum in Singapore. The network’s mission is to support and help empower women in the worldwide LPG Industry by leadership, coaching, mentoring and promoting role models. WINLPG aims to bring women, and men, together across all business sectors, ages and levels to discuss and support the development of diversity within the LPG Industry. Alison Abbott, WLPGA Communications Director, was asked to set up and manage the network and WINLPG is chaired by Nikki Brown who has carved a very successful career in the LPG industry in the UK. What does it mean for you personally, to see the development and success of WINLPG? I was asked to look into the feasibility of setting up a network for women by our Industry Council a couple of years ago. Working with our Chair Nikki Brown, we spent a few months looking at other industries (nuclear, wind, coal, natural gas etc) and discovered that they all have existing and successful networks, so LPG was a little behind the game here. We then launched WINLPG in September 2015 so
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after just one year it is extremely gratifying to have been part of the growth of the network itself, to have met many amazing women at some of the events we have organised to date, and also of course to have witnessed the launch of the first to national chapters. Nikki and I are very proud of this and are exciting about the future for our network. What Are the Goals of WINLPG? WINLPG has three pillars of objective. First of all to support and retain women already in the industry via a network through which women can further their professional development and access colleagues and mentors. Secondly,
to promote role models and case studies via media and at industry events and, thirdly in the longer term, to work with universities to educate and attract women, and young people, to the industry. WINLPG has a long term goal of increasing the number of women in middle management to 40% and at Board level by 30% by 2030.
challenges and exchange their own stories. WINLPG has also developed a library of role model profiles, examples of successful women in the industry from around the world and continues to add to this suite of interviews. They are all available on the WINLPG section of the WLPGA website (www.wlpga.org).
What did WINLPG achieved in its first year? As the network is still in relative infancy, the priority for the first year was to raise awareness of the network and encourage WLPGA members to become engaged. WINLPG will hold three network meetings each year to coincide with the WLPGA Matrix Day and Industry Council meetings, the third and final meeting to be held at the time of the World LPG Forum. These network meetings will address the strategy of the network. WINLPG also launched half day Knowledge Exchange Workshops and hosted the first such event in Bogota, Colombia in March 2015 and the second in New Delhi in January this year. These workshops unite women, and men, of all levels in the industry and give them a unique opportunity to network, discuss leadership skills learning,
What were the highlights of this first year? Without doubt two of the main highlights were the creation of national chapters in South Africa and Nigeria. Development of national chapters enables the network to grow on a much wider scale by engaging with women who may not normally be able to attend other meetings. They also enable specific regional issues to be addressed. National chapters are autonomous in that they can decide how often to meet and how to communicate, however, they adhere to a Terms of Reference and agree to support the objectives of the network. National Chapters are run by a Chapter Head who reports regularly to the Coordinator and Chair. The first national chapter was launched in October 2016 in South Africa. They held their inaugural
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event on 28 September 2016. Hosted by the Liquefied Petroleum Gas Safety Association of Southern Africa (LPGSASA) and sponsored by Oryx Energies, the event saw representation from the Department of Energy, LPG industry players and suppliers, as well as the City of Johannesburg Emergency Management Services. The South African chapter is managed by Tamsin Rankin, Managing Director of Vision In Energy, a WLPGA member, and the next South African WINLPG event will take place in May. The full morning was opened by a keynote from Sandra Tererai, HSSEQ manager of Oryx Energies who addressed the importance of fostering the growth of women in STEM subjects and also saw a series of presentations which covered issues such as a refresher on the basics of LPG and critical LPG installation basics, and also a session on the importance of a professional image for women in the workplace. Still in Africa, the second national chapter was launched in
Nigeria in November. Headed by Nkechi Obi Managing Director of TechnoOil the launch event in Lagos was a huge success and these two national groups look set to have a positive impact on the LPG industry in these countries. The afternoon session was a major part of the Nigerian LPG Association’s annual congress and included a round table discussion about the important of developing women in industry in Nigeria and also showcased examples of women in the industry. The keynote was given by Nigerian actress Omotola Ekeinde who has been given the role of LPG Ambassador to Nigeria and who gave her full support to the WINLPG chapter. What are the key goals for 2017? WINLPG has gained an enormous amount of momentum with overwhelming support from the industry. The goal now is to maintain – and increase – this momentum. In the medium term membership will be developed and
the LinkedIn exchange platform will be enhanced to actually get the network ‘networking’. There will be more role model interviews and case studies of companies who have successful programmes in place. One of the key objectives for this year is to launch a third national chapter. There was a great deal of appetite for this to be done in India and significant support of the industry there and this is planned for later this year. A further Knowledge Exchange workshop is planned for the UK in May to coincide with the UKLPG Conference and of course the two existing national chapters will continue their outreach. How do people get involved? We welcome anyone who is involved in the LPG industry, both men and women. If anyone is interested in joining WINLPG please contact Alison Abbott (email@example.com). Follow us on Twitter @WINLPG. [LPG BUSINESS REVIEW]
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THE DIRE IMPORTANCE OF GOOD INDUSTRY PRACTICES FOR LPG: A Look at WLPGAâ€™s Guidelines APR 2017 | LPG BUSINESS REVIEW | 23
FEATURE There are often sacrifices
made to essential practices in the LPG industry to either save costs or time. The fact of the matter is, that these sacrifices donâ€™t do either and have a severe detrimental impact to the industry as a whole. These sacrifices have far reaching implications that degrade the industry and have a culminating effect on those who rely on the regular supply of LPG for of their daily lives. To ensure the continued, efficient and successful growth and development of any industry, it is incumbent on the community to ensure that good
industry practices are carried out by every stakeholder and at every part of the value chain. The backbone of any industry is the people that it is made up of. The people behind the industry need to understand that the quality of the business process is what drives the business to greater heights. The gears that move the industry in new areas (especially in Africa) rely on educating a public that is only just beginning to understand its benefits. If these gears are poorly oiled and sloppily maintained, it only spells disaster for growth. This is
Extremely Unsafe Illegal Filling Operation
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especially pertinent in an industry where safety is a huge factor. Accidents are the bane of the LPG industry and it is solely due to poor business practices that these accidents occur. Good Industry Practices are an extremely important part of the LPG industry and the WLPGA has been a core component in the establishment and development of good industry practices for the LPG industry for almost 20 years now. They have successfully come up with a full set of official guidelines for the industry which cover numerous areas from
FEATURE cylinder management to bulk installations. The WLPGA’s Guidelines for Good Business Practices in the LPG Industry has dissected each part part of the value chain, looking at the result of sacrificing essential business practices and then looking at preventive measures or good business practices that can stop these events from occurring. The Guidelines have been a core component of the Associations mission goals and they have translated the document into several languages since its first publishing in 2001. The document has been endorsed by the International Chamber of Commerce (ICC). The Guideline’s sister publication, Guidelines for Good Safety Practices in the LPG Industry has been endorsed by the United Nations Environment Programme (UNEP). Let’s go through some of the key areas that have been outlined in their document, looking at the results of bad practices and what can be done to prevent them from occurring. Storage Facilities As storage facilities are normally one of the largest expenditures in the value chain which should be managed and built with the best business practices in mind as problems here can lead to huge additional costs in the long run. Badly designed and constructed facilities results in... • Greater operational risks • Unfair competition as a result of lower capital outlay • Higher maintenance and upgrading costs • Construction delays and marketing plans not being met • Reduced asset life
• Increased risk of downtime and delays in delivering the customer proposition • Increased risk to the customer and the general public • Increased liability exposure and increased monitoring by relevant authorities and can be prevented by... • Promoting proper industry standards • Adoption of adequate industry design standards and codes of practice • Use of proper materials and good project management techniques • Use of qualified contractors throughout the design, installation and commission stages • Designing for Propane rated vessels Proper Training of Staff Staff training has been identified by many professionals in the area as being one of the, if not the most important part of the LPG business. Operator errors can lead to huge catastrophes and possible catastrophes can also be avoided by having great operators. Inadequate training of staff results in... • A high-risk environment • Operational errors • Risk to assets • Lowly motivated staff • Higher staff turnover • Possible litigation and can be prevented by... • A thorough understanding of staff skills and job requirements • Regular on-going training programmes including... • On the job training • Assessment and re-
assessment of the competence of critical staff Proper Product Specification and Quality Control Product quality control is another key point that requires monitoring. A poor product can result in unpredictable behavior during handling which greatly reduces the safety of all operators on site as well as increases risk for damage to equipment. Poor product quality control results in... • Off-specification or unusable stock • The customer proposition not being met • Customer complaints and possible litigation • Clean up costs • Risk of stock out • Risk to Assets and can be prevented by... • Adopting fit- for- purpose product specifications • Regular checking of product specification • Proper and clear procedures • Regular housekeeping Good Housekeeping and Maintenance Ensuring that facilities are kept clean and well maintained is crucial to safe and smooth operations. Making sure that equipment has been inspected greatly reduces the chance of accidents and unplanned shutdowns as well as extending the life of the equipment saving a company thousands of dollars. Inadequate housekeeping and maintenance results in... • Untidy facilities • Increased risk of fire, accident,
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This is a poorly designed customer installation that doesn’t have any protection from vehicles in the vicinity. There is also no ladder for the delivery driver to connect the hose to the top fill connection putting him art personal risk.
incident or obstruction • Damage to the company image and brand and can be prevented by... • Programmed maintenance • Clearly stated procedures • Regular audits and inspections • Incentives • Assessment of critical assets Filling Plants Practices in fillings plants are the final leg before reaching the retailer and consumer. Efficiency in this part of the chain determines
how much of LPG gets distributed and how quickly product can reach end users. This area of the value chain directly determines the safety of the end user as it is the point where all safety issues need to be resolved before passing the gas on to the public. Bad filing plant operation and design results in... • Operational problems and reduced safety levels • Increased operating expenses that are ultimately passed on to customers • Dissatisfied customers and
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employees • Damage to cylinders • Operational errors and reduced levels of safety for employees and the general public and can be prevented by... • Planning for the future, training of personnel • Using temporary facilities initially or... • Contracting out cylinder-filling process • An integrated approach to design • Liaising with local authorities
Steel cylinder that was not protected against corrosion
Steel cylinder that has been overfilled at the filling plant and left in the sun resulting in expansion of the cylinder structure
Bulk Loading Bulk loading is another very important area that can be huge area for incidence if good practices are not applied. It is important make sure that no short cuts or profit gaining methods are made when bulk loading LPG into tankers. Overloading can result in structural damage to the tank and can make spillage through pressure relief valves a very real hazard.
Illegal filling (decanting) of cylinders Illegal refilling is probably one of the most devastating aspects affecting the sustainable growth of LPG in Africa. It is killing the business for retailers and marketers by snuffing out their business providing consumers with a cheap and dangerous alternative.
Incorrect loading and inaccurate metering results in... • Overloading and damage to plant and vehicle • Dissatisfied customers • Possible regulatory violations • Unscheduled product releases and reduced safety to the operator
and can be prevented by... • Clear operating procedures • Well trained staff • Regular audits and monitoring • Accurate scheduling
• • • • •
Illegal filling results in... No control over cylinder condition No control over the quality or quantity of product Serious risk of damage and injury from leaking cylinders Injury and damage compensation claims difficult to process Inequitable and illegal competition Industry reputation being threatened Assets being degraded
and can be prevented by... • Designs that make it difficult
to illegal fill (e.g. self sealing valves/security seals) • Alerting authorities and take action to eliminate practice • Customer awareness programmes - highlighting risks & consequences • Keeping a close control of the distribution chain; monitoring and auditing The document is far more detailed and specific, covering many more areas of the value chain. The full document can be downloaded from the WLPGA website here - http://www. wlpga.org/publication/ guidelines-for-good-businesspractices-in-the-lpg-industry/ Special Thanks to David Tyler, Project and Business Practices Director of the WLPGA. He has been one of the key people leading the WLPGA’s works in the development of the ‘Guidelines for Good Industry Practices in the LPG Industry’. Having worked on the guidelines as a consultant several years prior to joining the WLPGA, he has continued to work on and improve them since he joined in 2009.
[LPG BUSINESS REVIEW]
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FEATURE LPG CONSUMPTION IN KENYA - IS THERE A CASE FOR SUBSIDY?
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FEATURE The annual LPG consumption
in Kenya stood at 148,800 MT according the report published by PIEA in the third quarter of 2016. Even more promising is the fact that LPG consumption has increased about 59% between 2003 and 2016 according to reports available in the Petroleum Industry subsector in Kenya. Despite this rapid growth, LPG Consumption in Kenya still compares poorly with
world statistics at 95.5Ktoe against a world average of 1434Ktoe and 384Ktoe in low income economies (Ministry of energy report-MOE). This consumption has however been rising at a steady pace. At an average growth of 14% annually (PIEA 2016) it is projected that the country will have 70% LPG penetration by the year 2030. However, this growth has mainly been concentrated in urban and
peri-urban areas of Kenya. In other countries in Africa, LPG adoption and usage has been gaining ground at a much faster pace compared to Kenya. In Senegal for instance, 86% of the population uses LPG as their main source of energy. The consumption is equally high in Botswana at 71%. Kenya has a dismal 23.4% urban LPG consumption and a much lower figure of only 1.8% in rural areas. (Dalberg report of 2013). It is against this background that the government of Kenya made an announcement to start an LPG subsidy program that targeted the low-income population especially in rural Kenya in October 2016. The total subsidy was reported to be upwards of 50% of cost on both accessories and the gas. This begs the question of whether there is a strong case to go the route of subsidy or simply sit back and allow market forces to regulate the market without the governmentâ€™s long arm influencing the price. It is worth noting that countries with high LPG consumption especially in rural areas like Senegal and Ghana have benefited from strong policy intervention by the government including direct subsidy. Others like South Africa have passed strong legislation that promote an environment that eases access and distribution. Such policy frameworks as capping prices of LPG and enforcing unified valves on cylinders to promote usage has been an integral part to promote faster adaptation and acceptance of LPG in rural economies. It is therefore fair to say that the hand of the government, at least at the legislative and policy level, have guided the market for better results. The global focus on LPG is largely underpinned by the fact that LPG is the most efficient source of energy after electricity. Kenya signed the KYOTO protocol of 2010, which among other areas sought to promote modern energy usage to reduce
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pollution and more importantly, save the environment and promote health benefits. The use of biomass as the main energy in the Kenyan economy especially in the rural setting is over 80% on average. This unsustainable practice is a major health risk to the population and should be reversed immediately. Kenya’s LPG per-capita consumption lags behind countries in Africa at 3.65 Kg in rural and 9.87 in urban areas compared to Senegal which is at 75Kg according to MOE reports. Even with an annual growth of 14% of LPG
consumption, a lot more needs to be done to catch up with the rest of the word in promoting LPG. These statistics could change with the coming in of the government subsidy planned for later this year in Kenya. A strong case for Subsidy to promote LPG usage in rural Kenya The energy sector contributes 20% of tax revenue and makes up 4% of the GDP according to Kenyan budget estimates of 2016. It is therefore urgent and important that such a crucial
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sector is supported fully to realize its potential especially in the rural areas. LPG development as a source of energy is a major part of this initiative. The annual demand for energy in Kenya is rising. Last year for instance, it was estimated that the country’s annual energy demand grew about 15%. This requires diversified energy sources to support a growing economy and ensure sustainability. It is estimated that over 97 percent of Kenya’s nine million households rely on traditional sources of cooking energy (Dalberg, 2013). It is important to note that many households practice energy stacking, supplementing modern energy such as LPG with alternative sources of fuel such as wood, charcoal and kerosene. A deliberate effort has to be made to guide a household’s hands to choose more efficient, more economical energy sources, LPG therefore should be at the forefront of this energy ladder. In Kenya, and especially to the majority of the rural households living on less than a dollar a day, the initial cost of cylinder and accessories at an average of 400 dollars is unaffordable. It is not only expensive for the people at the bottom of the pyramid, it is unreachable competing with food and shelter at that basic level. The gap is a yawning chasm and households would rather choose food over efficient fuel. This is the gap that the government perhaps hopes to bridge to aid in the upfront purchase of the cylinder, gas and accessories, through subsidy. Once their appetite is whetted and economic and health benefits are explained, the populace can make informed choices progressing into the future. Two years ago Kenya had only 34 LPG marketing companies covering a landmass of 581,309 square kilometers. This has changed dramatically with new entrants over the last year and now
FEATURE Kenya has over 70 LPG marketing companies. These companies are nonetheless concentrated in the urban areas where the market is fully developed, the distribution infrastructure smooth and the attendant risk of LPG marketing low. What I mean by this is that, in the urban markets the distribution infrastructure already exists and therefore most marketers move in almost assured of making profits as the risk of failure are minimal. With a proper marketing plan, they are assured of good returns on their investments. In the rural setting on the other hand, there are many unknowns, the risk is high and few companies dare to risk as the returns are shaky. The profits on the LPG business in these urban settings are by any standards high and therefore attract many players. This has enabled urban folks access to LPG conveniently, it is therefore no wonder the consumption growth has been high. In the rural areas on the other hand, people are left to their own devices as far as LPG is concerned. The market is untapped, and underdeveloped. Distribution costs are prohibitively high. A well-structured subsidy can develop a rural distribution system that ensures ease of access. This can speed up the adaptation rate of non-users to users, awaken latent demand and create a platform for fair prices that the rural population may find affordable in subsequent refills once they have the hardware.
In the long run the market will in time develop and attract companies that go into developed markets purely for profits. Current market imperfection shall even-out and pockets which currently seem worthless will turn profitable in time. In part, low LPG usage has been blamed on low awareness of LPG safety and user education. In the past, accidents involving use of LPG have made the population skeptical on how safe this source of energy is. The government as a matter of necessity would have to roll out a comprehensive LPG correct usage guide and run a safety awareness campaign that would allay any fears around the use of LPG. The education should mainly target the rural population where literacy is still relatively low and fear of adoption based on perception and absence of hard facts is prevalent. Such an activity that borders on CSR (corporate social responsibility) is perhaps better undertaken by the government in my opinion. In the long-term when the market is informed and developed, and facts become readily available that aid consumers to make accurate decision about LPG, all the players in the market are likely to benefit. In any event, the subsidy program should take a multi sectorial approach involving the private sector in the supply chain and the non-governmental players and other agencies to promote
usage including the world LPG organizations. In this way the project has a high chance of success. The ownership of the local community through women groups, and youth groups that are widespread at the bottom of the pyramid, especially in the rural communities should be involved at the research, planning, evaluation and implementation level. The local administration and other networks have a stake in this too. This has proven success of such similar initiatives in other parts of Africa where the government has employed subsidy with remarkable success like in the Senegal case. Last but not least, strong policy and legislative components should be inculcated in the subsidy plan. It is envisaged that the government will support this subsidy plan with policy framework that will ensure sustainability once the consumers are enrolled into the program and start usage. Furthermore, there should be a plan to have an elaborate infrastructure development of the Kenyan LPG Cylinder Exchange Pool in the far-flung areas that ensure that consumers can refill or exchange old cylinders with filled cylinders for sustainability. Any program of this nature succeeds well if the users are assured of where they shall refill and even get replacement of the accessories when required. [LPG BUSINESS REVIEW]
CHRINUS OTIENO Chrinus Otieno Is a Kenyan citizen, 48 years of age. He lives and works in Nairobi. He holds a Masterâ€™s degree in Business Administration. Chrinus is a professional marketer and an authority on downstream Oil and Gas matters. Oliver Kinross Events retains him as a keynote speaker in Oil and Gas summits across the world. His wealth of experience is gained over 25 years working in companies such as Total Kenya, Engen and National Oil to name a few. As a writer, he has published several articles with The East African Newspaper. As an author he has two books to his name- Rings of Grass and The fall of a Hunter.
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HOW TO START A COOKING GAS BUSINESS IN NIGERIA? BY UWANDU IFEANYI
Founder/CEO at Kiakia Gas Ltd.
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ADVERTORIAL The consumption of cooking
gas in Nigeria has grown from 110,000MT per annum in 2013 to 400,000MT in 2016. What is the implication of this for the Nigerian entrepreneur? It shows simply, that without a doubt that the cooking gas business in Nigeria is a risk worth delving into in Nigeria. Nigeria is well-known as one of the big oil producing countries in the world. It has also been known to derive a larger percentage of its revenue from oil. Globally, petroleum products are also thought of as an aspect of the economy that you can never go wrong with. But among all the petroleum products, gas seems to be the least thought of in this way. As a matter of fact, statistics conducted some years ago showed that only about about 5% consumption of the potential of LPG was used in the world. But presently, we are seeing changes in the consumption of cooking gas. More people are seeing the usefulness and convenience of LPG. One of the menaces of the Nigerian society is lack of electricity and although, most people would prefer to rely on electricity in their kitchens, that preference is not realistic in Nigeria. A lot of these people therefore substitute their energy use in their kitchens with kerosene. When they discover cooking gas however, which is arguably a better alternative to kerosene, they find out not only does it cook food faster, but it is also ultimately cheaper. What the above premise is driving at, is that the search for a business to go into in the country is over. If you are an investor or just a person who wants to go into business, the cooking gas business is the one for you. Even in this period of recession when businesses are closing in Nigeria, petroleum products donâ€™t run at a loss, much less, the fuel used for cooking. As bad as the economy is, people are still going to eat and they would
need to buy fuel to cook their food. However, there are several things that would have to be put into consideration before you can start a cooking gas business in Nigeria. Get an LPG Business Intelligence Report: Knowledge is universal and is not restricted to any particular area. If you want to succeed in any endeavour, you are in need of knowledge. As a matter of fact, it is advisable that you get knowledge before delving into the business. You should plan before embarking on it in the first place, knowing the amount of gas plants
in the area you want to set up, their average turn-around time, etc so it will not be a case of a man testing the depth of a river with both feet. Knowledge will give you insight into the dos and donâ€™ts of the business as you would be learning from the experience of people before you. And apart from that, knowledge will help you know if you are ready and fully equipped for the gas business. Land: Apart from the fact that you need a space for your business, in the case of cooking gas, the aspect of land is even more crucial simply because of the environmental and health implications of cooking
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ADVERTORIAL Licensing and Permits: This is the stage peculiar to the Nigerian situation as the requirements are based on what has been stipulated by the DPR. The following information would also help in setting up a cooking gas business. The approval is done in the third phase, you will be required to have the following permits per phase: Stage One: Site Suitability Report: This is the first stage, DPR will visit the site to inform you if it is appropriate to be used to set-up a filling plant Required Documents: • Certificate of Ownership (C/O) of the property or any proof of ownership • An application letter for DPR suitability inspection (to be addressed to the comptroller of DPR in the state you want to set-up the plant) • Survey Plan of the Land • Company certificate of incorporation and Memorandum of Association • Tax Clearance certificate • Location Map of the Land (1km adjoing the property to be used)
gas. Therefore, in accordance to the requirement of the DPR (Department of Petroleum Resources), the position of the plant must be at least 15 meters from any building containing flammable materials; residential buildings or filling sheds for example. The reason for this is because before you are granted a license (which we would be addressing), the DPR would come for inspection and they would need to see this is place before your application can be approved. Capital and Labour: There is not a single business that exists for which you don’t need capital and you would need a lot of it for
starting cooking gas business, to be candid. This is because you would need to buy all the equipment and these are also some of the things the DPR would look out for prior to granting you a license. Apart from the DPR needing to see this, you cannot really function without this equipment. It would be like a doctor without a stethoscope. Some of the equipment necessary includes; the testing pool, valve screwing equipment, an electronic carousel, a mechanical carousel, electronic scales and mechanical scales among others. In the same way, you would need to employ several capable hands who would help you operate this equipment and run the business.
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Stage Two: Approval to construct: After the DPR has given you approval to move forward with the plant, you will need to prepare and submit the following documents Required Documents: • Police Report • Town Planning Permit • Fire Planning Approval • State Land and Physical Planning Permit • Layout drawing of the proposed plant • Carry Out an Environmental Impact Analysis Stage Three: Approval to operate: After the Plant has been set-up, the final stage is to certify the installation and materials used to build the facility.
Required Documents: • Pressure Test Report • Fire Response Report • SON certification for the pressured vessels Insurance: Insurance is not indigenous to Nigeria and so, many Nigerians do not see the use. Now, this isn’t compulsory but you need to see the need to insure your business, mainly because you are dealing with flammables. Other businesses might take the risk of not insuring their business but you cannot afford to take that risk. Although, gas plants rarely blow up as far as you are keeping all your safety measures but we cannot be too careful. Sometimes, to be realistic, things beyond our control occur. If moments like that arise, you would not run at a loss if you were insured. You should research to find insurance that is most suitable for your business. Marketing: Most of the time, players in the petroleum products space are known to not take
marketing seriously, especially when it has to do with small businesses. But, we must come to the realization that if you do not create awareness, there is a likelihood that people will not know about it. There are a lot of people that will naturally need whatever you are selling but when they have no idea that you are selling it, then your opening a business will most likely be an exercise in futility. If you want your business to be known, you must make a conscious effort to make it known. However, it is important to note at this juncture, that there is a difference between doing something and doing it well. You have to master the art of marketing and advertising. If you can afford it, you can work with Kiakiagas Media team and if you can’t, just be creative about what would work in that locality. Similarly, it would do you a world of good to get training. There are a lot of intricacies and secret strategies of the business that would be somewhat esoteric and you would not be privy to if you do not
get into the system. Ever wondered why most people who own a TV or radio stations today were formerly broadcasters or presenters before? In the same vein, try to work with someone in the business so as to acquaint yourself with all you would need to work out your own business. Be wise: After all is said and done, you have two choices, read this article, decide you want to go into cooking gas business and completely ignore all you have read here OR decide to go into the business and take into consideration all you have learned about from this article. Wisdom is usually defined as the application of knowledge. Having the information would not help you if you don’t apply the information you have learnt. Therefore, if you decide to go into cooking gas business and you want to be successful at it, be sure to put all the above into practice. If you need further explanations, call 08085269328 or write us at firstname.lastname@example.org
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FGE CONFIDENTIAL Market Feature— The Increasing Chinese Effect East
“China continued to be the main explanation behind the LPG import growth in Asia in 2016.” We presently possess full LPG import data of 2016 for
the eight principal LPG importing nations in Asia. The table beneath demonstrates these numbers as compared to those in 2015. The import growth, as this table shows, is 60% due to China. Import growth was also seen in other countries, except for Japan and Thailand. The LPG demand continued to decline naturally in Japan. Auto-gas demand for LPG had also declined in Thailand, which as a result has put them at No. 8 on the Asian import list. Vietnam leapfrogged them, bagging 1.2 million tons in 2016. India. India showed an ascending LPG import trend in 4Q 2016. This ascending trend persisted although the Government had suddenly voided 86% of its currency in this cash-based society in early November. We should keep in mind that LPG demand in India has been kept strong regardless of the cash ban due to the following factors: • the biggest LPG demand in India has been the retail sector which is not that susceptible to price signals • the Government still reimburses the subsidies directly back to the consumers’ accounts • and there is no other alternative to cooking other than turning back to using biomass and charcoal. The cash ban initially did have a detrimental shock on demand for transport fuels like motor gasoline and gasoil. But demand for these fuels is now coming back. Where Are These LPG Supplies Coming From? The Middle East remains the main source of LPG for this region. But, as everyone knows, the arbitrage trade from the West has been growing. Interestingly, the US cargoes have been concentrated on three countries mainly—Japan, Korea and China. On these numbers US cargoes accounted for: • 30% of all LPG cargoes into Japan; • 45% of all LPG cargoes into Korea; • and 20% of all LPG cargoes into China. Meanwhile the arbitrage cargoes East from Africa
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LPG Imports East
US: LPG Trade to Asia million tons
have dropped—from 2.6 million tons in 2015 to 1.6 million tons in 2016—because of the supply disruptions in West Africa.
Market Feature— Butane: Short or Long?
“Recent changes in market conditions in Asia have led to a sharp decline in butane premiums over propane.” Throughout 1Q 2017 butane was short
in Asia. This was reflected in the high prices for butane and the difficulty in securing butane or even 50/50 propane/butane cargoes on the market. Reduced export supply from the traditional Middle East producers such as Saudi Arabia and Qatar was a factor. So was rising demand from importers like India and Indonesia. As a consequence Saudi Arabia set a very high $120/ton premium for butane over propane in its March CP. What a difference a month makes. The Saudi premium for butane was reduced to $60/ton in the April CP. And the spot CFR premium for butane over propane in Asia has fallen closer to the $40/ton level for May delivery. Seasonal factors may have accounted for some of this change. But other things have been going on in the two major markets, China and India. Butane in China Chinese buyers reacted to the widening spread between butane and propane prices by stopping their purchases of butane. Those who attended the Chengdu LPG conference in mid-March heard buyers saying that they would do this. Buyers for the retail market have a considerable degree of flexibility in the proportion of propane and butane that they take. With the high butane prices in March, they cut their butane purchases to the bare minimum.
Butane in India Indian buyers have had a different problem. Their limited storage relative to the size of the domestic market means that they have to buy more in the international market when they are even a little bit short. When they are a little bit long, they have to resell cargoes.
“Indian buyers have turned into resellers of cargoes.” The former was the case in 1Q 2017. The latter looks to be the case in 2Q 2017. Why the change? Institutional factors. The ending of the Indian fiscal year in March may have been a factor. Consumers who had not used up their entitlement of twelve subsidized cylinders by the end of the fiscal year at March 31 rushed to buy. Now they have stopped. The Reliance factor. There has also been more domestic butane put in the retail market. When Reliance started receiving seaborne US ethane at their crackers in January, they backed out Reliance refinery butane. The backedout butane then appeared in the Indian retail market. Outlook. As a result of these developments, Indian buyers have been looking to resell some of their April and May cargoes. Still, this length in the Indian market may not last that long.
“Chinese buyers for the retail market have been price- sensitive to the butane premium.”
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India’s Subsidized LPG Market “Indian LPG demand and import growth will continue because natural gas is not likely to make any significant inroad into the huge domestic retail market.” India’s LPG imports have been running at record heights since last October, around a million tons per month. After what looks like a slowdown coming in 2Q 2017, they are likely to rise over the balance of the year. The reason is subsidized LPG prices and the present Government’s drive to extend LPG usage to rural areas. To help balance their books: • Since March 2015 the Government asked welloff middle-class households to voluntarily forgo subsidized LPG cylinders. More than ten million households are said to have done so. • Since January 2016 the Government stopped subsidizing LPG to the eight million customers with annual income of $15,000 and above. Indian LPG demand and import growth will continue because natural gas is not likely to make any significant inroad into the huge domestic retail market. Piped gas may be a factor in some new housing development. But not much for the huge stock of existing housing in most urban areas.
Qatar’s Gas, Iran’s Gas
“Qatar has lifted its gas moratorium. We may see new LPG production as a result.” In Qatar the offshore field is called
North Field, in Iran South Pars. Both are in fact part of a giant gas field that straddles Qatar and Iran. Both countries share in the gas reserves. But one side can take more of these common reserves if they develop their projects faster and on a larger scale. Initially this was Qatar with their LNG, GTL and other gas projects. But Qatar declared a gas moratorium on new projects in 2005. Existing
projects continued, although the last one, the Barzan gas project, has not really taken off. So Iran could catch up. The impact of sanctions, the withdrawal of foreign partners, and the delays in completing projects have frustrated their ambitions. Lifting of the Gas Moratorium Now Qatar is reported to have lifted its gas moratorium. A new 2 bcf/
day gas project from the southern section of the North Field is being contemplated. If this happens—and it could take five-to-seven years to materialize—Qatar would then command more of the combined gas field reserves again. Iran has reacted angrily by saying that it would ramp up its own South Pars development plans in order to prevent Qatar taking this larger share. We could see in the 2020’s a race between Qatar and Iran to complete more and more gas projects. As the gas contains much LPG, we could also see sizeable new LPG production for export from both Qatar and Iran by then.
Feedback Do you have comments, questions, or opinions on this piece or issue? We would appreciate your feedback. Send us your feedback or comments to FGE@FGEnergy.com 38 | LPG BUSINESS REVIEW | APR 2017
STATISTICS LPG Consumption
% Household Use
% Industrial Use
% Transport Use
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STATISTICS LPG Consumption
% Household Use
% Industrial Use
% Transport Use
*Information correct as of Jan 2016 1 Metric Tonne (MT) of this product
1 Metric Tonne (MT) of this product
We are working on growing and developing a more comprehensive LPG statistics database. If you have such data, let us know, we would love to get in touch with you. We can be reached at email@example.com.
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