Minister of Petroleum, Dizeani Allison Madueke
Domgas Nigeria Limited and United Bank for Africa (UBA) have sealed a N47billion deal for the acquisition and installation of 1000 units of containerised Liquefied Petroleum Gas (LPG) skid stations in Lagos State.
The Chief Executive Officer of Domgas Group, Mr. Olufemi Ifayemi, who stated this at a recent inauguration of the Lagos LPG Mega Cooperative Society in Lagos, further disclosed that each of the skid stations would cost N47million.
Ifayemi said the project would not only help promote the growth of LPG in the state, but also make the state greener, safer and cleaner.
He said the mega cooperative society, which was launched would serve as platform and vehicle for driving and ensuring successful execution of the project in the overall interest of all stakeholders.
“After wide deliberations among the promoters of this massive project, we concluded it would be advisable to form a mega cooperative if the project is to be successful. We felt it would be difficult to deal with individuals owing to the huge capital involved in the project and so had to moot the idea of bringing small cooperatives and micro-finance houses together to form a mega cooperative society.
“Our target is to have about 1000 beneficiaries within the cooperative society owning containerised LPG skid stations in strategic locations in the state as a way of enhancing the goal and aspiration of making LPG a fuel of choice in the state. The society is to help in regulating the pricing, distribution and safety of the product as well as handling issues bordering on advertising, welfare and profitability for its members,” he explained.
Ifayemi disclosed that the payment of the N47million for financing the acquisition of each skid station had been structured in a way that would be relaxing for the beneficiaries.
“The banker of the project, UBA has put in place a financing and payment structure that would make it easier and less burdensome for whoever wants to acquire and pay for the skid station. The initial deposit required for procuring the station is N7m which the bank has pledged to make available for those unable to raise this amount provided they are able to produce an equity contribution to prop it up. The remaining N40 million which attracts no form of interest is to be paid installmentally within 36-50 months to the bank for warehousing. This payment plan is geared towards relieving the beneficiaries the pain of acquiring and paying for the stations,” he added.
Ifayemi said the skid stations would be deployed in 10 tranches of 100 skid stations each to exhaust the 1000 stations meant for the State, adding that each owner of the skid station would sell about 30metric tonnes of LPG monthly to guarantee a quick and high rate of return on investment for the investor.
According to him, every skid owner would also be supplied about 1000 composite (plastic) cylinders annually for five years for distribution free of charge to encourage users of the product.
Ifayemi noted that about five million cylinders would be distributed by the 1,000 beneficiaries to their customers to facilitate the switch from kerosene to cooking gas.
He further stated that 1,000 Point of Sales (PoS) terminals had been deployed by UBA for all the skid stations in line with the cashless policy of the government and also to avert the risk of diversion.