Nigerian firm lands $30m gas cylinder project in Egypt
London, June 26, 2019 (AltAfrica)-Rungas Industries, a subsidiary of Rungas Group of Companies, in collaboration with United Group of Egypt, has secured an executive partnership with the National Organisation for Military Production (Egyptian government) to produce and assist with the distribution of Liquefied Petroleum Gas (LPG) and Compressed Natural Gas (CNG) composite cylinders. The Egyptian government has already allocated 28,000 square meters of land for the $30 million project in Alexandria; which is the home for the Egyptian Gas Industrial Park.
The facility will be producing 200,000 LPG composite cylinders for domestic use (cooking) and 130,000 CNG cylinders for vehicles and automobiles. Daily Trust gathered that Rungas, in conjunction with Amtrol-Alfa Worthington of Portugal, are providing the technology and technical know how to set up the type III LPG Composite Cylinder Facility which will be dedicated to domestic use whilst the CNG cylinders produced will be used for vehicles across Egypt.
Both products will be exported from Egypt to neighbouring Arab countries as well as serve the North and Eastern African markets. It was learnt that the Egyptian government has mandated Rungas and its partner, United Group, to set up the facilities after extensive product research was carried out and Amtrol facility in Portugal was visited by an Egyptian delegation to carry out a compliance inspection to ensure that cylinders met all standards for cylinder production in Egypt.
The Vice Chairman and Managing Director of the National Organisation for Military Production, Hassan Ahmad Ab Elimagied, executed the contracts on behalf of the Egyptian government and provided his support verbally for the project. According to Chief Executive Officer, Rungas Group of Companies, Lanre C, Rungas has been an agent of Amtrol Alfa-Worthington, promoting their LPG composite cylinders across the West Africa Sub region.
“Whilst operating an import and supply model, we have been supplying composite cylinders to oil major and independent retailers across 10 states of Nigeria, to Oando, MRS, Forte Oil, Ultimate Gas and Sublime to name but a few. Runsewe also said the company has gotten approval from the Ghana Standards Authority to supply and distribute the Ghanaian market with Amtrol LPG composite cylinders and are in the process of gaining regulatory approvals in Cameroon and Cote D’Ivoire.
He advised that the Type IV CNG composite cylinders that would be produced would be the first of its kind in Africa, Asia and Middle East, stressing that the cylinders would be in two sizes with a capacity of 60 litres for domestic use and 80 litres for public vehicles. He also stated that “CNG is important for the Egyptian government because of the need to run on cleaner fuel and also to meet IMF conditions which advised the country to reduce fuel subsidy”.
The Ministry of Armed Production has actually engaged with CNG operators who currently import the product from India, China and Italy to embrace this new development. In addition to the land contribution, the Egyptian government is also providing regulatory and off-take support whilst all funding and financial support for the project is being sourced through private equity.
The raw materials to be used for the production are to be sourced locally from SIDPEC which is the largest petrochemical company in Egypt. Runsewe revealed that the groundbreaking for the project would be in September 2019, projecting that production of LPG cylinders is expected to start within nine months from the groundbreaking date whilst the launch date for the CNG composite cylinders is 18 months.
Source: Daily Trust