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LPG BOTTLING PLANT AND AUTO GAS STATION MARKETING
FEASIBILITY
Mohammad Saeed Awan
Mobile # 0323-5252814
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INTRODUCTION LPG is an abbreviation for "liquefied petroleum gas" and encompasses several products in the hydrocarbon family; compounds composed of carbon and hydrogen of varying molecular structures. Propane and butane are the two best known hydrocarbons hydrocarbons that are used as fuel in homes, homes, businesses businesses and industries. industries. In the international international markets, markets, LPG predominan predominantly tly refers to a propane-buta propane-butane ne mixture. These mixes may vary in composition composition from ones that are predominantly butane to ones which propane is the principal constituent. LPG, whether butane or propane, is unique in that it can be transported and stored as a liquid but when released it will vaporize and burn as a gas. Also, LPG can easily be changed from either liquid state or gas state. No other commercial fuel has these characteristics. Natural gas, for example, cannot be transported in a tank in any meaningful meaningful quantities quantities unless it is either either compressed compressed to extremely extremely high pressures pressures or chilled chilled to 259°F (-126°C), (-126°C), at which point it liquefies. Even when compressed, it contains only a fraction of the useful energy of the identical volume of liquid state LPG. When liquefied, LP gases are always at their boiling point at normal temperatures. The slightest drop in pressure or the least addition of heat will cause them to boil and give off vapor or gas. This characteristic becomes critical when considering the transfer of liquefied gases from one tank to another. Being a liquefied gas, LPG must be stored in an enclosed container under pressure. The fluid in a tank is in state of equilibrium with the gas vapors on top of the liquid providing the tank pressure to keep the liquid from boiling. The specific gravities of the liquids are just over half that of water. This means a gallon of propane or butane weighs only half the weight of a gallon of water. Also, propane and butane have viscosity of about 0.1 centipoise, which make them approximately 10 times thinner than water. This property makes LPG a difficult fluid to pump since a low viscosity fluid is harder to seal and prevent pump slippage. The single significant difference between propane and butane is their boiling points, the temperature at which each will vaporize. Butane boils at approximately +32°F (0°C), propane at -44°F (-42°C) at atmospheric pressure. Therefore, at 0°F (-18°C), butane will not vaporize at atmospheric pressure while propane will. Consequently, at any given temperature, the pressure for a propane vessel will be higher than a butane vessel. "Vapor Pressure of Liquefied Gases." LPG is inherently a safe fuel. Two prime factors contribute to LPG safety; one is its narrow limits of flammability, the other is the fact that the container in which it is stored is extremely strong and airtight. If the confined gas cannot escape it can't burn. LPG has narrower limits of flammability than most fuels. For propane, the respective limits are 2.4% and 9.6%. This means that when the concentration of LPG in air is less than about 2.4% or more than 9.6%, the mixture will not support combustion. LPG is cleaner than petrol and diesel because it is composed of predominantly simple hydrocarbon compounds. Compared with emissions from vehicles on petrol and diesel, emissions from LPG-driven vehicles contain lower levels of hydrocarbon compounds, nitrogen oxides, sulphur oxides, air toxics, and particulates. There is no conclusive evidence to show LPG is more dangerous or less dangerous than petrol or diesel. Human factor plays an important role in affecting the safety in using LPG. While capital cost is incurred in switching to LPG, LPG-driven vehicles have a slightly lower maintenance cost than petrol-driven or diesel-driven vehicles. The running cost of LPG-driven vehicles is lower than petrol-driven and diesel-driven vehicles in many territories mainly due to lower fuel tax rate on LPG. The introduction of LPG in most overseas countries was non-mandatory except in the US where federal and state fleets have to comply with the National Energy Policy Act 1992 to have certain percentage of their new vehicles to
Mohammad Saeed Awan
Mobile # 0323-5252814
3 run on alternative fuels. Overseas governments have used various measures, fiscal and non-fiscal, to create an environment that encourages the use of automotive LPG.
Overseas governments also try to enhance safety in using LPG by introducing regulations or codes of practice to regulate the use of LPG vehicles, the design and construction of LPG fuel tanks and to restrict handling of LPG to trained personnel.
International Automotive LPG Markets
Automotive LPG, the alternative motor fuel Automotive LPG is the most widely used alternative motor fuel, powering more than 8 million vehicles worldwide in over 38 countries. Its environmental benefits, practical advantages and overall effectiveness have already been widely demonstrated and acknowledged. Automotive LPG is a clean non toxic by-product extracted from natural gas processing and oil refining – it therefore brings benefits by strengthening Europe's diverse energy mix and independence in terms of security of energy supply.
LPG fuelled vehicles have low tailpipe emissions of both regulated and non -regulated pollutants : the main advantage of LPG remains in its C02 benefit over petrol and its NOx and particulate benefits over diesel -but, the exhaust gases of LPG vehicles show also less smog forming potential and contain less carcinogenic components like Benzene and aldehydes. Using automotive LPG in road transport can therefore help reduce total emissions and improve air quality.
Status of the Automotive LPG market in Europe In Europe, automotive LPG is used by more than 2.6 million LPG vehicles. The main driver for this success has been the goal of improved air quality performance which has been consistently proven through a variety of independent formal studies.
Mohammad Saeed Awan
Mobile # 0323-5252814
4
Overview of LPG light vehicles running in Europe as 31st December 2001 (source : AEGPL & WLPGA statistics)
Given Given the EU's EU's drive drive to promot promotee altern alternativ ativee fuels, fuels, which which bring bring enviro environme nmenta ntall advant advantage ages, s, and the increased concerns about the need to guarantee security of energy supply in Europe, automotive LPG is expected to reach 5% share of the European vehicle market by the year 2010. However, the vast amount of LPG currently used as chemical feedstock in petrochemical processes (which can easily change to naphta), would allow the operation of 18 to 20 mil lion vehicles in Europe. This expansion will occur without wit hout introducing significant changes in customer usage patterns. One key reason for the leadership of autogas in Europe, is the density of its distribution network. There are approximately 13.500 autogas refuelling sites out of a total of 95.000 public retail sites. The number of autogas refuelling sites can also be increased with relative ease. This means that autogas is not a theoretical alternative fuel but a highly practical one due to its ease of handling and wide availability. A wide choice of LPG vehicles is already available either from OEMs (more than 10 models already available on the European market) or from importers & certified retrofitters. OEMs vehicles comply with very stringent emission targets, as well as safety rules, and are subjected to European type-approval. Retrofitted vehicles have also to comply with increasingly stringent rules, in particular regarding the LPG equipment installations. Thus, current LPG vehicles offer drivability and comfort to the end-consumer, at least equal to that of conventional cars. Implem Implementa entation tion of new technol technologi ogies es for LPG engines engines (such (such as E-OBD E-OBD compli complianc ance) e) and for LPG components (e.g. polymorphic composite tanks) highlight the desire of the Autogas Industry to put on the market vehicles designed to the highest standards.
Mohammad Saeed Awan
Mobile # 0323-5252814
5
Automotive sector in Europe
Facts and figures on the Automotive sector More than 250 million vehicles on the European roads The road transport sector will continue to grow
forecast at 310 million by 2020
With 16 million new passenger car registrations in 2007, Europe accounts for 33% of the
world market ACEA members (European car manufacturer’s association)are one of the major employer in Europe (> 12 million jobs)
Auto gas in Europe today Top 10 Autogas countries in EU 27 (+Turkey)
Autogas in Europe today
End 2007: More than 24,500 filling stations to support a population of more than 4.8 million Light duty vehicles in the EU-27
LPG is EU’s number one alternative fuel
Some information on the German market Some figures:
2004: 2005: 2006: 2007:
population of 30,000 LPG cars + 35,000 + 60,000 + 75,000
600 Filling Stations 1,000 FS 2,100 FS 3,200 FS
DVFG target: 1,000,000 LPG-fuelled vehicles by 2015
Mohammad Saeed Awan
Mobile # 0323-5252814
6 Today, more and more car manufacturers/importers outlets market LPG vehicles: Chevrolet, Fiat, Opel, VW, Chrysler, Ford, Kia, Citroën, Subaru, Mazda, Mitsubishi, Cadillac….
LPG BUSINESS IN PAKISTAN LPG Market in Pakistan ⇒ ⇒ ⇒ ⇒
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More than 40% of LPG is consumed by the Auto sector. Roughly 40% is consumed by the Domestic sector. Around 10-15% is consumed by the Commercial sector including Hotels. The remaining 5% is consumed by the Industrial sector. There exists a latent demand of 4000 MT per day vs. current domestic production of 1650 MT Marketing Cos. have made windfall profits because of price caps, created artificial shortages and hindered flow of imports The only way to capture this demand is by equating local producer prices to Saudi Aramco as t his would:
LPG BUSINESS OPPORTUNITY IN ALL OVER PAKISTAN Currently out of 25 million households in Pakistan, 4.3 million are connected to natural gas network and the rest are relying on LPG and conventiona conventionall fuels like coal, firewood, kerosene, kerosene, dung cake etc, which indicate the strong demand for Liquefied Petroleum Gas (LPG) sector. Liquef Liquefied ied Petrol Petroleum eum Gas (LPG) (LPG) is used used as fuel fuel for cooking cooking and heating heating in the northern northern Pakistan Pakistan particularly in Punjab. It is also used as fuel in vehicles particularly taxi and rickshaws. More than 75,000 rickshaws and taxis in Karachi, Lahore and other parts of the country are run on LPG. The demand of LPG in Karachi is consistent throughout the year and increases during winters in Punjab and Northern Pakistan. Although demand of LPG is persistent throughout the year, supply of LPG from producers (or extrac extractors tors)) to distri distribut butors ors and market marketing ing compan companies ies has been been limited limited due due to mainten maintenanc ancee and overhauling overhauling shutdowns, shutdowns, which often creates shortages. shortages. Besides that, LPG producers producers are also limited in numbers and LPG marketing companies need to have a quota of gas to be allocated by the producer. This factor makes LPG business vulnerable in the hands of LPG producers. LPG (Liquefied Petroleum Gas) is the generic name for commercial propane and commercial butane. Thes Thesee are hydr hydroc ocar arbo bon n prod produc ucts ts prod produc uced ed by the the oil oil and and gas gas indu indust stri ries es.. Comme Commerc rcia iall Propa Propane ne predo predomin minant antly ly consis consists ts of hydroc hydrocarb arbons ons contain containing ing three three carbon carbon atoms, atoms, mainly mainly propan propanee (C3H8) (C3H8).. Commercial Butane predominantly consists of hydrocarbons containing four c arbon atoms, mainly n- and iso – butanes (C4H10). They have the special property of becoming liquid at atmospheric temperature if moderately compressed, and reverting to gases when the pressure is sufficiently reduced. Advantage is taken of this property to transport and store these products in the liquid state, in which they are roughly 250 times as dense as they are when gases.
PROJECT BRIEF LPG produc productio tion n is a capita capitall intens intensive ive busine business ss and requir requires es huge huge invest investmen mentt depend depending ing upon upon the techno technolog logy y and methodo methodolog logy y employ employed ed for the extrac extractio tion n and proces processin sing g of LPG. LPG. Howeve However, r, LPG
Mohammad Saeed Awan
Mobile # 0323-5252814
7 Marketing and distribution needs comparatively less investment and can be considered by the Small and Medium scale investors. The proposed project envisages setting up of LPG marketing and distributing company (related business in this regards, Auto Gas Station and mini Bottling plant) LPG is generally known as LPG bottling plant business. LPG marketing and distribution business will setup a bottling plant with storage tanks and filling dispensers. The business facility will hold a certain quantity of LPG quota, allocated by one of the LPG producer and this allocated LPG will be supplied to the marketing company through Bowzer (gas supplying trucks). The company will store this LPG in its storage facility from where, supply to the sub-distributo sub-distributors rs will be made. Sub-distribu Sub-distributors tors will bring their cylinders and get them filled against payment. OGRA also approved mini bottling plant and Auto gas station in all over Pakistan.
MARKET ENTRY TIMING There is a right time for the entry in LPG marketing Business. (Mini Bottling plant and Auto Gas Stations)
PROPOSED BUSINESS LEGAL STATUS The legal status of business tends to play an important role in any setup; the proposed LPG Marketing and Distribution business is assumed to operate on as a private limited company. It is mandatory for an oil or gas company to register as a private limited company.
PROPOSED LPG BOTTLING/DISTRIBU BOTTLING/DISTRIBUTION TION PLANT CAPACITY The capacity of the proposed LPG storage and distribution facilities would be around 4 M.Tone to 100 M. Tons,
PROJECT COST Total project cost of the LPG Marketing Marketing & Distributio Distribution n business would be approximat approximately ely 04 million million to Rs. 45 million.
PROJECT INVESTMENT A total of Rs. 45 million will be required to setup and operate the proposed LPG Marketing and Distribution business.
KEY SUCCESS FACTOR & PRACTICAL TIPS Following are the key success factors in LPG business: LPG quota allocation: Most of the existing plants with fully operational facilities are out of work
because of delays in their quota allocation by the LPG producers. dealing with the sub-distributors: Sub-distributors play important role in the successful operations of a LPG Marketing company because they distribute gas among agency holders who further sale it to the retailers. Cheap Irani LPG is available in the market: In such circumstances when cheap Iranian gas is available, a LPG marketing and distribution company may face a situation where it would be forced to lift its quota as per agreement from the producer at a higher cost and sell it at lower price.
Mohammad Saeed Awan
Mobile # 0323-5252814
8 INVESTMENT OPPORTUNITY IN THIS SECTOR The Government Government has focused on this sector and has approved “LPG production and distribution distribution policy 2006” This policy aims at increasing LPG supplies, streamlining its distribution at affordable prices, especially to LPG starved areas of the country and promoting healthy competition or growth of LPG market while ensuring minimum safety standards across the Liquefied Petroleum Gas supply chain. To achieve this goal, issues regarding LPG production, LPG licensing, safety standards, pricing, distribution in under developed areas and import of LPG have been addressed in this policy. Prior to the announcement of the above policy, there has been a shortage of LPG particularly during winter when most of the oil refineries shutdown their LPG production operations for annual maintenance. Most of the refineries refineries had a practice practice to close LPG production production at the same time which resulted resulted in severe severe shorta shortage ge leadin leading g to a conseq consequen uentia tiall increa increase se in price. price. In order order to avoid avoid such such situat situation ions, s, now it is mandatory mandatory for the oil refineries refineries to announce a schedule schedule of maintenance maintenance ensuring ensuring a certain certain level of LPG supply to the market. Besides the oil refineries who produce LPG as a by product, some of the specialized projects i.e. JJVL (Jamshoro Joint Venture Limited) are focusing on producing only LPG which would help in consistent supply of LPG to the marketing and distribution companies. It is expected that second facility of JJVL will commence its operations shortly.
MARKET INFORMATION CURRENTMARKET
Currently there are 76 LPG marketing and distribution companies operating in Pakistan. Based on the information provided by the existing players, about 50 of them are operating and rests are waiting for the allocation of LPG quota. LPG’s use as fuel for cooking and household requirements is most common in the rural areas of Punjab and NWFP (with a daily demand of about 500 to 800 ton). In the southern region of the country, Karachi is the biggest consumer of LPG with an approximate daily demand of about 250 to 300 ton. These indicative figures are expressed by the LPG marketing company representatives and could vary based on specific market circumstances.
MARKET POTENTIAL Attraction for LPG among the commercial vehicle operators (particularly taxi and auto rickshaw) in Karachi, Lahore and other large cities & its demand in the rural areas of Punjab which account for about 80% of the total demand makes the LPG sector an attractive business. Following comparison of different fuels and their respective benefit analysis gives a clear picture of the LPG attractiveness among the automotive users.
With a view to ensure adequate supplies of LPG in remote, rural and hilly areas of the country, and to halt deforestation, OGRA has ruled out a policy that all LPG marketing companies receiving LPG from sources in Punjab and NWFP will be obligated to supply at least 7% of their local LPG in Northern Areas, 7% in AJK and 6% in FATA.
Mohammad Saeed Awan
Mobile # 0323-5252814
9 AUTO VEHICAL FUEL PRICING COMPARISION
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PRICE COMPARISION OF PETROL, CNG, AND LPG
Petrol drive costs Rs. 4.84 per kilometer as against Rs. 1.78 for L.P.G and Rs. 3.8 for CNG. On an average mileage of 40 kilometers, an average driver using LPG makes a saving of Rs. 123 per 40 km, and for a CNG operated vehicle, the saving is Rs 42 40 km,This clearly suggests a cost benefit benef it of LPG and CNG over petrol hence has a greater attraction for vehicle operators.
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Compare Chart average price of Petrol for the current year 2009; Rs. 58 per liter.
Fuel LPG Petrol
Cost per liter 25 58
Mileage per liter 14km 12km
Fuel LPG CNG
Cost per kilo 35 50
Mileage per kilo 28 km 13 km
Mileage per Rs. 100
60 km 29 km
Mileage per Rs. 100 83 km 26 km
LOCAL PRODUCTION OF LPG: At present, the following eight producers are producing around 1600 M. Tons of LPG per day in the country. S. No
1 2 3 4 5 6 7 8 9
Name of Producers Paki Pakist stan an Refi Refine nery ry Limi Limite ted d
Nation ional Re Refine inery Lt Ltd. Ka Karachi Attock Refinery Limited Pak-Arab Refinery Ltd (PARCO) Paki Pakist stan an Petr Petrol oleu eum m Lim Limit ited ed Oil & Gas Development Company Ltd. Pakistan Oilfields Ltd Orient Pe Petroleum In Inc Jamshoro Joint Venture Limited
Mohammad Saeed Awan
Location/Phone No. 7-B, 7-B, Koran orangi gi Indu Indust stri rial al Zone Zone,, Kora Korang ngi, i, Kara Karach chi. i. Ph: 021-5062005. Ph. No No.021-5064981-86 Morgah, Rawalpindi. Ph.No.051-5487041. Korangi Creek Road, Karachi Ph. 0215090100-13 PIDC PIDC House ouse,, Dr. Dr.Zi Ziau audd ddin in Ahme Ahmed d Roa Road, d, Ph. 021-5682562 OGDCL, Building, Jinnah Avenue, Islamabad Ph.No.051-9209701 Morgah, Rawalpindi. Ph.No.051-5487589 Hayat Ha Hall, Bl Block No No.2, Diplomatic En Enclave No.1, G-5, Islamabad Ph. No. 051-2274261 Associated House, House No. 8, Street No.37, F/7-1, Islamabad, Ph. No. 051/2652727-29
Mobile # 0323-5252814
10 LPG PRODUCED Following table provides LPG producers with their production sites and quantity of produce during 2006-07:
Producer OGDCL
POL
OPI
PPL PRL PARCO NRL ARL JJVL. Grand Total Average/day
Name of Field Dhakni Dhodak Kunnar Bobi Sub Total Dhulian Meyal Pariwali Pindori Turkwal Sub Total Ratana Mayal Naimat Basal Siraj South Umar Sub Total Adhi
LPG Produced (M.Tons) 572 5,750 1,104 2,500 9,926 287 622 1,854 2,379 3 5,145 62 1,404 0 0 1,466 2,133 1,192 11,332 1,481 851 13,438 46,964 1,514
LPG UPLIFTED BY MARKETING COMPANIES.
Data on LPG uplifted by the LPG marketing companies during past one year has been provided in the following table:
Name of the Company SHV Energy Fon Gas Wak Limited Shell Gas Pakistan State Oil Caltex Eirad Company Limited Lub Gas Pakistan Oil Fields Limited Mehran LPG Baluchistan Gas Cap Gas Sun Gas Petrosin Gas
Mohammad Saeed Awan
LPG Uplifted (M. Tons)
4,972 3,350 3,219 2,786 1,719 1,984 2,112 4,466 6,079 2,483 836 625 607 385
Mobile # 0323-5252814
11 Muhammadi Gas Ravi Gas Aftab Traders Agha Gas Bolan Gas Pro Gas Gas Man Power Gas Links International Synergy Gas Baluchistan Minerals Cress LPG Noor LPG Petroleum Gas Tez Gas Soneri Gas Sam Gas Super Star AB Gas Golden Gas Wyne Gas
2,048 1,216 1,180 144 184 1,122 118 283 448 717 148 686 454 424 656 0 538 261 222 500 124 47,096
TOTAL.
LPG DISTRIBUTION PROCESS (SUPPLY CHAIN)
Typical distribution process and supply chain of LPG has been illustrated i n the following diagram:
LPG Production Company
LPG Marketing & Distribution Company
LPG Distributo r/ SubDistributo r
LPG Retail Agent
LPG Retail Sales Shop
PRODUCTION PROCESS OF LPG
There are three methods for the production of LPG: 1) Extracted from natural gas: 2) By product of Oil refining process: 3) Produced during Oil refining process. However, it should be noted that from natural gas, LPG can only be extracted from the points where propa propane ne and butane butane is mixed mixed with with the natur natural al gas in certai certain n quanti quantity. ty. In the followin following g lines lines production/extraction process of LPG from natural gas has been elaborated. The patented AET Process LPG Recovery Unit technology utilizes non-cryogenic absorption to recover C2+ or C3+ natural gas liquids (LPG’s) from natural gas streams. The absorbed LPG’s in the
Mohammad Saeed Awan
Mobile # 0323-5252814
12 rich solvent from the bottom of the LPG absorber column are fractionated in the solvent regenerator column column which which separa separates tes LPG’s LPG’s overhe overhead ad and lean lean solven solventt produc produced ed at the bottom bottom.. After After heat heat recuperation, the lean solvent is pre-saturated with absorber overhead gases. The chilled solvent flows in the top of the absorber column. The separated gas from the presaturator separator forms the pipeline sales gas. Depending upon the economics of ethane recovery, the operation of the AET LPG plant can be switched on-line from ethane plus recovery to propane plus recovery without affecting the propane recovery levels. The AET LPG plant uses lighter lean oils. For most applications, there are no solvent make-up requirements. AET can design retrofits for heavy lean oil facilities.
Production Process Flow Diagram
TECHNOLOGY OPTIONS
Mohammad Saeed Awan
Mobile # 0323-5252814
13 For a LPG storag storagee and distrib distributi ution on plant, plant, techno technolog logy y option optionss are import important ant while while select selecting ing filling filling equipment, storage tanks and filling pumps. For the proposed project following technology options have been assumed:
Gas filling dispensers Pumps Storage Tanks
= = =
(available in local and foreign market) (available in local and foreign market) (available in Local Market)
PLANT ANDMACHINERY REQUIREMENT Machinery required for the LPG distribution plant would include the following:
PLANT AND MACHINERY
S. No 1 2 3 3 4 5 6 7 8
Machine
Storage Tank- 100 tonne Storage Tank - 10 tonne Storage Tank - 10 tonne Filling Dispenser Pumps Cylinders(11.8 KG) Cylinders (45.4 KG) Support Structure - Piping & Valves Fire Fighting Equipment
Required No. of Units 1 1 1 4 2
500 200 as per area
1
There are few local suppliers/ manufacturer of storage Tanks and other related machinery for LPG distribution setup. PLANT AND MACHINERY MAINTENANCE
All machines require routine cleaning and maintenance after every three months and an annual service which costs around 1% to 5% of the total cost depending upon the use of the machine and a nd operator's skill. We have assumed an average of 3% of the initial plant and machinery cost as the annual maintenance cost.
LAND AND BUILDING REQUIREMENT SITE DEVELOPMENT
LPG Plant is sophisticated and requires fool proof system, because Liquefied Petroleum Gas is flammable and during site development, prescribed instructions for fire extinguishment systems must be complied with. Qualified Consultant Engineers shall be engaged for preparing structural drawings for LPG site. LAND REQUIREMENT FOR PLANT
In order to comply with structural standards prescribed by the explosive department and provisioning for the future expansion in the storage capacity, a minimum of 2 Acre area would be required for the proposed LPG setup.(mini Bottling plant 10,000 to 20,000 Sft and Auto Gas Station 10,000 Sft) Land required.
Mohammad Saeed Awan
Mobile # 0323-5252814
14
PROJECT COST FINANCIAL ANALYSIS FOR BOTTLING PLANT, MINI BOTTLING PLANT, AUTO GAS STATION WITH LAND COST.
M.Tone Capacity Capacity Plant Cost, 45 Million (Land required required 2 acre) 1- 100 M.Tone
2- 10 M.Tone Capacity Plant Cost, 04 Million (Land required 20,000 Sft) (with out civil work) 3- 04 M.Tone Capacity Plant Cost, 02 Million (Land required 10,000 Sft) (with out civil work) Gas Station Station 5 M.Tone Cost, 10 Million Million 4- Auto Gas
(Land required 10,000 Sft)
LPG PRODUCTION AND DISTRIBUTION POLICY 2006 INTRODUCTION:
Liquef Liquefied ied Petrol Petroleum eum Gas (LPG) (LPG) is a colour colourles less, s, odourl odourless ess and enviro environme nment nt friend friendly ly mixture mixture of hydrocarbons (mainly propane and butane) which is gaseous at normal temperature and pressure, and liquefiable under reduced temperature or m oderate pressure. A chemical ethyl mercaptan is added to impart a pungent odour for leak detection. Currently about 1600 tons/day LPG is being produced domestically contributing 0.4 % to the total energy supply mix. Because of its characteristics LPG is fast becoming a fuel of choice in the areas, where natural gas distribution network is not available. Currently out of 25 million households in Pakistan, 4.3 million are connected to natural gas network and the rest are relying on LPG and conventional fuels like coal, firewood, kerosene, dung cake etc. In June 2000, the Federal Government decided to deregulate the LPG industry with a view to making it investor investor friendly, friendly, foster foster healthy healthy competition competition,, improve improve safety safety standards, standards, and ensure ensure better consumer consumer services. Accordingly, in supersession of LPG (Production & Distribution) Rules 1971, LPG (Production & Distribution) Rules 2001 were formulated under which LPG allocations made by the Ministry of Petroleum & Natural Resources (MPNR) prior to deregulation were given protection to the extent of terms terms of existi existing ng agreem agreement entss betwee between n the market marketing ing compan companies ies and produc producers ers.. These These Rules Rules also also empower the producers and marketing companies to fix a reasonable producer price for their product and a retail price respectively. After promulgation of Oil & Gas Regulatory Authority (OGRA) Ordinance, 2002 all LPG regulatory functions as envisaged in LPG (P&D) Rules, 2001 were transferred to OGRA in March 2003.
OBJECTIVES: This policy aims at increasing LPG supplies, streamlining its distribution at affordable prices, especially to LPG starved areas of the country and promoting healthy competition for growth of LPG market while ensuring minimum safety standards across the LPG supply chain. To achieve this goal, issues regarding LPG production, LPG licensing, safety standards, pricing, distribution in under developed areas and import of LPG have been addressed in this document.
Mohammad Saeed Awan
Mobile # 0323-5252814
15
POLICY GUIDELINES DISPOSAL OF LPG BY PUBLIC SECTOR (E&P) COMPANIES
Public sector E & P companies will out source all LPG production to technically and financially sound priva private te sector sector partie partiess holdin holding g valid valid licens licensee from from OGRA OGRA for the purpos purposee throug through h a transp transpare arent nt and competitive process with a view to making LPG supplies available on commercial and market driven considerations. The outsourcing process must ensure that no cartels and monopolies are created. The above process should be completed within six months of the announcement of the policy. LPG LICENSING, LICENSING,
OGRA OGRA will will issue issue provis provision ional al license licensess to techni technical cally ly and financ financiall ially y sound sound applica applicants nts// parties parties for construction of works commensurate with their work programmed, for a period of one year. OGRA will induct additional reputable third party inspectors to check/monitor compliance with the terms and conditions of licenses. The licenses shall be cancelled in case of non-compliance with licensing terms and conditions. LPG SAFETY STANDARDS
To ensure ensure safety safety throug throughou houtt the LPG supply supply chain, chain, LPG storag storagee tanks, tanks, cylind cylinders ers bowzer bowzers, s, and distribution outlets of the licensees will meet the minimum safety standards as laid down in applicable Rules. Decanting of LPG from cylinder to cylinder is prohibited and OGRA shall cancel licenses of the LPG marketing companies involved in this activity directly or indirectly. OGRA will prescribe codes and standards for conversion of vehicles to LPG and the establishment of LPG re-fuelling stations for the auto sector by LPG marketing companies. OGRA will develop safety standards, rules and procedures in line with the international best practices for regulating the LPG auto sector, and an effective compliance monitoring mechanism will be put in place by the regulator. OGRA will publish a list of authorized manufacturers for all LPG equipment including LPG refilling stations, conversion kits, fuel tanks, cylinders, storage t anks, and bowzers. LPG fitted vehicles will be obligated to obtain insurance cover to ensure compliance of prescribed standards for cylinders and conversion kits. LPG PRICING
The Federal Government will prescribe a formula for LPG producer (base-stock) price within three months of approval of the policy. The Federal Government will continue to follow its deregulation policy. However, to ensure that cartels are not formed for charging a high consumer price of LPG, OGRA will determine the reasonableness of price keeping in view the import parity price of LPG, producer price and audited accounts of LPG marketing companies for the last two years.
Mohammad Saeed Awan
Mobile # 0323-5252814
16 OGRA will regularly monitor LPG prices and intervene in exceptional circumstances if the consumer prices are considered not reasonable.
DISTRIBUTION OF LPG IN UNDER DEVELOPED AREAS
With a view to ensure adequate supplies of LPG in remote, rural and hilly areas of the country, and to halt deforestation, all LPG marketing companies receiving LPG from sources in Punjab and NWFP will be obligated to supply at least 7% of their local LPG in Northern Areas, 7% in AJK and 6% in FATA. All LPG marketing companies receiving LPG from sources in Sind and Balochistan will be obligated to supply at least 10% of their local LPG in Balochistan province. OGRA will develop an appropriate mechanism to monitor actual supplies to the above specified areas. OGRA will initiate action against defaulting LPG marketing companies under the applicable rules and license conditions which, interalia, may include revocation/cancellation of marketing licenses.
IMPORT AND EXPORT OF LPG
Any party can import LPG after paying applicable government dues. However, for the handling of LPG a license will be obtained from OGRA. No party shall export LPG without the prior approval of MPNR. GENERAL
i) For effective policy formulation all LPG licensees shall furnish requisite information/data to MPNR as may be required. ii) OGRA will also apprise the MPNR about the implementation status of this policy on a quarterly basis. iii) The Federal Government may issue instructions to OGRA from time to time for implementation of this policy and/or in respect of matters related thereto, as may be considered necessary. LPG LICENSING
Any company willing to distribute and market Oil and Gas needs to obtain a license from OGRA. Additionally, license from Explosive department is also required for the proposed LPG marketing and distribution business. OGRA (Oil & Gas Regulatory Authority) issues provisional licenses to technically and financ financial ially ly sound sound applica applicants nts// partie partiess for for constr construct uction ion of works works commen commensur surate ate with with their their work work program, for a period of one year. OGRA inducts reputable third party inspectors to check/monitor compliance with the terms and conditions of licenses. The licenses can be cancelled in case of non-compliance with licensing terms and conditions . PRE-QUALIFICATION PRE-QUALIFICATION FOR LPG STORAGE & FILLING LICENCE
Following requirements are required to be fulfilled for obtaining a license: Application on the prescribed proforma in triplicate Pay Order / Bank Draft of Rs.100,000/- in favour of Oil & Gas Regulatory Authority, as License
fee (Payable at Islamabad). Proof of registration of the Company (Company incorporation certificate). Memorandum and Articles of Association. Attested copies of ID cards of all Directors . Location of the tentative / proposed site. Financial Competence Certificate issued by a Bank (original and stamped). Last three years’ Audited Reports (not applicable for new companies).
Mohammad Saeed Awan
Mobile # 0323-5252814
17 Minimum Work Program: Number of storage tanks and capacity of storage tanks.
Bottling facility capacity. Quantity of LPG to be distributed per day or per month. Identification of areas where distribution / marketing of LPG is planned
PRE-QUALIFICATION PRE-QUALIFICATION FOR LPG AUTO REFUELING STATION Application on the prescribed Performa. Layout plan clearly highlighting the exact location of refueling station anddetail of all equipment
and inter distances (vetted by OGRA’s 3rd Party Inspector, M/s ENAR Petrotech Services (Pvt.) Limited). NOC of Environmental Protection Agency. NOC from Local/ District Authority. Pay Order / Bank Draft of Rs.100,000/- in favour of Oil & Gas Regulatory Authority, as Licence fee (Payable at Islamabad). Attested copy of insurance cover obtained for the proposed refueling station.
OGRA, LAYOUT PLANS FOR INSTALLATION OF LPG AUTOGAS STATIONS
BACKGROUND & INTRODUCTION: The Federal government in a meeting held on 21st September, 2005 considered the Ministry of Petroleum and Natural Resources summary and approved in principle the use of LPG in motor vehicles, subject to Oil and Gas Regulatory Authority (OGRA) providing a regulatory frame work ensuring comprehensive safety standards. In this regard, the OGRA has devised a regulatory framework to ensure effective regulation, efficient monitoring and public/consumer safety. The Regulatory Framework for the use of LPG in the Auto sector has become a part of LPG (Production and Distribu Distributio tion) n) Rules Rules 2001 2001 as an Append Appendix ix V by an amendm amendment ent throug through h S.R.O. S.R.O. 256 (I)/ (I)/ 2007 2007 Islamabad, the 10th March, 2007. The Regulatory Framework provides general criteria for installation of LPG Auto gas Stations. Now OGRA has prepared a Brochure containing guidelines / layout plans in accordance with the approved Regula Regulator tory y Framew Framework ork,, showin showing g detail details, s, includ including ing the minimu minimum m requir required ed inter inter distan distances ces for the equipment, storage tanks/built- up areas etc. under NFPA-58. In view of the foregoing, the layout plans were developed, taking into account the following categories: Stand alone LPG Autogas station LPG Autogas station co- located with CNG, Gasoline & Diesel.
DISCUSSION ON REGULATORY FRAMEWORK & DEVELOPED LAYOUTS: Regulatory Framework
The Regulatory Framework contains the following criteria to setup LPG Autogas Stations: The LPG Auto refueling/dispensing station shall only be located on roads/highways having m inimum
60 feet width. The LPG Auto refueling/dispensing station shall not be located in congested or residential areas nor should any of the adjacent buildings i s used for accommodation or public gathering of any sort.
Mohammad Saeed Awan
Mobile # 0323-5252814
18 The installation of LPG refueling station shall conform to the technical standards prescribed in LPG
(Production & distribution) Rules, 2001 & NFPA 58. For ensuring safety, the storage capacity at an LPG auto refueling/dispensing station shall be limited to 10 metric tons (max.). In addition to the requirements of NFPA-58, the minimum area for the installation of LPG auto Refueling / dispensing station shall be in no case is less than 10,000 sq. Feet with a minimum 80 feet frontage and depth.
Only brand new equipment shall be installed at the refueling / dispensing station i.e. use of second
Hand equipment shall not be allowed. Conversion kit and cylinder shall only be installed at licensee approved centers and installed vehicle shall have the respective licensee’s seal of compliance to NFPA- 58, otherwise it will be considered illegal. Layout Criteria
As part of development of layouts for LPG Autogas stations following criteria has been developed based on NFPA-58 (Liquefied Petroleum Gas Code). The minimum distance between LPG vessels and property lines shall be atleast 50ft as per
table 6.3.1. The minimum distance between LPG vessels and any combustible material/dry grass shall be at least 50ft as per table 6.3.1. The minimum distance between LPG vessels and property lines shall be atleast 10ft as per section 6.24 (Alternate Provisions for Installation of ASME containers), which requires use of fail- safe product control measures and low emission transfer concepts. The minimum distance between LPG vessels and buildings with fire resistant walls shall be at least 10ft as per section 6.24. The minimum distance between LPG vessels and any combustible material/dry grass shall be at least 10ft as per section 6.4.5.2 and 6.4.5.4. The minimum distance of LPG vessels vent and any source of ignition/open flame shall be at least 10ft and per table 6.3.9. The minimum distance between LPG vessels and any above ground petrol/diesel storage shall be atleast 20ft as per section 6.4.5.5. The minimum distance between LPG vessels and auto dispenser shall be atleast 10ft as per table 6.5.3 Part (J). The minimum distance between LPG vessels and point of transfer/decanting area shall be atleast 10ft as per table section 7.2.3.3. The minimum distance between buildings with fire resistant walls and point of transfer/decanting area shall be at least 10ft as per table 6.5.3 part (A) and part (F). The minimum distance between source of ignition/open flame and point of transfer/decanting area shall be at least 25ft as per section 7.2.3.2(B). The minimum distance between source of ignition/open flame and auto dispenser shall be atleast 25ft as per section 7.2.3.2(B). The minimum distance between buildings with non fire resistant walls and point of transfer/decanting area shall be at least 25ft as per table 6.5.3 part (B). The minimum distance between buildings with non fire resistant walls and auto dispenser shall be at least 25ft as per table 6.5.3 part (B). The minimum distance between auto dispenser and property line shall be at least 25ft as per table 6.5.3 part (D). The minimum distance between point of transfer/decanting area and property line shall be at least 25ft as per table 6.5.3 part (D). Metal cutting/welding shall be done atleast 35ft away from point of transfer / decanting and auto
Mohammad Saeed Awan
Mobile # 0323-5252814
19 dispenser as per section 7.2.3.2 (C). Public way shall be atleast 10ft away from point of transfer/decanting and auto dispenser as per table 6.5.3 part (F). The minimum distances between points of transfer/decanting and auto dispenser shall be 10ft as per table 6.5.3 part (F).
PETROLEUM PRODUCTION DATA PRODUCTION
The following table presents production data for the last two years for LPG, Petroleum and Diesel.
Item
LPG Petroleum Diesel
Quantity
August
‘000 Liters ‘000 Liters ‘000 Liters
2006 41,124 2,097 276,888
2005 40,895 1,998 324,691
July - August 2006-07 2005-06 82,999 85,450 4,518 4,209 596,176 709,773
It is evident from the table that LPG production which was around 40,895,000 liters during the month of August 2005, increased to 41,124,000 liters during August 2006 which suggests a substantial increase in production. According to last year during July and August LPG production was 85,450,000 liters, which decreased in during the same period in 2006-07 around 82,999,000 liters. It is expected that after commen commencem cement ent of operat operation ionss of JJVL-I JJVL-II, I, the produc productio tion n will furthe furtherr increa increase se which which would would help help in maintaining demand and supply gap in future.
PRODUCT PRICING This is to advise that, t hat, in pursuance of the decision of Economic Coordination Committee (ECC) of Cabinet dated December 06, 2006, OGRA has determined the maximum base stock Price of LPG, effective March 03, 2007 as Rs. 31,949.45 / .Ton, . OIL AND GAS REGULATORY AUTHORITY Maximum Base-Stock Price of LPG Effective March 3, 2007 FOB Saudi ARAMCO Contract Price Propane Butane (US $/ M. ton) (US $/ M. ton) February, 2007
A
526.00
Ratio
B
40
LPG price calculation = A x B Wt. Avg. price US $ /M. TON Avg. US $ exchange rate for Feb. 07 Rs per US$ * Maximum Base-Stock price of LPG Rs. /M. TON Effective March 03, 2007
Mohammad Saeed Awan
21,040.00
526.00 60 31,560.00 526.00 60.74 31,949.45
Mobile # 0323-5252814
20 * Monthly average of the mean of the daily Bid and Offer of Weighted Average Exchange Rate quoted by the State Bank of Pakistan for February 2007, has been provisionally adopted pending clarification from the Federal Government, which has already been sought.
DEMAND
About 90% of auto rickshaw and taxi are fueled by LPG, whereas, majority of the rural population of Pakistan use LPG as cooking and house warming fuel at home. LPG prices move in a similar manner to petrol prices as its demand grows.
THREATS TO THIS INDUSTRY
LPG Distributors Association Pakistan said on November 11, 2006, that the sale of Liquefied Petroleum Gas (LPG) had dropped 30 percent due to unprecedented increase in its prices by producer and marketing companies for the past 7 months4. The association said that the LPG domestic consumers had abandoned its use and turned to firewood while rickshaw owners and other transporters preferred petrol and diesel as LPG firms had been fleecing them by constantly raising LPG rates without any j ustification. The LPG association chairman said that the price of a gas cylinder for domestic use in neighboring India was Rs 236 while it was Rs 650 to 700 in our country (during November and December 2006), which is reported to be self-sufficient. ENVIRONMENTAL AND PROTECTIONS ASPECTS
LPG is much cleaner than diesel. The dirty black smoke that we see coming from diesel vehicles is particulates – a known cause of sickness and deaths. By replacing a diesel engine with an LPG powered equivalent, over 90 percent of this particulate matter can be eliminated. LPG powere powered d vehicl vehicles es emit emit signif significan icantly tly fewer fewer greenh greenhous ousee gases gases and other other pollut pollutants ants than petrol petrol- powered equivalents. LPG typically has around 20 per cent less ozone forming potential (a measure of the tendency to generate photochemical smog), between 10 and 15 per cent lower greenhouse gas emissions and only one fifth air toxics emissions. LPG delivers clear environmental benefits over diesel and petrol. Recent independent automotive tests submitted to the Department for Transport have shown that LPG emits: 120 times less particulate matter compared to diesel; less than half the NOs of petrol and less than one twentieth the NOs of diesel; and 17 per cent less CO2 compared to petrol and 2 per cent less CO2 compared to diesel, on a
well to wheel basis LPG’s impact on the environment in the unlikely event of a spillage is minimal as propane is lighter than water. It therefore readily disperses without combustion and with no contamination of water courses or surrounding land – unlike petrol or diesel where spillage is a major environmental concern. PRODUCT/PROJECT STANDARDS AND COMPLIANCE ISSUES
Rules and regulations which govern any explosive material also apply on LPG. Its transportation, t ransportation, storage, construction of storage facility, filling of cylinders and their transportation, etc. all need to be carried out according to the standards and specifications provided by the explosive department, government of
Mohammad Saeed Awan
Mobile # 0323-5252814
21 Pakistan. For LPG business, a license will be required from explosive department of the concerned province. Details have been provided in the following lines. REQUIREMENTS FOR GRANT OF PERMANENT LICENSE UNDER EXPLOSIVES
I) II) II) III) III) IV) IV)
Form Formal al appl applic icat atio ion n with with attes atteste ted d photo photoco copy py of Nati Nation onal al Iden Identi tity ty Card Card brie briefl fly y stati stating ng the the purpose of obtaining License and justification. Appl Applica icatio tion n in the the pre presc scrib ribed ed For Form m C, dul dully ly fill filled ed in in and and sign signed ed by by the the appl applica icant nt.. Dist Distan ance ce Form Form D, dull dully y fill filled ed in agai agains nstt all all colum columns ns ther theree of as per per sched schedu ule VI of the Explosives Rules 1940 and signed by the applicant. Orig Origin inal al treas treasur ury y rece receip iptt for for the the amou amount nt paya payabl blee as per per colu column mn 5 of sche schedu dule le IV of the the Explosives Rules, 1940 showing the amount paid under the following Head of Account in any branch of the National Bank or Government Treasury.
1200000-Receipts from Civil Administration & other Functions 1260000-Economic Services Receipts 1264000-Industrial and Mineral Resources 1264100-Industiral and Mineral Resources Industrial Safety Explosives Department V)
No objec objecti tion on certi certifi fica cate te alon along g with with the sign signed ed plan plan from from the the Distr Distric ictt Autho Authori rity ty conc concer erne ned d to the effect that the Authority has No objection to the grant of license to the application for possession/sale of Explosives. No objection certificate if not submitted by the applicant will be obtained by the Department from the District Authority after receipt of other complete particulars from the applicant.
VI)
Six cop copies ies of of plan plan duly duly signed signed by the the applic applicant ant and and draw drawn n to scal scalee on dura durable ble paper paper show showing ing full constructional details of the proposed LPG storage site, and site with full surroundings and important land marks to facilitate its location. The distances maintained around the proposed LPG storage site shall be marked clearly.
VII)
Documents showing the extent of possession/ownership of land for maintaining required safety distances from the explosives storage magazine.
VIII)
Present consumption of explosives in the area and nature of work requiring use of explosives.
IX) X)
Expected market potential in 5 years from now with full justification. Comp Comple lete te deta detail ilss of the the pres presen entt cons consu umers mers of expl explos osiv ives es in the area area givi giving ng thei theirr name names, s, complete complete postal postal addresses, addresses, nearest Police station(s), station(s), approximate approximate daily consumption consumption of explosives by each consumer stating their nature of work requiring explosives.
XI)
Details Details of other other explos explosive ivess magazin magazine(s e(s)) 6 exist existing ing if if any within within a radi radius us of of 50 KM KM from from the site of proposed magazine.
XII) XII)
Any proof proof/ce /certi rtific ficate ate showi showing ng compete competence nce and and experie experience nce of the appli applican cantt or his authori authorized zed worker/agent/employee/supervisor in the handling of explosives.
XIII)
Details of vehicle vehicle to be be used for transpo transport rt of explos explosives ives from from source source of supply supply to the storage storage magazine and the approximate distance in between.
XIV)
Undertaking Undertaking by the the applican applicantt to the effect effect he will will observe observe strictly strictly all all the requirements of Explosives Rules 1940 and submit Fortnightly Reports on the
Mohammad Saeed Awan
Mobile # 0323-5252814
22 three prescribed Forms B-I, B-II, and B-III regarding purchase, use etc. of Explosives. XV)
Certifi Certificat catee to the effe effect ct that that guard guard over over the maga magazin zine7 e7 will will be provid provided ed 24 hour hourss by the the License.
An LPG tank after ten years shall be examined for re-qualification. Re-qualification is a procedure by which a cylinder is inspected and retested to determine its acceptability for continuous service. This method determines if a tank is condemned (a cylinder that does not pass the required tests and can not be repaired), or, repairable. A tank shall be repaired for cuts, corrosion or dents five years after the time of re-qua re-qualif lifica ication tion.. Repair Repair is define defined d as the remova removall and replac replaceme ement nt of parts parts or attach attachmen ments ts of LPG cylinders and other corrective measures. A condemned cylinder, as the standard specifies, is a scrap and should be destroyed either by cutting diagonally, or crushing the cylinder or any part so that it can no longer be used. Consumers are enjoined to make sure that the embossed markings of the brand name or name of the owner is printed on the cylinder. To ensure ensure safety safety throug throughou houtt the LPG supply supply chain, chain, LPG storag storagee tanks, tanks, cylind cylinders ers bowzer bowzers, s, and distribution outlets of the licensees should meet the minimum safety standards as laid down in applicable Rules. Decanting of LPG from cylinder to cylinder is prohibited and OGRA can cancel licenses of the LPG marketing companies involved in this activity directly or indirectly. SPECIFICATIONS SPECIFICATIONS FOR TEMPORARY STORAGE OF EXPLOSIVES
Following detailed guidelines have been provided by the explosive department of the government for the companies dealing in explosive materials. It is mandatory for the LPG businesses to comply with the following. 1. A tempo temporar rary y storage storage may be in above above ground ground strong strong wooden wooden or Bamboo Bamboo Cabin or prefera preferably bly a damp proof pit. 2. The height height of of a cabin cabin or depth depth of of a pit shall shall not not be less less than than 6 feet. feet. 3. There shall be be no uncover uncovered ed iron iron or steel steel in the the constructio construction n of cabins. cabins. 4. For above above ground ground cabin it it is necessary necessary to have have an earthen earthen mound mound or screen screen wall in between between the the Explosives cabin and the cabin containing detonators. 5. The floor floor of the the temporar temporary y storage storage shall shall be covere covered d with wooden wooden planks. planks. 6. Main explosive explosivess and detonator detonatorss shall be stored stored in separate separate cabins cabins or pits pits at least least 10 feet apart. apart. 7. The explosives shall be covered with tarpaulins awning so as to protect against sun and rain and the margin of a pit shall be so raised as not to a llow rainwater to drain inside it. 8. Shelves, Shelves, benches benches and and fitting fitting shall be be of wood or or bamboo bamboo free from from iron iron nails and and grit. grit. 9. The capac capacity ity of a pit or a cabin cabin per 16 sq.ft sq.ft.. of the base base area with with 30% more more area as worki working ng space. 10. At least 6 feet high barbed-wire fencing shall be provided all rounds at a distance of not less than 30 feet from the storage cabins/pits. Other safety distance shall be maintained as per Schedule VI of the Explosives Rules, 1940. CONDITIONS FOR TRANSPORT OF COMMERCIAL EXPLOSIVES IN A VAN BY ROAD.
1. The vehicle vehicle shall shall be in in perfect perfect servicea serviceable ble condition condition in all respec respects. ts. 2. The words words DANGER DANGER and EXPLOSIVE EXPLOSIVES S shall shall be written written conspicu conspicuous ously ly in Red color color on three sides of the vehicle so as to be clearly visible from a distance and electric lamp with siren shall preferably be fixed on the vehicle for use in emergency. 3. There shall shall be no naked naked iron or or steel in the interio interiorr of vehicle vehicle and no footwear footwear with with exposed exposed iron or steel shall be worn by attendants on the vehicle.
Mohammad Saeed Awan
Mobile # 0323-5252814
23 interior of vehicle vehicle shall be kept kept thorou thoroughl ghly y clean clean from from grit, grit, oil rag, waste waste and other 4. The interior combustible material at all times. 5. All electric electric cables must must be heavily heavily sheeted. sheeted. No junction junction boxes, boxes, switches switches,, fuses, fuses, lamp fittings fittings or other electrical appliances or cable joints shall be allowed within t he cargo compartment. 6. A quick action action cut-off cut-off valve valve shall shall be fitted fitted to the fuel fuel pipe pipe in an accessib accessible le position. position. 7. The driver driver shall shall not be under under the the age of 21 years and and the attendan attendantt shall not not be under under the age age of 18 years. The driver shall hold heavy duty driving licence. 8. Persons Persons incharge incharge of the the vehicle vehicle must be experienced experienced in in the handling handling of explosives explosives.. 9. All persons persons engaged engaged in loading, loading, unloading unloading or conveying conveying explosiv explosives es shall observe observe all necessary necessary precautions for the prevention of accidents by fire or explosion and no unauthorized person shall be allowed to have an access to the vehicle. 10. No person shall shall smoke while driving, driving, attending attending to or working on the vehicle and no matches matches or sources or fire of heat, smoking material shall be carried on the vehicle. 11. Every consignme consignment nt of explosives for transporta transportation tion shall be accompanied accompanied by a license license in Form C and a pass issued by licenses in Form H and attested photo-copies of these documents shall be sent to the Chief Inspector of Explosives, Karachi and to the Inspector of Explosives and District Magistrate in whose jurisdiction the magazine9 in situated. 12. Loading Loading and unloading unloading shall NOT be done in the vehicle vehicle while its engine is running running or its fuel tank is being filled. 13. Explosives in excess of the authorized limit shall shall NOT be carried on the vehicle. 14. Damaged Damaged packages packages shall NOT be loaded loaded in the vehicle. 15. Explosives shall NOT be carried in the Driver Driver s Cabin under under any circumstances. 16. Detonators Detonators or other explosives explosives containing containing their own means of ignition and Fire works shall NOT be loaded together or with any other explosives and must be transported separately. 17. All packages packages must be well well secure secured d and effectiv effectively ely protected protected against against weather weather and the risk of pilferage or sabotage. 18. All packages must be be appropriately labeled as to the nature of Explosives. 19. If loading, loading, unloading unloading takes place place in wet weathe weather, r, adequate adequate stops stops shall shall be taken to keep keep the packages of Explosives dry. 20. The loading loading or unload unloading ing of explos explosive ivess when when once once begun begun shall be procee proceeded ded with all due vigilance until the same has been completed. 21. No extra fuel shall shall be carried during conveyance conveyance other than in the fuel tank of the vehicle. 22. Vehicle shall not be taken taken to any garage garage or repair station while carrying explosives and condition of types, breaks and explosives shall be checked after short breaks during journey. 23. Efficient locking arrangement shall shall be provided at all times. 24. Efficient chemical fire-extinguisher fire-extinguisher of adequate capacity shall shall be carried on the vehicle. vehicle. 25. At least one person (attendant) (attendant) shall accompany accompany the driver and the vehicle containing containing explosives explosives shall not be left unattended except when absolutely necessary. 26. Other vehicle vehicle with its engine running running shall NOT as far as possible be allowed within within fifty feet of the vehicle containing explosives. 27. The vehicle vehicle shall NOT be driven at the speed more than 30 miles (50 Kilometers Kilometers)) an hour on smooth road. 28. Populated Populated areas shall be avoided avoided as far as possible possible and vehicle SHALL NOT be parked in any building during journey. 29. The vehicle shall shall NOT be driven driven in any street or public place within the limits of a municipality municipality or cantonment except and in accordance with the conditions of a written permit granted by the District Authority. 30. Explosives shall shall be delivered to authorize consignee consignee only. 31. In case of any emergency, one person person shall warn other traffic and one one person shall inform police, and the consignor or consignee, as m ay be convenient by the quickest possible means. 32. One copy of the drawing approved by the Department Department of Explosives shall always be kept with the driver of the vehicle for production on demand by an inspecting officer.
Mohammad Saeed Awan
Mobile # 0323-5252814
