Feasibility Report CNG Filling Station

the
Stylish Project book cover page
for CNG filling station installation at
District Pishin Saturday, July 23, 2011

ACKNOWLEDGEMENT
En route to Mr. Rahim Mangel
Institute of Management Sciences University of Balochistan Quetta Group Assignment (session 2009-2011)
By Mohammad Ayaz Khan(E) 15, Waseem Akram (E)11, Mohammad Imran (E)04, Sulaman Shahzad(E) 48
Feasibility Study of installing CNG filling Station at the District Pishin (Group assignment) July 22, 2011
I owe a great many thanks to a great many people who helped and supported me during the writing of this Project. My deepest thanks to my Friends who Guide me of the assignment for guiding and correcting various documents of mine with attention and care I express my thanks to THE FACULTY OF INSTITUTE OF MANAGEMENT SCIENCES UNIVERSITY OF BALUCHISTAN Specially my teacher MR. Rahim Mangel for providing the interactive task.
By Mohammed Ayaz Khan (E) 15,Waseem Akram (E)11 Mohammad Imran(E)4 ,Sulaman Shahzad (E)48 Institute of Management Sciences University of Balochistan Quetta.
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TABLE OF CONTENTS
ACKNOWLEDGEMENT .............................................................................1 TABLE OF CONTENTS .............................................................................3 INTRODUCTION.......................................................................................8 MARKET ANALYSIS.................................................................................8 INTRODUCTION AND PROMOTION OF NEWLY DEVELOPED GAS KITS FOR RICKSHAW IN PISHIN DISTRICT................................................................9 MARKET SUPPLY.....................................................................................9 EXISTING SUPPLY...................................................................................9 MARKET DEMAND...................................................................................9 DEMAND FOR CURRENT CONSUMPTION .................................................10 THE
DEMAND FOR
CNG
FUEL=12900 CUBIC METER/DAY................................................... 10
FUTURE DEMAND..................................................................................10 DEMAND PROJECTIONS

FOR VEHICLES ON
CNG (IN PISHIN DISTRICT)..............................................11
CNG POLICY..........................................................................................11 THE

GOVERNMENT OF
PAKISTAN
HAS OFFERED NUMBER OF INCENTIVES FOR ENCOURAGING THE USE OF
CNG
IN
THE COUNTRY SOME OF THESE ARE SUMMARIZED BELOW:..............................................................11
TECHNICAL ANALYSIS...........................................................................12 MATERIAL

INPUTS:......................................................................................................... 12
LAND:....................................................................................................................... 12 INFRASTRUCTURE:..........................................................................................................13 BUILDING:.................................................................................................................. 13 MACHINERY

AND
EQUIPMENT:............................................................................................14
Gas Compressor.................................................................................................14 Electric control panel ........................................................................................14 Storage cascade ............................................................................................... 14

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Feasibility Study of installing CNG filling Station at the District Pishin (Group assignment) July 22, 2011 Priority panel for Vehicle priority .......................................................................15 CNG Dispenser high flow dual hose .................................................................15 SUPPLIERS..................................................................................................................15 STORES
AND
SPARES......................................................................................................16 FIXTURE..................................................................................................16
FURNITURE
AND
MANPOWER REQUIREMENT................................................................................................16 Human Resource Requirement..........................................................................17 COMPRESSION

PROCESS................................................................................................... 17
ENVIRONMENTAL/ECOLOGICAL..............................................................18 ANALYSIS.............................................................................................18 ECOLOGICAL/ENVIRONMENTAL ANALYSIS.............................................................18 ECONOMIC ANALYSIS............................................................................19 ECONOMIC ANALYSIS.............................................................................................19 Employment Opportunity...................................................................................20 Contribution to GDP...........................................................................................20 Tax benefit......................................................................................................... 20 Foreign exchange.............................................................................................. 20 PROCEDURE FOR OBTAINING THE LECENSE OF.......................................20 CNG STATION....................................................................................20 REGULATION, LICENSES AND INCENTIVES...............................................21 LICENSE.................................................................................................................22 CERTIFICATE (BY HDIP)...........................................................................................22 NOC'S..................................................................................................................... 22 INCENTIVES...........................................................................................................23 Custom duty.......................................................................................................23
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Feasibility Study of installing CNG filling Station at the District Pishin (Group assignment) July 22, 2011 REGULATORY REQUIREMENTS...............................................................................23 Quality certificate...............................................................................................23 List of Equipments.............................................................................................23 Income tax on the import of CNG equipment.....................................................23 Income tax......................................................................................................... 23 ANNEXURE...........................................................................................24 COST
OF THE
PROJECT & FINANCIAL PLAN.............................................................................24
Cost of the Project..............................................................................................24 Financial plan.....................................................................................................24 COST LIST

OF
BUILDING........................................................................................................25 CNG
FILLING STATION.......................................................................25
OF EQUIPMENTS FOR
SALES ESTIMATE (REVENUE).............................................................................................26 SALES

ESTIMATE
(REVENUE): WORKING................................................................................26
REVENUE: WORKING...................................................................................................... 27 COST RATE

OF OF
GOODS SOLD...................................................................................................28 GAS CONSUMED;...............................................................................................29
WAGES
AND SALARIES..................................................................................................... 29 CONSUMED)........................................................................................30
POWER (ELECTRICITY
Fixed charges.....................................................................................................30 Variable charges................................................................................................30 STORES REPAIRS OTHER

AND SPARES.......................................................................................................31 AND MAINTENANCE...............................................................................................31
MANUFACTURING OVERHEAD...................................................................................... 32
DEPRECIATION.............................................................................................................. 32 1. MACHINERY and building...............................................................................32

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2. Furniture and fixture............................................................................................................. 32
GENERAL ADMINISTRATIVE
AND
SELLING EXPENSES....................................................................32
WORKING CAPITAL ESTIMATES......................................................................33 ESTIMATES OF FINANCIAL EXPENSE............................................................34 PROJECTED INCOME STATEMENT...........................................................................34 PROJECTED CASH FLOW STATEMENT....................................................................35 PROJECTED BALANCE SHEET.................................................................................36 Current Assets................................................................................................... 37 Current liabilities................................................................................................37
Long term liabilities................................................................................................................... 37 Equity........................................................................................................................................ 37
BREAK EVEN ANALYSIS..........................................................................................38 RATIO ANALYSIS ..............................................................................................39 Profitability ratio................................................................................................ 39

Gross profit margin = Gross profit / Sales * 100........................................................................ 39 Operating profit margin = Operating profit / Sales * 100...........................................................40 ................................................................................................................................................ 40 Net profit margin = Net profit / Sales * 100............................................................................... 40 Return on equity ratio = Net profit / Equity * 100...................................................................... 40 Return on investment ratio = Net profit / Investment * 100...................................................... 40
NET PRESENT VALUE (NPV)............................................................................................41 PROFITABILITY INDEX......................................................................................................41 PAYBACK PERIOD WITHOUT DISCOUNTING...........................................................42 PAYBACK PERIOD WITH DISCOUNTING..................................................................42 REFERENCES .......................................................................................44 INDEXES ..............................................................................................45
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EXECUTIVE SUMMARY
he people of Pishin district belongs mainly to low income/ earning society which cannot afford high price petroleum product thats why CNG is a cheaper source of fuel for them.
Natural gas is a natural resource of energy, commonly used in residential, commercial and industrial sector. It is one of the most valuable natural resources abundantly available in our country. Compressed Natural Gas (CNG) is produced when the natural gas is compressed into cylinders to be used as a fuel in the automobiles Due to the efforts made by the Government and comparatively low prices of gas, more then 2000000 have already been converted to operate on Compressed Natural Gas (CNG) fueling system all over Pakistan .there are more then, 2941 CNG station operating in the country and there is a need to set up more CNG station to meet the growing demand for it. As a part of its policy government has made great efforts to promote the use of CNG in Pishin District as well. At present, there is no CNG station in Pishin district. There are about more then 200vehicles, which have been converted to CNG fueling system in Pishin District, and a large number of vehicles are being converted these vehicle. It has been projected that the total number of CNG fuel vehicles will be increased up to 1000 by the end of next five years. The demand for CNG fuel=12900 cubic meter/day The project will cost about 15,270000 in winch an amount of 4,000,000 rupees at the rate of Rs.500 per square feet lease payment has been paid for land, the total cost of construction of the building is estimated at Rs 3,631000, and installation of the machinery will cost 9,710000, furniture
and fixture cost 391000, and an amount of 2462000 of subsidy.
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INTRODUCTION
atural gas is a natural resource of energy, commonly used in residential, commercial and industrial sector. It is one of the most valuable natural resources abundantly available in our
country. Compressed Natural Gas (CNG) is produced when the natural gas is compressed into cylinders to be used as a fuel in the automobiles CNG-powered vehicles uses natural gas the same fuel that is used by stoves, water heaters and clothes dryersstored in cylinders at pressures of 2,000 to 3,500 pounds per square inch CNG has been used as an automobile fuel since 1940, and over the years, the technology has been modified and refined. In the recent years, the usage if CNG as an automobile fuel has significantly increased because of its low cost and environment friendly nature. The people of Pakistan have been using the petroleum as fuel in their automobiles, thus spending a large amount of foreign exchange on import of petroleum products. Because there are abandoned supplies of natural gas in Pakistan, using natural gas to replace gasoline helps reduce our countrys dependency on foreign petroleum. In Pakistan, hydrocarbon development institute of Pakistan (HDIP) first established the use of CNG as an automobile fuel in 1982. the market of this type of fuel, which is commonly available at much cheaper price, is increasing because of continuous increase in petroleum prices. At present, about 270 CNG station are operational in different parts of the country to cater to the needs of the consumers.
MARKET ANALYSIS
One of the elements of Government petroleum policy is the commercial application of CNG technology .It is reflected in the efforts made by the government for the installation of CNG station and converting vehicles on CNG fueling system .Due to the efforts made by the Government and
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Feasibility Study of installing CNG filling Station at the District Pishin (Group assignment) July 22, 2011 comparatively low prices of gas, more then 2000000 have already been converted to operate on Compressed Natural Gas (CNG)fueling system all over Pakistan .there are more then ,2941 CNG station operating in the country and there is a need to set up more CNG station to meet the growing demand for it. As a part of its policy government has made great efforts to promote the use of CNG in Pishin District as well.
INTRODUCTION AND PROMOTION OF NEWLY DEVELOPED GAS KITS FOR RICKSHAW IN PISHIN DISTRICT
TaraqeeTrust of Pishin District has undertaken to reduce green house emission leading to global warning by introducing 40 CNG gas kits in two stroke rickshaws in Pishin District city through the provision of credit to the rickshaws owner. The key stakeholders in this project are Rickshaw Drivers Association, Pakistan Hydrocarbon Institute, Canadian International Development Agency and Balochistan EPA.
MARKET SUPPLY EXISTING SUPPLY

At present, there is no CNG station in Pishin district.
MARKET DEMAND
The people of Pishin district belongs mainly to low income/ earning society which cannot afford high price petroleum product thats why CNG is a cheaper source of fuel for them. There are about more then 200vehicles, which have been converted to CNG fueling system in Pishin District, and a large number of vehicles are being converted these vehicle. It has been projected that the total number of CNG fuel vehicles will be increased up to 1000 by the end of next five years. Due to the increasing prices of petroleum products, the trend of converting cars to CNG fueling system has been on a raise. The government of Pakistan has taken certain concrete steps in order to
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Feasibility Study of installing CNG filling Station at the District Pishin (Group assignment) July 22, 2011 promote the use of natural gas as a fuel substitute in the automobiles. There are kits available in the market through which a petrol car can easily be converted into CNG fueling system. However, there were a large number of people who were reluctant to convert their vehicles from petrol to gas due to safety concerns. Recently, many car manufactures have started manufacturing the cars with built-in CNG fueling system, e.g., Suzuki car manufacturing company. This change has led to enhancing the confidence of the general public regarding the safety concerns, and now, more people are towards purchasing these factory fitted CNG fueling system cars. Considering the market trend and number of vehicles being converted into CNG fueling system there is exist an opportunity for the new entrants to earn profits fueling by setting up new filling station to meet the growing demand.
DEMAND FOR CURRENT CONSUMPTION

THE DEMAND FOR CNG FUEL=12900 CUBIC METER/DAY Its quite clear that there is demand of about 12900 cubic meter /day on average. But this is not the end, there is an increasing trend of CNG fueling system, the demand for this type of fuel will be increased by 300% within next five years and hence there a great opportunity for the new entrants to earn profits by setting up new CNG filling station t meet the growing demand.
FUTURE DEMAND
The main factors for the rise in the demand for CNG fuel are 1) Increase in the prices of petroleum 2) Government support and policies 3) Promotion of vehicles with built in CNG fueling system
Based on the above criteria the Demand projecti0ns are given in the following table:
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DEMAND PROJECTIONS FOR VEHICLES ON CNG (IN PISHIN DISTRICT)

Year 1 2 3 4 5 Number of Vehicles on CNG 1000 1600 2300 3100 4000 Percentage Increase
60% 70% 80% 90%
The above-mentioned table indicates that the demand for CNG fuel is fast increasing .The industry is growing and there is opportunity for the new entrants to setup new CNG station to meet the growing demand.
CNG POLICY
THE GOVERNMENT OF PAKISTAN HAS OFFERED NUMBER OF INCENTIVES FOR ENCOURAGING THE USE OF CNG IN THE COUNTRY SOME OF THESE ARE SUMMARIZED BELOW:
Strong Government commitment to promote usage of CNG Liberal policy of providing for CNG retailing Deregulated market price of CNG (for the consumers) Priority of providing natural gas connection to CNG station Relaxation of import duty and sales tax on import of machinery and equipment ,CNG kits cylinders This has provided a boost to the industry, and so far, more then 2000000 vehicles have been converted to CNG and 2941 CNG stations are operational. Another 320 stations are under construction in different parts of the country .According to inter national Associations for Natural Gas Vehicles (IANGV) statistics Pakistan is ranked third in the CNG using countries after Argentina and Italy.
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TECHNICAL ANALYSIS All the prerequisites for successful commissioning of the project is available in the city:
In this section it will be clarified and justified that all the prerequisites required for the successful commissioning of the project regarding Raw material, Infrastructure, Land, Building, Equipment, Personnel, etc are available in the city.
MATERIAL INPUTS:
There are two main inputs required for CNG filling station, one is natural gas and other is electricity. We are required to obtain both in the connections from the relevant authorities i.e. WAPDA and sui southern gas company (SSGC). According too the governments policy CNG filling stations will be given the priority of providing natural gas connection.CNG ranks relatively high in convenience and availability. Pishin Districts extensive network of natural gas pipelines can deliver the fuel directly to many sites where compressors are installed by the local utility.
LAND:
The minimum land requirements for installing CNG filling station is from 6000 to 9000 square feet. It must have at least 75 feet front opening. In case of our project we have already acquired land for the purpose of installing CNG filling station on lease from the 12th crop. The covered area of the land acquired is 8000 square feet, which will be having 75 square feet front opening. An amount of 4,000,000 rupees at the rate of Rs.500 per square feet lease payment has been paid to the private property.
SITE SELECTION :
The site selected for the filling station is opposite to the district law curt Pishin at the Band road Pishin. The covered area of the acquired land as stated earlier is 8000 square feet. The site offers an ideal location for the filling station; as it is a commercial area and the residents of the whole city will have a very easy access to the station.
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INFRASTRUCTURE:
The project highly depends upon the availability of the infrastructure facilities; because the material inputs required as mentioned earlier are, natural gas and electricity. The site chosen for setting up the CNG Fuel station enjoys infrastructure facilities and possesses all the pre-requisites for the smooth operation of the Project i.e. Water, Power, road etc.
BUILDING:
There are certain civil works required to be carried out at the proposed location. The civil works would be carried out on an area of 2250 square feet. The rest of the area will be floored with tuff tiles. Civil work includes the following:
1.
Office Control Room Compressor and Cascade/Cylinder Storage Room Shed for Dispenser Toilet/Washroom Underground Gas Piping Flooring
The total cost of construction is estimated at Rs 1.5 million. Details for the said cost are as follows: Construction cost (Amount in Rupees)
Description Office with washroom Control room Compressor & Cylinder storage room Shed Underground
Type of Construction RCC RCC RCC Canopy _
Covered Area(sq. ft) 436 144 1400
Cost per Sq.ft. (Rs.) 475 475 475 Lump sum -
Cost(Rs.) 207,100 68,400 665,000 200,000 300,000
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gas piping Flooring Contingencies Total cost
_ _
About 6,000 _
50 _
300,000 90,000 3,630,500
Explosive department has laid down certain specifications for the compressor and cascade/cylinders storage room, which are as follows: 1. Minimum one-meter distance is required between wall and Compressor. 2. Minimum distance of one meter should be kept between Compressor and Cascade/cylinders.
3. Fire related walls (with RCC structure) must be used in the compressor and Cylinders
storage room.
4. Roof of the compressor and storage room should not be of permanent nature. Corrugated
asbestos might be used to prevent the compressor and Cylinders from heat. MACHINERY AND EQUIPMENT:
The following equipment is required for a CNG filling station:
GAS COMPRESSOR
The purpose of compressor is to compress the gas enabling it to discharge the gas for refueling. This compressor requires an input pressure of 10 PSIG (pounds per square inch gauge) from the main gas supply with the outlet pressure of 3,600 PSIG. With this discharge pressure, the equipment can refuel 50 vehicles per hour.
ELECTRIC CONTROL PANEL

Electric control panel is required to operate the gas compressor. This panel will be mounted in the control room.
STORAGE CASCADE
Storage cascade/cylinders are used to store the natural gas.
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PRIORITY PANEL FOR VEHICLE PRIORITY

During rush hours, the compressor is directly connected to the dispenser, by passing the storage cascade/cylinders with the help of priority panel, facilitating the refueling of vehicles at a faster rate.
CNG DISPENSER HIGH FLOW DUAL HOSE

Gas is filled in to the vehicles with the help of dispenser. This dual hose dispenser is capable of handling two vehicles at a time. ALL the CNG filling station equipment is foreign manufactured and imported on the specific requirement of the sponsor by the authorized agent. At present the countries that manufacture CNG filling station equipment rate, New Zealand, Italy, Canada and England. We have selected a Canadian origin compressor viz, Gemini Compressor H302, Jordaire Model J-H320 295-100E. This equipment is selected because of its low electricity consumption and higher outlet pressure. The total capacity of the selected equipment is 424m3/hr with a total power load of 200 KW.
The equipment will be delivered within 12 to16 weeks from the receipt of purchase order and initial payment. The details of this equipment and accessories are available in Annexure 1.2.
SUPPLIERS The central board of revenue (CBR) has specified the list of compressors, storage cylinders vehicle cylinders, CNG machinery & equipment and conversion kits in SRO 38(1)/98. In the case of our project the order for the machinery will be placed to the supplier at Lahore, which will b supplied to us from Karachi port directly to our destination. The list of some local agents dealing in the specific equipment and machinery is given below:
Suppliers name National Engineers Correct Xpress (Pvt) Ltd. ARM Gas Address 90-Bank Square Market, Model Town, Lahore. Suite # 14, 2nd Floor, Resham plaza, Chandni Chowk, Rawalpindi P.O.Box 114 Contact No. Phone: 042-583353, 5837026 Fax: 042-5839369 nlenger@lhr.comsats.net.pk Phone: 051-4844189 Fax: 051-4410872 correct@isb.compol.com Phone: 042-6366950-51,
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Feasibility Study of installing CNG filling Station at the District Pishin (Group assignment) July 22, 2011 Ventures Hurricane Compressors Techno men Gas Ventures (Pvt) Ltd. Rix Pakistan (Pvt) Ltd. Rasul Building 60 Sharah-e-Quaid-e-Azam, Lahore 8 Hong Kong Plaza, Satellite Town, Rawalpindi. H # 3B, St # 16, F-8/3, Islamabad 37-A, Chaklala Scheme 2, Tipu Road, Rawalpindi. 6366948 Fax: 042-6369756, 6361142 albario@brain.net.pk Phone: 051-4840078 Fax: 051-4427426 Techcentric_pk@yahoo.com Phone: 051-2856996-8 Fax: 051-2856995 T_gasventures@usa.net Phone: 051-5591160 Fax: 051-5504414 rix@rixpakistan.com
STORES AND SPARES The whole equipment required for setting up a CNG filling station is imported. Therefore, it is required to build an inventory of necessary spare parts to meet the unforeseen circumstances such as breakdown or any other fault in any part or equipment. For this purpose, a stock of necessary spare parts worth $8,000, which is equivalent to 484,000 rupees will be imported along with other equipment to maintain a minimum level of spare parts for the 1st year of operation. FURNITURE AND FIXTURE Furniture and fixtures mainly include tables, chairs, sofas, fans & lights, carpe, curtains and fire extinguishers. It is estimated that the furniture and fixture of Rs.85, 000 would be purchased. Some office equipment is also required for the proposed project. A provision of Rs. 100,000 has been made for acquiring the required office equipment. The details of office equipment are annexed in Annexure______________ MANPOWER REQUIREMENT Manpower requirement for the CNG filling station includes manager, cashier, dispenser, operators, accountant, watchman and sweeper. There is not at all any problem to get the required staff, with the specific requirements, from the area. The total staff strength would be 15 persons for the two shifts. The basic salaries of the staff year one are as follows:
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HUMAN RESOURCE REQUIREMENT
Designation
No. Of Employees for two shifts 1 1 2 4 2 1 1 2 1 15
Basic Salary per month (Rs.) 10,000 7,000 4,000 2,000 2,500 3,000 2,000 2,000 1,500
Total salary per year (Rs.) 120,000 84,000 96,000 96,000 60,000 36,000 24,000 48,000 18,000 582,000
Manager Accountant Cashier Dispenser Operators Mechanic Helper Watchman Sweeper Total
The details of the Wages and Salaries for the first five years that includes increments and fringe benefits for are given Annexure # 3.2 COMPRESSION PROCESS Natural gas is a natural resource of energy, commonly used in residential, commercial and industrial sector. It is one of the most valuable natural resources abundantly available in our country. Compressed natural gas is produced when the natural gas is compressed into cylinders to be used as a fuel in the automobiles. The compression process of CNG at CNG station is a multi steps process, it compress the natural gas to 3600 per square inches (PSI) from 8 PSI.
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The machinery, which is used, for the compression of the natural gas is fully automatic and has two main parts/ compressor.
1. Screw compressor 2. Main compressor
The screw compressor, compress the natural gas to 75 PSI from 8 PSI. for screw compressor to work or to start compression minimum pressure of 8 PSI is require, which is provided by the main gas pipeline by the supplies of GAS (SSGC). After the gas is compressed to 75 PSI than it is send to radiator for cooling and than to filter for the filtering. After the filtering the compressed gas is transfer to the main compressor. The main compressor is consisted of four sub compressor which compress the gas at different PSI. the first sub compressor of the main compressor receive the compressed gas at 75 PSI form the screw compressor it compress this 75 PSI to 220 PSI and than transfer it the next sub compressor which compress this 220 PSI to 480 PSI, this than transfer to the next sub compressor which compress it to 1200 PSI, which is transfer to next compressor which compress it to 3600 PSI. This compressed gas of 3600 PSI is than send to radiator for cooling and than to filter for filtering before storage. After the cooling and filtering the compressed gas is transfer to the storage cylinders from where is filled in the automobiles. Automobiles are filled at 2900 PSI when the presser of stored gas decline and reach to 2900 PSI the machine or compressor starts automatically again and the entire process is repeated again and when presser reaches to 3600 PSI than it stop automatically again.
ENVIRONMENTAL/ECOLOGICAL ANALYSIS
ECOLOGICAL/ENVIRONMENTAL ANALYSIS CNG is not hazardous to the environment as is the case with the traditional petroleum fuel. It is highly of environment friendly nature. This is one of the main reasons that its demand is continuously increasing and the Government is supporting it.
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Due to the environment friendly and low cost of natural gas, Hydrocarbon Development Institute of Pakistan (HDIP) has recognized the need and necessity to promote the use of CNG as a fuel in automobiles. Pishin city is one the most polluted cities of the country, it is almost because of the unburned carbon practices in the atmosphere that is discharge as a result of the combustion process of the petroleum products inside the vehicles. CNG is highly composed of methane gas (i-e 90%) which is a non flammable gas and thus does not discharge unburned carbon in the atmosphere. The promotion of the CNG fueling projects will be a step towards the fight against pollution.
ECONOMIC ANALYSIS
ECONOMIC ANALYSIS Natural gas is one of the most valuable natural resources abundantly available in our country. With promotion of CNG fuel industry the dependency of the government on petroleum products will be decreased. It will be a great support to the Pakistans economy, as it will help to minimize the impact of petroleum products. Hydrocarbon development institute of Pakistan has pioneered the use of environment friendly CNG in road transport as an economically viable fuel, which can substitute the imported petroleum products. Moreover with the petroleum of less costly fuel the people will start switching from use of Iranian petrol towards the CNG.as the demand of Iranian petrol has decreased the trend of smuggling and illegally supplying Iranian petrol will be reduced and hence the economic burden is relaxed from that aspect too. With the start of this project our economy will be supported in a number of ways, a few of them are discussed as under.
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EMPLOYMENT OPPORTUNITY The project will provide employment opportunity to the people of Pishin District city, as it needs a number of people to work for it, from the construction to the successful operation of the business. CONTRIBUTION TO GDP The input materials, natural gas and electricity, will be utilized and will be converted to the compressed natural gas. The value added to the input materials will be an addition to the GDP of Pakistan. TAX BENEFIT The proposed project will benefit the government of Pakistan in the form of a number of tax collections, such as, tax imposed on the income of a business, on the income of the employees on the import of the CNG equipment, etc. FOREIGN EXCHANGE The people of Pakistan have been using the petroleum products such as fuel in their automobiles, thus spending a huge amount of foreign exchange on import of petroleum products. The proposed project will help to reduce our countrys dependence on foreign petroleum. Because there are abundant supplies of natural gas in Pakistan, using natural gas to replace gasoline will be more economic to the country and will help us to save foreign exchange.
PROCEDURE FOR OBTAINING THE LECENSE OF CNG STATION

Three copies of prescribed application forms should be submitted with the following documents. Application forms are available free of cost
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1. Status of applicant/applicants:-individual/joint ventures/registered company 2. In case of joint venture an attested copy of the document by the notary public or attested copy of registration certificate in case of registered company. 3. Attested copy/copies of applicant/applicants ID card. 4. Local proof of ownership pf proposed land for CNG station. 5. Bank statement of the applicant clearly expressing financial stability for setting up CNG station. 6. copy/copies of applicant/applicants national tax No certificate. 7. Proposed site plan of CNG station 8. Map of concerned area/city identifying the proposed site of the CNG station located in area. 9. Details of education, training and experience of the proposed technical staff. 10. Details of proposed security measures. 11. original bank receipts showing deposit of fee rs 25000 on prescribed form in favor of the Federal ministry of petroleum and natural resources. 12. The authority letter of the person authorized for correspondence side office. 13. NOC from the concerned marketing company, if the cng station is proposed to setup at petrol pumps otherwise a certificate that the station is not being set up for petrol pump. Contact director or director general in case of non issuance of license after submission of complete application in 15 days. For further information contact deputy director CNG.
REGULATION, LICENSES AND INCENTIVES
In this section a list of the licenses and NOC's that are required for the CNG filling station are given. It has been applied for Land is expected to be granted by the concerned authorities.
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LICENSE Obtaining a license from ministry of petroleum and natural resources is a ore requisite for setting up a CNG station. The cost associated with license is Rs 25000. CERTIFICATE (BY HDIP) After the installation of the required equipment for CNG filling station, HDIP will inspect the working of the equipment, and once satisfier, will issue a certificate verifying that the installed equipment is up to the required standard. Cost associated with this certification is Rs. 35000. NOC'S No objection certificate will be required from the following departments prior to the commencement of business. 1. concerned development authority of the city 2. Traffic engineering and planning authority (TEPA) 3. Traffic police (SSP) 4. Department of civil defense. 5. National highway authority (NHA) 6. Central board of revenue (CBR) 7. Civil administration tehsil municipal administration (TMA) 8. Irrigation department 9. Forest department 10. Explosive department
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INCENTIVES Sales tax The import of CNG equipment is exempt from sales tax vide SRO No.38(1)/98 dated 21st January till October 31,2002 CUSTOM DUTY The CNG equipment is also exempted from custom duties as per the above referred SRO. REGULATORY REQUIREMENTS QUALITY CERTIFICATE SRO 38(1) dated 21st January 1998 has been amended on April 11, 2002 and the quality certificate from original manufacture has been mandatory. This certificate should state that the equipment meets the safety standard as laid down in Pakistan CNG rule 1992. The designated third party inspectors witness this quality certificate .the cost of third party inspection is $500. LIST OF EQUIPMENTS The list of equipment and their various manufacturers has been mentioned in the same amended SRO whose import is exempted from custom duty and sales tax. INCOME TAX ON THE IMPORT OF CNG EQUIPMENT Income tax, at rate of 6% is payable by the importer on the import of CNG equipment. INCOME TAX The income of the CNG station is not exempted from the income tax. The investor has to pay tax on her/his income according to the nature of the business entity.
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ANNEXURE
Annexure 1 COST OF THE PROJECT & FINANCIAL PLAN COST OF THE PROJECT
(Rs in 000)
Cost already met Land (including development registration cost) Building/civil work Contingencies Total cost of building Plant and Machinery (with Installation) Loading/unloading charges Total cost of machinery Furniture and Fixture Pre-operating expenses (3%) Total cost of furniture and fixture Total fixed cost Net working capital Total cost of the project 4,000 4,000 4,000
Cost to bet met 3,541 90 3,631 9,680 30 9,710 100 291 391 13,732 1,538 15,270
Total cost on completion 4,000 3,541 90 3,631 9,680 30 9,710 100 291 391 13,732 1,538 15,270
FINANCIAL PLAN The above cost of the project is proposed to be financed as below: Fixed cost Already met To be met Net working capital Total Means/source s
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Long term finance Equity Total Annexure 1.1 COST OF BUILDING Description Office with washrooms Control room Compressor & Cylinder storage room Shed (90*40) Underground gas piping Flooring Contingencies Total cost Annexure 1.2 LIST OF EQUIPMENTS FOR CNG FILLING STATION Description H302 Jodair Natural Gas Comressor Remote mounted electrical control Gas cover system For upgrading up to 424 m3 One bank two line priority panel for buffer direct vehicle filling Storage cascade, 28 cylinders single bank cascade US $ 105,900 Included Included 2,652 10,800 Rs. 6,406,950 included included 158,813 653,400 Type of construction RCC RCC RCC Canopy About 6,000 Covered Area (sq.ft) 436 144 1400 Cost per sq.ft (Rs.) 475 475 475 Lump sum 50 Cost (Rs.) 207,100 68,400 665,000 2,000,000 300,000 300,000 90,000 3,630,500 4,000 4,000 4,022 13,732 1,538 1,538 9,560 19,270 9,710 9,710
23
Dispenser (D38 High flow dual hose two line sequencing) Income tax on the import of Machinery @6% Third party inspection Inland freight (Karachi port to destination) Total Cost of Machinery
28,140 500 150,965
1,702,470 9,103,133 546,188 30,250 30,000 9,709,570
Annexure 2 SALES ESTIMATE (REVENUE)
Revenue
Quantity of gas sale per Vehicle: 12.9 m3 ( i.e., Quantity demanded per vehicle on average Annual increase in the sales price of Gas: Year of operation Capacity utilization Car wise capacity (# of cars filled/year) (000) Selling pric (Rs. Per vehicle) Sales value 2.5% Year 1 75% 142 226 30,290 Year 2 80% 151 232 35,032 Year 3 85% 161 237 38,157 Year 4 90% 170 243 41,310 Year 5 95% 180 249 44,820
Annexure 2.1 SALES ESTIMATE (REVENUE): WORKING
Total capacity
=424m3/hour =2,442,240m3/year
23
(Based on 16 hour working day and 360 days per annum)
The capacity of one cylinder on average = 12.9m3
Car wise capacity can be calculated as Car wise capacity = 2, 442,240/12.9 = 189,231 (say 189,000) at 100% capacity It means that 189 thousand cars will be filled per year if the project runs at its full capacity. As the project cannot take a start from a 100% capacity therefore the capacity of the first year after having made a thorough analysis and visited the existing CNG station is projected as to be 75%. There will be a gradual increase in the capacity utilization of the proposed project. The current rate or sales price pf the CNG fuel is Rs.17.51 (GST included) Considering the inflation rate and market condition it is projected that there will be an increase of 2.5% annually in the price of CNG fuel, so the projected prices of CNG for the first five years are as follows: REVENUE: WORKING Year of operation Capacity utilization Prices of CNG Car wise capacity (# of cars filled/year) No of vehicles filled/day Year1 75% 17.51 142,00 0 394 Year 2 80% 17.95 151,00 0 420 Year 3 85% 18.39 161,00 0 446 Year 4 90% 18.86 170,00 0 472 Year 5 95% 19.33 180,00 0 499
Annexure 3
23
COST OF GOODS SOLD Consumption of Gas per vehicle Rate of Gas Rate of Electricity: fixed: Variable: 12.9 Cubic Meter Rs 7.35/cubic Meter Rs.381.11/kw/month Rs. 5.25/kw/month
Annual increase in the prices of Gas
5% (Rs. In 000)
Year of operation Capacity utilization Gas consumed (in Rs.) Wages & Salaries Factory overheads Power (electricity consumed) Stores and spares Repairs and Maintenance Depreciation Other Manufacturing overheads Total factory overheads Total Cost of Goods sold
Year 1 75% 13,465 781
Year 2 80% 15,202 820
Year 3 85% 16,546 861
Year 4 90% 17,884 904
Year 5 95% 19,428 9494
4,088 484 133 631 321 6,388 20,634
4,315 514 200 631 350 6,777 22,799
4,542 545 267 631 322 7,112 24,519
4,768 575 267 631 413 7,500 26,288
4,995 605 267 631 448 7,834 28,211
Annexure 3.1
23
RATE OF GAS CONSUMED; (Rs in 000) Year of operation Capacity utilization Car wise capacity (000) Gas consumed (in m3) Rate of Gas/m3 Gas consumed (in Rs) Year 1 75% 142 1,832 7.35 13,465 Year 2 80% 151 1,954 7.72 15,202 Year 3 85% 161 2,076 8.11 16,546 Year 4 90% 179 2,198 8.52 17,884 Year 5 95% 180 2,320 8.95 19,428
1. Gas consumed = total capacity * capacity utilization * rate Annexure 3.2 WAGES AND SALARIES Designation Manager Accountant Cashier Dispenser Operator Mechanic Helper Watchman Sweeper Total No of employees for two shifts 1 1 2 4 2 1 1 2 1 15 Salary per month (Rs) 9,000 6,000 4,000 2,000 2,500 3,000 2,000 2,000 1,500 Total salary per year 108,000 72,000 96,000 96,000 60,000 36,000 24,000 48,000 18,000 558,000 i.e., 558 (Rs in 000) Year of operation 1st year 2nd year 3rd year 4th year 5th
23
Basic salary Increments @ 5% Total basic salary Fringe benefits @40% Total wages and salary
558 558 223 781
558 28 586 234 820
586 29 615 246 861
615 31 646 258 904
year 646 32 678 271 949
Annexure 3.3 POWER (ELECTRICITY CONSUMED) Connected load = 150kw FIXED CHARGES Rate Charges = Rs.381.11/kw/month = 381.11*150 =57,176 per month 57,176*12= 685,998 per year (i.e. 686)
VARIABLE CHARGES Rate Charges =5.25/kw/hour =5.25*150*16*360 =4,536,000 (i.e., 4,536) at 100% capacit Year of operation Year 1 Year 2 Year 3 (Rs. In 000) Year 4 Year 5
23
Capacity utilization Fixed cost Variable cost Total cost Annexure 3.4
75% 686 3,402 4,088
80% 686 3,629 4,315
85% 686 3,856 4,542
90% 686 4,082 4,768
95% 686 4,309 4,995
STORES AND SPARES The whole equipment required for setting up CNG filling station is imported. Therefore, it is required to build an inventory of necessary spare parts to meet the unforeseen circumstances such as a breakdown or any other fault in any part or equipment. For the purpose, a stock of necessary spare parts worth $8,000 which is equivalent to 484,000 rupees will be imported along with other equipment to maintain a minimum level of spare parts for the 1st year of operation. The amount of stores and spaces for the next four years as per requirement are shown below: Current dollar exchange rate = 60.5 rupees (Rs. And $ in 000) Year 4 Year 5 90% 9.5 575 95% 10 605
Year of operation Capacity utilization Stores and spares ( in $) (in Rs) Annexure 3.5
Year 1 75% 8 484
Year 2 80% 8.5 514
Year 3 85% 9 542
REPAIRS AND MAINTENANCE Year of operation Machinery (9,710) Building (3,631) Year 1 1% 97 36 133 Year 2 1.5% 146 54 200 Year 3 2% 194 73 267 (Rs. In 000) Year 4 Year 5 2% 194 73 267 2% 194 73 267
23
OTHER MANUFACTURING OVERHEAD Other manufacturing overhead are estimated to be equal to 1% of sales. Year of operation Sales values Year 1 32,092 321 Year 2 35,032 350 Year 3 38,157 322 (Rs. In 000) Year 4 Year 5 41,310 413 44,820 448
Annexure 3.6 DEPRECIATION 1. MACHINERY AND BUILDING (Rs.in 000)
2. FURNITURE AND FIXTURE
(Rs. In 000) Machinery Building and Furniture fixture Total Cost Cost 9,710 3,631 100 Estimated life Estimated life 20 yrs 25 yrs 10 yrs Rate Rate 5% 4% 10% amount Amount 486 145 10 631
Annexure 4 GENERAL ADMINISTRATIVE AND SELLING EXPENSES (Rs. In 000) Year 4 Year 5 25 30
Year of operation Printing and stationary
Year 1 20
Year 2 20
Year 3 25
23
Postage and telegram Insurance Travelling expenses Depreciation(Furniture & fixture)* Telephone expenses Total
15 10 10 10 50 115
20 10 10 10 50 120
20 10 15 10 55 135
25 10 15 10 55 140
25 10 20 10 60 155
*refer to annexure 3.6 WORKING CAPITAL ESTIMATES
Tied up period Capacity utilization CURRENT ASSETS Cash Raw Material Stores and Spares Debtors 30 Lump sum 30 days
Year 1 75%
Year 2 80%
Year 3 85%
Year 4 90%
Year 5 95%
30 1200 __ 2674 3904
30 1200 __ 2919 4149
40 1200 __ 3180 4420
40 1200 __ 3443 4683
50 1200 __ 3735 4985
CURRENT LIABILITIES Creditors (30% of raw material) Accruals 360 1605 360 1752 360 1908 360 2066 360 2241
23
(5% of sales)
GST payable
30
401
438
477
516
560
2366 Net working capital 1538
2550 1599
2745 1675
2942 1741
3171 1817
ESTIMATES OF FINANCIAL EXPENSE (Rs. in 000) Year of operation Mark up on long term financial assistance Mark up on short term financial assistance Year 1 Year 2 Year 3 Year 4 Year 5
715
715
715
715
715
----
----
----
----
----
Total
715
715
715
715
715
PROJECTED INCOME STATEMENT (Rs. in 000) Year of operation Year 1 Year 2 Year 3 Year 4 Year 5
23
Sales Cost of good sold Gross Profit General admin & selling expense Operating profit Financial expenses Net profit before taxes (EBT) Income tax ( @ 15%) Net operating profit after tax Withdrawals Retained earnings
32,092 20,634 11,458 115 11,343 715 10,628 1,594 9,034 100 8,934
25,132 22,799 12,233 120 12,113 715 11,398 1,710 9,688 100 9,588
38,157 24,519 13,638 135 13,503 715 12,788 1,918 10,870 100 10,770
41,310 26,288 15,022 140 14,882 715 14,167 2,125 12,042 100 11,942
44,820 28,211 16,609 155 16,454 715 15,739 2,361 13,378 100 13,278
PROJECTED CASH FLOW STATEMENT (Rs. in 000) Year 4 Year 5
Year of operation Sources of funds Operating profit Add: depreciation
End up const period
Year 1
Year 2
Year 3
-------
11,343 641
12,113 641
13,503 641
14,882 641
16,454 641
23
Total funds from operation Owners capital Long term financial assistance Short term borrowings Increase in creditors
---9,560 9,710 ------19,270
11,984 ---------360 12,344
12,754 ------------12,754
14,144 ------------14,144
15,523 ------------15,523
17,095 ------------17,095
Application of funds Investment in fixed assets Payment of long term financial assistance With drawls Increase in current assets Tax payments Total funds Cash surplus Cash at the beginning of the year Cash at the end of the year 17,732 ------------17,732 1,538 ---1,538 ---1,686 ---3,904 1,594 7,184 5,160 1,538 6,698 ---1,686 100 245 1,710 3,741 9,013 6,698 15,711 ---1,686 100 271 1,918 3,975 10,169 15,711 25,880 ---1,686 100 263 2,125 4,174 11,349 25,880 37,229 ---1,686 100 305 2,361 4,452 12,643 37,229 49,872
PROJECTED BALANCE SHEET (Rs. in 000)
23
Year of operation
End up const period
Year 1
Year 2
Year 3
Year 4
Year 5
Assets CURRENT ASSETS Cash Stock Stores and Spares Debtors Total current assets Net fixed assets Total assets 1,538 ---------1,538 17,732 19,270 6,698 1,200 ---2,674 10,572 17,121 27,693 15,711 1,200 ---2,919 19,830 16,480 36,310 25,880 1,200 ---3,180 30,260 15,849 46,109 37,229 1,200 ---3,443 41,872 15,208 57,080 49,872 1,200 ---3,735 54,807 14,580 69,387
Liabilities CURRENT LIABILITIES With drawls Creditors With drawls Total current Liabilities Long term financial assistance Less mark up on long term financial assistance Total long term liabilities ------------100 360 ---460 100 360 100 460 100 360 100 460 100 360 100 460 100 360 100 460
LONG TERM LIABILITIES
16,860
15,174
13,488
11,802
10,116
8,430
7,150 9,710
6,435 8,739
5,720 7,768
EQUITY
5,005 6,797
4,290 5,826
3,575 4,855
23
Equity Retained earnings Total equity Equity + Liability
9,560 ---9,569 19,270
9,560 8,934 18,494 27,693
9,560 18,522 28,082 36,310
9,560 29,292 38,852 46.109
9,560 41,234 50,794 57,080
9,560 54,512 64,072 69,387
BREAK EVEN ANALYSIS (Rs. in 000) Operational year 5 Distribution Ratio
Variable Raw Material Wages and Salaries Depreciation (Building & Machinery) Power Repairs and Maintenance Stores and Spares Manufacturing overheads Amortization General & Admin expenses 19428 474 ---1998 134 605 224 ---77 22940
Fixed ---475 631 2997 133 ---224 1686 78 6224
Total 19428 949 631 4995 267 605 448 1686 155 29164
Fixed 0% 50% 100% 60% 50% 0% 50% 100% 50%
Variable 100% 50% 0% 40% 50% 100% 50% 0% 50%
Total fixed cost = 6224

23
Variable cost
= 22940
Break even in rupees = Fixed cost / (Selling value variable cost / selling value) = 6224 / (44820 22940 / 44820) = 6224 * (44820 / 21880) = 6224 * 2.05 = 12759
Break even in Units = Fixed cost / Contribution margin = 6224 / 9.43 = 660 Margin of safety = Sale at 100% capacity = 472085
Capacity utilization to achieve break even = Break even in rupees / Sale at 100% = 12759 / 472085 = 3% Margin of safety = 100 3 = 97% RATIO ANALYSIS PROFITABILITY RATIO
GROSS PROFIT MARGIN = GROSS PROFIT / SALES * 100
Year 1
Year 2
Year 3
Year 4
Year5
23
11458 / 32092 = 35.70%
12233 / 35032 13638 / 38157 15022 / 41310 34.92% 35.74% 36.36%
16609 / 44820 37.06%
OPERATING PROFIT MARGIN = OPERATING PROFIT / SALES * 100
Year 1
Year 2
Year 3
Year 4
Year5
11343 / 32092 = 35.35%
12113 / 35032 13503 / 38157 14882 / 41310 34.58% 35.49% 36.03%
16464 / 44820 37.71%
NET PROFIT MARGIN = NET PROFIT / SALES * 100
Year 1
Year 2
Year 3
Year 4
Year5
9034 / 32092 = 28.15 %
9688 / 35032 10870 / 38157 12042 / 41310 27.65 % 28.49 % 29.15 %
13348 / 44820 29.85 %
RETURN ON EQUITY RATIO = NET PROFIT / EQUITY * 100
Year 1
Year 2
Year 3
Year 4
Year5
9034 / 18807 = 48.03%
9688 / 23288 10870 / 33440 12042 / 44823 41.60% 32.51% 26.69%
13348 / 57433 23.24%
RETURN ON INVESTMENT RATIO = NET PROFIT / INVESTMENT * 100
Year 1
Year 2
Year 3
Year 4
Year5
23
9034 / 27693 = 32.62%
9688 / 36310 10870 / 46109 12042 / 57080 26.68% 23.57% 21.10%
13348 / 69387 19.24%
NET PRESENT VALUE (NPV) Year Cash Flows Discount Factor (13.43) 0.882 0.778 0.686 0.605 0.534 0.471 0.415 0.366 0.323 0.285 PV 10569 9923 9703 9391 9129 8052 7094 6257 5522 8456 77002
1 11984 2 12574 3 14144 4 15523 5 17095 6 17095 7 17095 8 17095 9 17095 10 29669 Total 153846 Net present value = Present value of future cash flows-initial investment NPV = 862-19270 = 57732 PROFITABILITY INDEX Cash outflows = 19270 PV of future Cash inflows = 77002 Profitability Index = PV of future cash inflows/Cash out flows = 77002/19270 = 3996
23
PAYBACK PERIOD WITHOUT DISCOUNTING Years 0 1 ( a) 2 3 4 5 6 7 8 9 10 cash inflows 19270 (b) 11984 12754 (d) 14144 15523 17095 17095 17095 17095 17095 29669 cumulative cash flows 11984 ( c ) 24738 38882 54405 71500 88595 105690 122785 139880 169549
Payback period formula a + (b c)/ d 1 + (19270 11984) /12754 1 + 7286/12754 1 + 0.5712 1.5712years PAYBACK PERIOD WITH DISCOUNTING Years 0 1 ( a) 2 3 4 5 cash inflows 19270 ( b) 10569 9923 ( d) 9703 9391 9129 cumulative cash inflows 10569 (c ) 20492 30195 39586 48715
23
6 7 8 9 10
8052 7094 6257 5522 8456
56767 63861 70118 75640 84096
Pay back period a +( b-c )/ d 1 + ( 19270 10569) / 9923 1 + 8701 / 9923 1 + 0.8768 1.8768
23
REFERENCES
1. http://www.nation.com.pk/pakistan-news-newspaper-daily-englishonline/Politics/13-Jul-2011/CNG-price-linked-to-55-per-cent-of-petrols 2. http://thefinancialdaily.com/news/top-stories/different-cng-in-pakistan68555.aspx 3. http://tribune.com.pk/story/208157/new-cng-pricing-formula-agreed-upon/ 4. http://www.pakistannewsupdate.com/business/decision-time-ogra-admitsirregularities-in-relocation-of-cng-stations/ 5. www.ogra.org.pk/images/data/downloads/1305195982.doc 6. gee-21.org/publications/Development-of-CNG-Industry-in-Pakistan.pdf 7. http://www.pakcng.com/cng-news/National/news.asp 8. tribune.com.pk/.../hydrocarbon-ogdc-completes-study-on-local-exp 9. http://www.cngnow.com/EN-US/Vehicles/AroundTheWorld/Pages/default.aspx 10.http://www.pikeresearch.com/research/natural-gas-vehicles 11.http://www.cnbc.com/id/40794709/Natural_Gas_Vehicles_On_The_Road_To_Ac ceptance 12.http://www.forbes.com/2008/07/30/natural-gas-cars-forbeslifecx_jm_0730cars.html 13.http://www.cngstations.com/vehicles-on-cng-ngv/ 14.http://www.cngpump.com/aboutCNG.php 15.http://www.lngworldnews.com/gazprom-promotes-natural-gas-vehicles-in16.http://baftechnologies.com/blog/natural-gas-vehicles-around-the-world/ 17.http://www.worldcng.com/
23
INDEXES
A
Acknowledgement 1 application forms 20 asbestos 14 encouraging the use of CNG 11 Executive summary 7 Existing Supply 9 Explosive department 14
C
civil works 13 CNG 7 CNG station 7 combustion process 19 commercial 8 commercial application of CNG technology 8 commitment to promote usage of CNG 11 compressor 12 Control Room 13 convenience and availability 12
F
facilities 13 Fire related walls 14 Flooring 13 Forest department 22 Future Demand 10
G
Gas Piping 13 green house emission 9 growing demand 11
I
ID card. 21 increasing prices of petroleum products 9 increasing trend of CNG fueling system 10 increments 17 industrial sector 8 Infrastructure 12 Introduction 8 Introduction and promotion of newly developed gas kits for rickshaw in Pishin District 9
D
demand for CNG 7 Demand for current consumption 10 Deregulated market price 11 Development Institute of Pakistan 19 discharge the gas 14 Dispenser 13
E
ECONOMIC ANALYSIS 19
23
joint venture 21 Jordaire Model 15
P
prerequisites 12 Priority panel for Vehicle priority 15 Promotion of vehicles with built in CNG fueling system 10
L
land requirements 12 Liberal policy 11 LICENSES 21
R
Raw material 12 refueling 14 Relaxation of import duty 11
M
Machinery and Equipment 14 Main compressor 18 Market Analysis 8 Market Demand 9 Market supply 9 Material inputs 12 ministry of petroleum 22
S
safety concerns 10 Screw compressor 18 Site selection 12 Storage Room 13
N
national tax No certificate 21 natural resource of energy 7 No objection certificate 22
T
traditional petroleum fuel 18
V
viz, Gemini Compressor H302 15
O
opportunity for the new entrants 11
W
Wages and Salaries 17
23

Feasibility Report CNG Filling Station

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Feasibility Report CNG Filling Station

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the

Stylish Project book cover page

for CNG filling station installation at

District Pishin Saturday, July 23, 2011

En route to Mr. Rahim Mangel

FUEL=12900 CUBIC METER/DAY................................................... 10

FUTURE DEMAND..................................................................................10 DEMAND PROJECTIONS

CNG (IN PISHIN DISTRICT)..............................................11

CNG POLICY..........................................................................................11 THE

HAS OFFERED NUMBER OF INCENTIVES FOR ENCOURAGING THE USE OF

THE COUNTRY SOME OF THESE ARE SUMMARIZED BELOW:..............................................................11

TECHNICAL ANALYSIS...........................................................................12 MATERIAL

MANPOWER REQUIREMENT................................................................................................16 Human Resource Requirement..........................................................................17 COMPRESSION

PROJECT & FINANCIAL PLAN.............................................................................24

Cost of the Project..............................................................................................24 Financial plan.....................................................................................................24 COST LIST

SALES ESTIMATE (REVENUE).............................................................................................26 SALES

REVENUE: WORKING...................................................................................................... 27 COST RATE

GOODS SOLD...................................................................................................28 GAS CONSUMED;...............................................................................................29

AND SALARIES..................................................................................................... 29 CONSUMED)........................................................................................30

Fixed charges.....................................................................................................30 Variable charges................................................................................................30 STORES REPAIRS OTHER

DEPRECIATION.............................................................................................................. 32 1. MACHINERY and building...............................................................................32

and fixture cost 391000, and an amount of 2462000 of subsidy.

MARKET SUPPLY EXISTING SUPPLY

DEMAND FOR CURRENT CONSUMPTION

DEMAND PROJECTIONS FOR VEHICLES ON CNG (IN PISHIN DISTRICT)

60% 70% 80% 90%

Type of Construction RCC RCC RCC Canopy _

Covered Area(sq. ft) 436 144 1400

Cost per Sq.ft. (Rs.) 475 475 475 Lump sum -

Cost(Rs.) 207,100 68,400 665,000 200,000 300,000

gas piping Flooring Contingencies Total cost

300,000 90,000 3,630,500

ELECTRIC CONTROL PANEL

PRIORITY PANEL FOR VEHICLE PRIORITY

CNG DISPENSER HIGH FLOW DUAL HOSE

HUMAN RESOURCE REQUIREMENT

No. Of Employees for two shifts 1 1 2 4 2 1 1 2 1 15

1. Screw compressor 2. Main compressor

PROCEDURE FOR OBTAINING THE LECENSE OF CNG STATION

REGULATION, LICENSES AND INCENTIVES

28,140 500 150,965

1,702,470 9,103,133 546,188 30,250 30,000 9,709,570

Annexure 2 SALES ESTIMATE (REVENUE)

Annexure 2.1 SALES ESTIMATE (REVENUE): WORKING

(Based on 16 hour working day and 360 days per annum)

The capacity of one cylinder on average = 12.9m3

Annual increase in the prices of Gas

Year 1 75% 13,465 781

Year 2 80% 15,202 820

Year 3 85% 16,546 861

Year 4 90% 17,884 904

Year 5 95% 19,428 9494

4,088 484 133 631 321 6,388 20,634

4,315 514 200 631 350 6,777 22,799

4,542 545 267 631 322 7,112 24,519

4,768 575 267 631 413 7,500 26,288

4,995 605 267 631 448 7,834 28,211

558 558 223 781

558 28 586 234 820

586 29 615 246 861

615 31 646 258 904

year 646 32 678 271 949