Ensuring Safe and Legal Operations: Requirements and Procedures for LPG Refilling Facilities in Nigeria

A number of LPG Refilling Facilities in Nigeria run their operations without having duly obtained the requisite licences and approvals.

The establishment and operation of LPG Refilling facilities are captured under Guidelines issued by the defunct Department of Petroleum Resources (DPR) made pursuant to the Petroleum Act of 1969, the Mineral Oils (Safety Regulations) 1997 and the Petroleum Regulations of 1967. The Petroleum Industry Act (PIA) 2021 now empowers the Nigerian Midstream and Downstream Petroleum Regulatory Authority (the Authority) to grant, renew, modify or extend individual licenses or permits where the Applicant meets the following requirements:

• Technical standards are required for petroleum operations based on good international petroleum industry practices.
• The location and size of the area occupied by the facilities or right of way is acceptable to the Authority.
• Health, safety and environmental standards as determined by the Authority.
• Provides for the efficient and economic use of facilities.
• It includes an acceptable environmental management plan.
• It includes a decommissioning and abandonment plan.
• Does not conflict with a license already granted. ?

This article discusses the baseline requirements for the establishment and operation of LPG Refilling Facility in Nigeria. These requirements are established as conditions precedent for the grant of approvals and/or licenses for the construction, installation, and modification of LPG Refilling Facilities aimed at ensuring that the risks involved in the Licensee’s operations are minimized as far as is reasonably practicable.

Application, Approval and License Procedure for LPG Refiling Plant

LPG facilities receive and store LPG in bulk at licensed locations for the purpose of selling to end users or retailers. These Licensees which operate either above-ground or underground storage tanks fall under ‘Category D’ License holders.

After? paying the requisite fees, an Applicant for a License to establish an LPG refilling plant is expected to obtain the applicable approvals contained in the below-mentioned stages:

• Site Suitability Approval (SSA)
• Approval to Construct (ATC)/Approval to Install
• License to Operate

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Site Suitability Approval (SSA)

Any site chosen for an LPG Refilling facility must be sufficiently spacious to allow it to be designed to minimize the risks from LPG to any structure close to the facility.

During site selection and facility layout, the Authority must ensure that the site is accessible from the roadside, and must not be within or close to known hazards such as pipelines, right of way, high voltage cable, railways etc.

The site must also be within a radius of at least 100 meters from any existing third-party LPG refilling plant and must be at great distances from residential buildings, public buildings, places of assembly, industrial sites, or pressurized LPG tanks.

It is important for the proposed LPG refilling plant operator to obtain the SSA as it serves as a business enabling and advisory instrument to avoid the possible loss of investment that may result should the site be deemed unsuitable at the Approval to Construct phase.

The proposed operator will need to obtain the services of a Consultant to conduct a site location/site layout assessment after which the assessment report with the diagrams will be submitted for approval along with the certificate of incorporation and memorandum and articles of association of the company, and a survey plan of the proposed plot of land.

On review and approval, the Authority will issue the Applicant the SSA which it is required to display conspicuously at the site. The SSA is valid for 18 months subject to renewal on the condition that no development/encroachment of public/residential structures are found on the site, and that there have been no significant changes in the plot size of the site capable of affecting the minimum safety distances for the proposed capacity.

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Approval to Construct (ATC)/ Approval to Install (ATI)

Upon obtaining the SSA, the company is required to commence actions towards obtaining the ATC for the proposed facility. The company will satisfy the following requirements:

• An approved building plan from the appropriate Town Planning Authority (in Lagos State, it is the Lagos State Government Ministry of Physical Planning and Urban Development). This plan will contain the codes, standards and specifications adopted in the design, construction and installation of the ancillary equipment.
• A fire report by the Chief Federal/State fire officer.
• Any of the company’s tax clearance certificate or evidence of tax payment
• Health, safety and environmental (HSE) policy for the proposed plants.

The ATC is valid for 30 months and subject to renewal if the facility commences meaningful development and updates the Authority within 6-month intervals, visibly displaying an approval letter, engaging only companies who possess valid Oil & Gas Industry Service Permits (OGISP) for the construction and fabrication of storage facilities.

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License to Operate (LTO)

After the completion of construction works and leak test, the company will apply for an LTO, which shall be granted on the conditions that the proposed operator pays the requisite fees, engages companies with the applicable OGISP to construct the storage tank, prepares pressure test reports, provide the company tax clearance certificate, ensures its staff is trained under the applicable OGISP, and an approved standard operating procedure (SOP) for the gas storage facility.

The Authority will usually insist on conducting a pre-license inspection of the facility to confirm that the standard required amenities and equipment are being used, and that relevant staff are being trained in line with international best practices.

Before any of these permits or approvals are given, the Applicant must ensure that the design, construction, and installation are in conformity with the: Standard Organization of Nigeria (SON), American Society of Mechanical Engineers (ASME), National Fire Protection Association, American Welding Society, and other codes and standards recognized by the Authority. The Authority shall mandatorily witness every milestone.

The establishment and operation of LPG refilling facilities in Nigeria are subject to a comprehensive set of guidelines and procedures aimed at ensuring safety, compliance, and environmental responsibility.

This article has highlighted the fundamental stages and prerequisites involved in obtaining the necessary licenses and approvals. It is crucial for operators to recognize the significance of adhering to these requirements, not only for regulatory compliance but also for the safety of their operations and the surrounding communities.

Neglecting these steps can lead to significant risks and potential loss of investment.