LPG bulk storage and distribution in Sierra Leone

The applicant in this project is Geogas Trading S.A. based in Switzerland. Geogas is a trader and supplier of LPG (Liquid Petroleum Gas) worldwide. The local African partner is Benco Trading Ltd, a Sierra Leonean trading company, which mainly deals with the import and sales of food items, construction materials and small quantities of LPG. Both companies will establish a joint venture located in the oil harbour of Freetown.

The aim of this project is to introduce permanent LPG bulk storage facilities (with a maximum storage capacity of 300 tons) in order to supply the home market with LPG. The LPG will predominantly be used for cooking, but the gas can also be used for industrial practices, like welding, cooling etc. The applicant will supply the storage facility once a month. Next to the introduction of the LPG storage facilities, the project will establish 4 filling stations for (5 kg) LPG gas bottles, 1 in Freetown and 3 in other Sierra Leonean cities.

Sierra Leone is a Greenfield market, where the usage of gas is limited. This project will lead to the first permanent storage facility for LPG within Sierra Leone. Not only will the availability of gas will increase because of the monthly supply by Geogas, but it is also expected that the sales price per kilogram of LPG will drop with 60% in comparison to the current sales price per kilogram LPG. When the joint venture manages to increase the demand for LPG, a possible spin off effect of this project will be the reduction of the use of firewood for cooking purposes.

Corporate Social Responsibility (CSR)

Geogas takes full responsibility for the supply chain to the bulk storage facility. Furthermore, the company will make sure that all the installations of the joint venture will be secure. If there is any doubt about safety, the supply of LPG gas will immediately be halted. The facilities will be shut down until the problem is fully remediated. Furthermore, Geogas will make sure that there are clear-cut safety protocols and that its employees will receive comprehensive training and safety instructions. All the salaries are considerably above the minimum wages. All employees will receive health insurance. The joint venture's staff will be under strict instruction not to pay bribes. In case any employee or distributor is found to engage in any corrupt or unsafe practices, he or she will be dismissed immediately.

Impact

Employment and working conditions

In total 49 people will be employed by the joint venture within the project period. 22 of those jobs can be considered as high-level jobs, 8 at a medium-level and the remaining jobs are at basic-level. 21 Indirect jobs will be created at the gas filling stations.
After the follow-up investments, 33 additional jobs will be created, 14 high-level jobs, and 19 basic-level jobs. The lowest salary levels of the joint venture are at least 200% above the minimum wage.

Innovation/Transfer of knowledge

All the training concerning the maintenance of the facility, the safety protocols and the management of LPG bulk storage facility can be considered as new for the country.

Chain effects

In Freetown, the joint venture will work with 15 to 20 vendors who will operate as sales agents, each covering an assigned zone. They will each distribute a minimum of 1,000 cylinders in a system that is modelled on the system used by the local cement industry. The vendors will be trained within the project.
Three of the 4 filling stations will be exploited by other companies, who will also be trained in safety aspects.
The joint venture will supply gas to other major distributors, which may have their own filling station (presently only one operated by National Petroleum) but another company Safecon may reactivate its earlier LPG business and Total has expressed interest. It is in the interest of the joint venture that more parties are interested to participate in the mass distribution and marketing of LPG cylinders.

Environment

For the bulk storage site an environmental impact assessment will be carried out before the start of the project. It is however not expected that this project will have a negative impact on the environment. The LPG business chain produces a limited amount of waste, as the product is fully consumed at the end of the chain and the gas cylinders will be re-used.

Position of women

The joint venture will provide equal employment opportunities to both men and women. The joint venture aims to have at least 1 female person employed at senior management level and will employ at least 10 women at other levels.

PSI in Africa
Quality EducationDecent Work and Economic Growth

Project number

NL-KVK-27378529-PSIP09SL02

Total budget

€ 933,750

Countries

Sierra Leone

Project status

Finalised

Budget spent

100.00 %
100.00 % spent

Tied status

Untied
Startdate:
Enddate:

Project partners

Benco Trading Ltd, Geogas Trading S.A., Netherlands Enterprise Agency

Sectors

Oil and gas
Transactions
TypeProviderProvider ref.ReceiverReceiver ref.Value (€)DateValue date
Incoming Funds 900,000.00 08-09-2009 08-09-2009
Incoming Funds 33,750.00 26-11-2009 26-11-2009
Outgoing Commitment Geogas Trading S.A. 900,000.00 08-09-2009 08-09-2009
Outgoing Commitment Geogas Trading S.A. 33,750.00 26-11-2009 26-11-2009
Disbursement Geogas Trading S.A. 15,000.00 31-05-2010 31-05-2010
Disbursement Geogas Trading S.A. 628,800.00 18-08-2010 18-08-2010
Disbursement Geogas Trading S.A. 30,140.00 24-01-2012 24-01-2012
Disbursement Geogas Trading S.A. 3,610.00 16-02-2012 16-02-2012
Disbursement Geogas Trading S.A. 39,000.00 30-08-2012 30-08-2012
Disbursement Geogas Trading S.A. 40,200.00 20-11-2012 20-11-2012
Disbursement Geogas Trading S.A. 177,000.00 29-04-2013 29-04-2013