Feasibility study on CNG station

Abstract

Natural Gas is one of the most valuable natural resources abundantly available in our country. The people of Pakistan have been using petroleum products as fuel in their automobiles, thus spending a huge amount of foreign exchange on import of petroleum products. The Government of Pakistan has taken certain concrete steps in order to promote the use of natural gas as a fuel substitute in the automobiles. Due to the effo1ts made by the Government and comparatively low prices of gas, more than 410,000 vehicles have already been converted to operate on Compressed Natural Gas (CNG) fueling system all over Pakistan. Due to high cost of petroleum products, most of the vehicles are switching over to CNG. At present, there are more than 366 CNG stations operating in the Country and this number is insufficient to meet the rising demand of CNG in the coming years. The total project cost for setting up the CNG filling stations has been estimated at Rs.13.4 million. It includes CNG equipment and machinery, spares, along with the preliminary expenses and working capital. The project should be financed through equity contribution by the investor. Based on the projected financial statements, the returns on the project are I satisfactory. In the present scenario, a CNG station requires minimal marketing activities because of the economical consumption and benefits of CNG known to consumers maximally through word of mouth. The operations of CNG station with each step from scratch to the delivery of end product have been clearly stated. This allows this feasibility to act as a comprehensive plan for the setup of a CNG station.