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Original Research

NJE. 2021; 28(1): 69-82


Economic Analysis of the Gas Distribution Pipeline Network for Estates in Nigeria.

ADEREMI AYODEJI ADEGBOLA,IDRIS I OZIGIS,IBRAHIM D. MUHAMMAD.




Abstract

This work presents the economic analysis of the gas distribution pipeline network for the University of Abuja Staff Quarters. The problem statement was the need to encourage gas distribution to buildings and estates across Nigeria through gas pipeline network supply in an economical manner that encourages investment into this venture. The methodology includes subjecting three (3) options (Series, Parallel, and Grid) to economic analysis to determine the viability of the project. The results of the economic study indicated a profitable and investment-worthy project, with option 3 (Grid connection) being the most lucrative of the three (3) options. The net present value is N6,862,078.46; the internal rate of return is 15.57%. The payback period for the project was 4.29 years; the project will break-even after the distribution of up to 39,535.58 kg of LPG, and the profitability index is 1.30. It can be concluded that the optimized design could be adopted for the gas pipeline network of the University of Abuja staff quarters and other estates in Nigeria, with similar elevation and building layout.

Key words: Equivalent Annual Cost, Net Present Value, Internal Rate of Return, Break-even (sales), Payback Period, Contribution Margin, Profitability Index






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