CNG Station

AL-KHALIQUE CNG Filling Station Project Appraisal
Feasibility Report
on
AL-KHALIQUE CNG Filling Station
Course Instructor: Mr. Javaid Iqbal
Group Members:
Jawad Junaid (15)
Abdul Samad (13)
Muhammad Bilal (41)
Program: MSC A&F (Afternoon)

Session: 2008-2010
Department of Commerce
The Islamia University Bahawalpur
Department Of Commerce 1 IUB


Near Sutlej Toll Plaza Multan Road
BAHAWALPUR


Dedication
We dedicate this report to that personality to

whom every Muslim wants to idealize. That
personality is HAZRAT MUHAMMAD
MUSTAFA (PBUH). He (PBUH) was a role
model in every field of life. He (PBUH) tells us
how to work hard to achieve something.

Preface
Department Of Commerce has always tried to make its students be
familiar with the different techniques in the field of Project
Appraisal so that they can understand & present the concepts of
Project Appraisal in the todays world of progress & development.
The importance of principal work almost exists in every
professional field. Practical knowledge makes man a technical
person who enables to do every work efficiently regarding his
profession. The very distributive feature of the degree of Business
Administration is that it stresses more on the practical aspects of
study especially the 3rd semester. Our teachers have extremely
realized this importance & they use all the tacts to expose us to
the real field circumstances.
Project Appraisal has become a common phenomenon now-a-
days. We have tried our level best to fulfill the requirements of the
topic. Every effort has been made to incorporate all the available
means of information to make this assignment comprehensive. We
tried our best to accomplish our work.

ACKNOWLEDGEMENT
Special thanks to Almighty Allah, creator of the creative

minds.
We pay abundant thanks to our encouraging teacher &
instructor Mr. JAVAID IQBAL for enlightens our minds
with the rich information about the topic.
Special thanks are extended for those who help us in printing
& composing the research.
We are especially thankful to Mr. Tayyab Bashir (M.D Sultan
Bahoo CNG Station) and Mr. Saeed Ahmed (Manager Sultan Bahoo
CNG Station) Who provided us the necessary information and show
us the process of conversion of natural gas into compressed natural
gas (CNG).

Our Mission Statement
Our mission is to provide

the purify compressed
natural gas (CNG). We will
provide 24 hours service to
our customers so that we
can facilitate them
according to their
requirement. We have also
tuc shop and also tire
service shop at our CNG
station.

TABLE OF CONTENTS
SERIAL #. DESCRIPTION
PAGE #.
1. Executive Summary 09
2. Implementation 03
3. The Project Introduction 14
4. The Project Site & Location 15
5. NOCs16 16
6. Market Analysis 17
7. Technical Analysis 19
8. Local Equipment 20
9. Flow Diagram 28
10. Personal Analysis 30
11. Assumptions 32
12. Annexure 33
13. Swot Analysis 46
14. Recommendation 48
15. Conclusion 49

AL-KHALIQUECNG Filling Station

Near Sutlej Toll Plaza Multan Road
Bahawalpur

EXECUTIVE SUMMARY
NAME OF THE PROJECT: AL-KHALIQUE CNG STATION
NATURE OF INDUSTRY: CNG STATION

A NEW PROJECT
CORPORATE STATUS: PARTNERSHIP FIRM
LOCATION OF PROJECT BAHAWALPUR
ADDRESS NEAR SATLEJ TOLL PLAZA

MULTAN ROAD BAHAWALPUR
We are the fresh and energetic students of MSC A&F. We are going to start a new
business. We have selected the business of CNG Station. We have selected this
business because there is so much potential in this business. Especially todays there
is increasing number of cars. This is also a challenging project. This will be the test
of our hidden qualities.
AL-KHALIQUE CNG STATION registered firm established with the objective of

installing a CNG Re-Fuelling Station at Sutlej Toll Plaza, district Bahawalpur. The
firm is intending to start its operations initially with one station in Bahawalpur. The
firm has plans to expand its network later to in other cities.
CNG is environmentally friendly fuel since it unleaded and releases less than 10%
carbon mono oxide as compared to petrol and is an indigenous fuel commonly known
as natural gas and Sui gas. Natural gas is compared to high pressure for storage, for
this purpose, a compressor and storage facility is installed, the vehicle to run on
CNG, it is suitably modified to have a vehicle storage cylinder, high pressure has

piping and filling system and other items like pressure regulator, pressure has relief
value, solenoid switch etc.
We are going to produce only one product i.e. CNG. We are not producing any
other product. We are following the single product approach. So the only problem we
have to face is the production problem. Growth of sale does not matter. At initial
stage we will be producing at 75% capacity.
We purchased our plant from abroad and as well as from local. Plant reached at
site at January 1, 2010. Our plant installed on March 1st 2010. It started its trial run on
March 2010. It started its commercial operation on January 1st 2011.
The financial ratios of our company are increasing. Its means that our company is
prosper day by day. So the company is doing very well business and there is no
chance of loss.
Estimated cost of project (Rs in 000) =

Fixed cost 45408
Initial Working Capital 5859
Total Cost 51260
Means of Finance:
There are two types of means of finance. One is from our own
resources and other is from taking debt from Bank. The ratio is of debt
and equity is of 60:40
MEANS OF FINANCE
Debt
Habib Bank Ltd 30760 30760
TOTAL DEBT: 30760
Equity
- Paid-up Capital (Sponsors) 20507
TOTAL EQUITY 20507
TOTAL DEBT & EQUITY 51260

DEBT : EQUITY RATIO 60 : 40

SPONSORS' STAKE 40%
Name of lender:
Our name of lender is Habib Bank Ltd which will provide us the entire
loan which we need for the completion of our project. The interest rate of
the Bank is 18%.
Name of sponsors:
The sponsors of the project are professionally qualified and have

valuable and extensive experience of business management regarding. They have got
petrol pump & CNG and good trading contacts and market reputations in the city.
The project faces not problems in terms of marketing its product. The sponsors
experience would assist the firm in its smooth and profitable operation.
The sponsors are financially sound and capable to contribute their part of
the equity in the proposed scheme. The managing partner of the firm has vast
experience in the managing of this industrial organization
SR.NO. NAME DESIGNATION
1. Jawad Junaid Managing partner
2. Abd-Ul- Samad Partner
3. M. Bilal Partner

The detail of machinery is given below:
Compressor model skid Mounted
Water Cooled W-Type Compressor
High pressure Piping 3-line
Priority fill Panel Spares
Dispenser
Storage Cylinder
Name of civil contractor :
The name of civil contractor is Mr. Naeem Ashraf Uppul. We hire the services of
that contractor for constructing our building and pay him fee for his services.
Name of Machinery Supplier:
The name of machinery supplier is Mr. Matloob Ahmed. He arranged the machinery
from the foreign and get his commission for his services.
Address:
21 Bird wood road of jail road Lahore Punjab Pakistan

IMPLEMENTAION PERIOD
The project is expected to be implemented within 6 months from the date
of the submission of the proposal to the bank. The details of the activities along
with time required are given as under:
TASK MONTHS
Bank approval February 2010
Purchase of land March 2010
Construction of building October 2010
Arrival of machinery at site November 2010
Installation completed December 2010
Trial run December 2010
Commercial operation started January 2011

INTRODUCTION OF COMPANY
The company is doing partnership business. There are three sponsors of
the company which are the partners of the company also. The company is doing
legal business. Profit earned by the company is distributed among the members
of the company.
We are going to produce only one product i.e. CNG. We are not producing any
other product. We are following the single product approach. Growth of sale
does not matter. At initial stage we will be producing at 75% capacity.
We purchased our plant from abroad and as well as from local. Plant
reached at site at January 1, 2010. Our plant installed on March 1st 2010. It
started its trial run on March 2010. It started its commercial operation on January
1st 2011.
CNG stands for Compressed Natural Gas. It is one of the most viable
alternatives to traditional fuel energy resources for the automotive industry. CNG
is low in pollutants, high in calorific value and heat yield, economical and
available in abundance globally
The business of CNG filling station has marked its place in the country through
growth during the last few years. This growth has opened up new opportunities
and more CNG filling stations are being setup all over Pakistan. The prime
reason for this is the low cost of the fuel. Along with that, CNG fuel is less
hazardous to the environment as compared to the traditional petroleum fuel

LOCATION OF THE PROJECT

The project is proposed to be setup near the Sutlej Toll
Plaza Multan Road Bahawal Pur. The site enjoys the following advantages:
Easy availability of raw material

Availability of communication facilities like telephone, telex, etc
Access to main road, sources of power, water, fuel, etc.
Availability of skilled and unskilled manpower.
Free from other environmental hazards like water-logging, floods salinity,
etc.

NOCs Required For CNG Station

No Objection Certificate will be required from the following departments prior to the
Commencement of the business:
Concerned development authority of the city (Bahawalpur Development

Authority)
Traffic Engineering and Planning Authority (TEPA)
Traffic Police (SSP)
Department of Civil Defense
National Highway Authority (NHA)
Central Board of Revenue (CBR)
Civil Administration-Tehsil Municipal Administration (TMA)
Oil and Gas Regulatory Authority (OGRA)
No person can set up CNG station without first obtaining license from the
Authority i.e. Oil and Gas Regulatory Authority Islamabad under Rule 6 of CNG
(Production & Marketing) Rules, 1992. Initially OGRA issues provisional license
for a period of 2 years for setting up CNG station. After obtaining provisional
license from the authority, the licensee is supposed to start construction of the
station and also obtain NOCs from the local authorities and a license from
DEPARTMENT OF EXPLOSIVES on form B .

MARKET ANALYSIS
The commercial application of CNG technology now forms an important element
of
Governments petroleum policy, which is reflected in the efforts made by the government
For installing so many CNG stations in the country and converting 600000 vehicles on
CNG fueling system till February 2005.
Market Demand:
At present there are more than too many vehicles, which have been
converted to CNG fuel. Due to the increasing prices of petroleum products, the
trend of converting cars to CNG fueling system has been on a rise. However,
there exist a large number of people who were reluctant to convert their vehicles
from petrol to gas due to safety concerns. Recently, many car manufacturers
have started manufacturing the cars with built-in CNG fueling system. This
change has led to enhancing the confidence in the minds of the general public
regarding the safety concerns, and now, more people are inclined towards
purchasing these factory-fitted CNG fueling system cars.
Present Demand:
The present demand of CNG is very high because the cost of CNG is very cheep as
compared to petroleum, diesel and LPG. This is also beneficial for the life of
engine of vehicles so the people prefer the CNG.
Now the transporters also converting their vehicles in to CNG vehicles because
cost of CNG is very low and in this way they can earn high profits and engine of
their vehicles also saves so the demand of CNG is increasing day by day. Now a
day the demand of CNG is so high that there is supply and demand gap
generated for CNG.
The use of CNG in vehicles brings an added blessing that it is much less
polluting than regular gasoline (petrol). The emissions coming out of CNG
vehicles consist of water vapors and carbon monoxide (CO).

With Pakistan going full ahead with making CNG as the primary fuel source
for transport, one concern is that Pakistan is depleting its Natural Gas reserves
faster than ever before.
Estimated demand during next five years:

It is estimated that the demand of CNG in next five years will be so high.
The only reason is that now a days all vehicles are converted into CNG vehicles.
The millions of vehicles are converted into CNG vehicles. So it is impossible that
the demand of CNG I going to be end in next years.
Distribution channel:
No distribution channel is required for CNG. The customers come at CNG
station and fill their cars with CNG. So no distribution channel is required.

TECHNICAL ANALYSIS
The main machinery at CNG station is compressor. The technology involved
in machinery is very advance and technical. Pakistan is not to advance to
produce or manufacture the compressor because Pakistan has no technology to
manufacture it so the whole technology involved is imported from the Canada
because Canada is very advance in technology and manufacturing high standard
of compressor. Dispensing machine also imported from Canada. Compressor
imported from Canada is very good in its function. It contains two generators one
is run by the natural gas and other is run by electricity. So that in case of
absence of electricity or Sui gas other generated can be used. This compressor
converts the Sui gas into CNG with the help of 3 way pipelines and cooling tower
then this compressed natural gas is transferred to Dispensing machine to
vehicles and system is control by Control panel.
CNG has now become a major area of investment and is being actively
promoted as alternative fuel across the entirety of the automotive industry in
Pakistan. As a cheaper and environmentally friendly alternative, the shift to CNG
has proved immensely popular, especially in light of the spiraling price of oil.
With an exponentially growing market, there are growing challenges and
potentials for growth arising as well. Being one of the pioneers of CNG sector in
Pakistan.

EQUIPMENTS AND FACILITIES
The proposed CNG station will comprise of following main facilities;

Compressors
Storage cascade
Dispensing point
Building & other civil works
Gas receiving & electricity connection.
List of LOCAL EQUIPMENTS

CNG stations the major component of equipment used is imported. But some
locally available components are also used.
Below is given a list of some such equipments and consumables. Lo CNG

station
1-Buffer Suction vessel with Pressure gage and Safety relief valve
2-Blowdown Recovery with Pressure gage and Safety relief valve
3-MS pipes and fittings for Gas Inlet, Bleed gas and safety relief vent lines
4-Clamps for supporting low pressure, high pressure gas pipes
5-GI pipes with fittings for Water IN and OUT lines

6-Water pump with motor
7-Cooling Tower
8-Air Compressor
9-Soft pipes (tubes) for air flow
10-Electric Cables for Main Compressor motor, Oil pump motor, Water pump
Motor, Cooling Tower fan motor, Automation devices, Bare Panel emergency
buttons, Earth plate copper strip
11-GI flexible pipes for insulation of cables
12-Pressure Gas Regulator to be installed between Buffer and Blow down

vessel
13-NRV to be fitted between Buffer and Blow down vessel
14-Flexible Pipe for Gas Inlet
15-Ball valve for Gas Inlet

Compressor:
Two compressors of 530 Nm/hr will be installed with appropriate storage cascades.
Sequential and three ways penal priority installed in separate room will be operated from
a control panel outside the compressor room.

COLLING TOWER:
When the compressor run it produces heat which should be minimize. For this purpose
we used cooling tower. Now the question arises how it work. Its working is very simple
it rotate the water in this way heat evolve out and temperature minimize

Electric Control Panel
Electric control panel is required to operate the gas compressor. This

panel will be mounted in the control room. If there is any problem is occur in
compressor and cooling tower then the electric control panel locate the error and
in this way easily remove.
.

Storage Cascade
Storage cascades/cylinders are used to store the natural gas. In absence

of light we can use the gas from the storage cascade.
.

Priority Panel
Priority Panel for Vehicle Priority During rush hours, the compressor is
directly connected to the dispenser, bypassing then storage cascades/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 into the vehicles with the help
of dispenser. This dual hose dispenser is capable of handling two vehicles at a
time.

Input Required
The main input for CNG is natural gas which is obtained from SNGPL. This is the main
input for the CNG then electricity is also required to run the compressor.
In the case when there is no electricity the diesel is also required to run generator , so
that the supply of CNG in the vehicles will not stop.

Some chemicals also used these chemicals include one type of acid and one type of base.
These two used in the cooling tower to purify the gas.
Flow Diagram
Sui Gas Yellow Pipe Goes to the TANK

Filters
Micro Filters
For
(Further Purification)
Purificatio
n Regulators
Department Of Commerce Used
29 for the IUB
STAGE 1 STAGE 2 STAGEManually
Adjustments 3Auto STAGE
Priority
4 Panel
Cooling Process More Compressed CompressedDispenser
FurtherOperators BanksEnters
Distributors
Machines
the Compressor
Comes In the Cooler
Vehicles Machine Room
EXPLANATION:
The above is the chart that shows the brief process how GAS (SUI)
moves from different processes and finally reaches the ultimate vehicle in the
shape of compresses GAS.
S
First of all it enters into the FILTERS for purification purpose and this
consists of two filters. And then it enters into a TANK and then again enters into
the MICRO FILTER for further purification and finally enters into the main
compressor room. Here it is operated in a two ways, manually and Auto control.

After these it enters into the FOUR STAGE compressor machine for the
purpose of COOLING. This is a complex stage and the main purpose of this
machine is to just only compress the gas in order to make high pressure.
In the next step, it moves to the Priority PANEL. From where it is filled into
the GAS CYLINDERS and finally reaches the VEHICLES through the help of
DISPENSORS.
PERSONAL Analysis
Management
The overall management and control of the firm will be entrusted

with partners. The partnership will comprise of following partners.
SR.NO. NAME DESIGNATION

1. Jawad Junaid Managing partner
2. Abdul Samad Partner
4. M. Bilal Partner
All of the promoters are the fresh Student of MSC A&F .

The day to day running and operation of the project will be carried out by
sponsoring partners with the help of team of professional. The team of
professional will be hired for managing financial and technical aspect of the
project. The team will consist of qualified and experienced personnel.
Requirement of Staff
Technical staff
For the well check and running of compressor a person is required which
should have done the diploma in Electrical engineering. So that he can

understand the working and function of compressor, and one helper is also
required having diploma in the electrical engineering.
Non Technical Staff
There are ten or more persons required which should be metric. These staff
required to operate the dispensing machine for fulfilling the gas into vehicles.
Gas filling is so simple process and it is not a technical process so there is not
need for a special staff, which should have some specific kind of diploma. One
sweeper is also needed for the cleanness of the CNG station. And one security
guard is also needed for security purpose.

Assumptions
We are taking 360 days a year
There will be no load shedding problem from august and we are starting from 1st
July, 2010 and the load shedding will be for 3 hrs a day.
After 1 year there will be no load shedding in the year 2011
We are assuming a 15 % increase in wages every year.
Overheads are .5% of sales
Erection for improved machinery is 15%
Prices of the machinery will increase in the future
It is also assumed that the need of CNG will be increased in the future
Imported machinery will be purchased on loan from Habib Bank @18%.
We are using straight line method for depreciation.
Income tax will be charged at 35%.
The Debt to equity ratio will be 60:40respectively
There will be the business of CNG filling.
Other income is generated from the tuck shop, tire service shop and also from the
oil exchange and vehicle service shop.
The company is earning most of its revenue from other income resource.
The cost and sale of CNG will be increase 5% each year.

ANNEXURE
COST OF LAND
Rs
Area in ("000")
Sr. Rate in Total
No. Description Marlas percentages Unit Cost Cost
1 Land 50 100,000 5,000
2 Registration 1% of cost of Land 50 1% 1,000 50
3 Stamp Duty 2% of Cost of Land 50 2% 2,000 100

District Council corporation Fee 1% of
4 Cost of Land 50 1% 1,000 50
Development Charges 5% of Cost of
5 Land 50 5% 5,000 250
6 CVT and TMO Fee 2% cost of Land 50 2% 2,000 100
Total Cost of Land 111,000 5,550

Cost of civil works

Estimated Cost of Civil Works
1marla =
272 Sq feet
50marlas =
136000 Sq feet
Rate Rs
Type of Unit of Covered Per ("000")
Total
Sr. No. Description Building Construction area Unit Cost
1 Compresser Room RCC Square feet 1500 1200 1800
2 Tire Shop RCC Square feet 200 1200 240
3 Wash Rooms RCC Square feet 100 1200 120
4 Electric panel room RCC Square feet 500 1200 600
5 Mosque RCC Square feet 800 1200 960
6 Manager room RCC Square feet 600 1200 720
7 Account section RCC Square feet 400 1200 480
Cost of Jumbo Open
8 Lawn area Square feet 2,500 800 2000
9 Generator Room RCC Square feet 500 1200 600
10 Tuc shop RCC Square feet 400 1200 480
11 Cyledrical room RCC Square feet 1000 1200 1200
12 Store RCC Square feet 300 1200 360
13 Fire section room RCC Square feet 300 1200 360
14 Workshop area RCC Square feet 1000 1200 1200
15 Main Canopy RCC Square feet 2000 1200 2400
Open
16 Front area area Square feet 1500 800 1200
Total Cost of Civil
Works 13600 14,720

Annexure - III
AL-KHALIQUE CNG FILling Station
Estimated Cost of Machinery
("000")
Sr.No. Description Qty Unit Cost LCY FCY Total cost
1 Compressor Machine 1 4,500,000 4,500,000 4,500
2 Dispensors 3 1,200,000 3,600,000 3,600
3 Storage Cascade 40 50,000 2,000,000 2,000
4 3 Way High pressure Lines 3 200,000 600,000 600
5 Control meter system 1 2,000,000 2,000,000 2,000

6 Priority panel 1 200,000 200,000 200
7 Cooling tower 1 100,000 100,000 100
8 Oil filter + stainer 2 55,000 110,000 110
10 Control panel 1 450,000 450,000 450
11 Generator 2 500,000 1,000,000 1,000
12 Water pump with motor (7.5 KW) 2 25,000 50,000 50
13 Chemicals + oil 1 50,000 50,000 50
14 MSV 3 15,000 45,000 45
15 Fire extinguisher 6 10,000 60,000 60
16 Contingency 5% - 738000 738
Total Cost of Machinery 4,953,000 10,550,000 15,503


Estimated cost of the Project
("000")
Sr.No. Description LCY FCY Total cost
1 Land 5,550 - 5,550
2 Building 14,720 - 14,720
3 Machinery 4,953 10,550 15,503
4 Installation & Erection 15% of Machinery 2,325 2,325
5 Insurance 5% of Cost of Machinery 775 775
6 Intrust during Construction 5,614 5,614
8 Furniture and Fixture 150 150
9 Office Equipment 100 100
10 Pre-operating expenses 671 671
Estimated fixed cost 45,408
Add: Net Initial Net Working Capital 5,859
Total Estimated Cost of Project 51,266
MEANS OF FINANCE
Debt
Habib Bank Ltd 30,760 30,760
TOTAL DEBT: 30,760
Equity
- Paid-up Capital (Sponsors) 20,507 20,507
TOTAL EQUITY 20,507
TOTAL DEBT & EQUITY 51,266
DEBT : EQUITY RATIO 60 : 40

SPONSORS' STAKE 40%


Initial Net Working Capital Requirement
Descriptions Rs. "000"
A. Current Assets:
1 Advances, & Prepayments 200

2 Stores & Spares 300
3 Accounts Receivable is 2% of sakes 2% 859
4 Cash 4,500
Total Current Assets 5,859
B. Current liabilities -
Initial Net Working Capital 5,859
Years 2011 2012 2013

Production Capacity 80% 85% 90%
Consumption of Raw
Material
Quanity
Description ("000")
3000 Kg of Sui Gas/day/Compressor 864 918 972

Total Quantity
Consumed 864 918 972
Cost of Raw material: Rs.30/Kg
Description Rs. ("000")
Sui Gas @ 30/kg 25920 27540 29160

Total Cost 25920 27540 29160
Sales Revenue:
Unit Rupees
Description Price(Rs.) ("000")

75% 80% 85% 90%

CNG 53 0 45,792 48,654 51516
Total Sales 42,930 45,792 48,654 51516
Administrative And General Expenses Rs 000

1 Year = 12 months
Sr. No. Designation No. of Salary/ Annual

Employees Month Salary
1 Manager 1 20,000 240
2 Cashier 2 16,000 192
3 Accountant 1 10,000 120
4 Operator 1 8,000 96
5 Gas Fillers 12 72,000 864
6 Peon/Sweeper 1 6,000 72
7 Security Guard 2 12,000 144
Total cost 20 144,000 1728
General Expenses:
Sr. No. Description Year Exp. ("000")
1 Printing & Stationary 75

2 Telephone, Telex, Postage 40
3 Rents, Rates and Taxes 100
4 Entertainment 60
5 Miscellaneous 50
Total 325
Assumptions: Administrative Salaries will increase @ 15% every year.
Year Wise Administrative Salaries:

Note: Salaris will be increase 15% each year
No. of Rupees ("000")
Sr. No. Designation Employees 2010 2011 2012 2013
1 Manager 1 240 276 317 365

2 Cashier 2 192 221 254 292
3 Accountant 1 120 138 159 183
4 Operator 1 96 110 127 146
5 Gas Fillers 12 864 994 1,143 1,314
6 Peon/Sweeper 1 72 83 95 110
7 Security Guard 2 144 166 190 219
Total 20 1728 1,987 2,285 2,628
General Expenses:
Sr. No. Description Rupees ("000")
1 Printing & Stationary 75 83 91 100
2 Telephone, Telex, Postage 40 44 48 53
3 Rents, Rates and Taxes 100 110 121 133
4 Entertainment 60 66 73 80
s5 Miscellaneous 50 55 61 67
Total general expenses 325 358 393 433
4- DEPRECIATION COST
DEPRECIATION COST HAS BEEN CALCULATED ON STRAIGHT

LINE PRINCIPLE APPLYING USUAL RATES AS UNDER;-
Rupees("000")
Amt. of
depreciatio
n
Plant & Machinery 15,503 10% 1,550
Building 14,720 5% 736
Furniture & Fixtures 150 10% 15
Office equipment 100 20% 20
2,321
Note; The amount of depreciation will be same each year
Manufacturing
Overhead Cost:

AL-KHALIQUE
FILLING STATION
KW OR mon
Price Units th
Electricity fixed cost 315 160 12
Electricity variable cost 10 2000 12
Rs
Description ("000")
Fixed Cost:
Power: @ 315/160/KW/Month 605

Insurance: @ 5% of machinery 775
14,40
Fix charges of gas 0
Maintenance and Depreciation:
Overhauling Expenses of Compressor 30

Maintenance of Building @ 5% of Cost of Building 736
Maintenance of Dispensors 50
16,59
Total Fixed Cost 6
Variable Manufacturing Expenses:
Power:@ 10/unit of 2000 units/Month 240

cost of gas 24,300
24,54
Total Variable Cost 0
Description 2010 2011 2012 2013

Rupees ("000")
75% 80% 85% 90%
Fixed Cost 16,596 16,596 16,596 16,596
Add: Variable Cost 24,300 33,567 27,540 29160
Total Overheads Cost 40,896 50,163 44,136 45,756
AMORTIZATION TABLE
Nmae of Bank Habib Bank Limited

30,760,00
Amount of loan 0
Rate Of Intrest 18% per Annuam
Period Of Loan 5 Years 360
Repayment of Intrest Quartely Instalment
Repayment of Instalment Half Yearly
Date of Disbursement of Loan 3/31/2010
Completion of the Project 31/12/2010
Date of Commercial Production 31/3/2011
Date of Repayment of principle 30/6/2011 6 Instalment
No of Principle Amount Total Outstanding
Due Dates Days Instalment of Intrest Instalment Principle
3/31/2010 0 0 0 - 30,760,000
6/30/2010 91 0 1,399,580 1,399,580 30,760,000
9/30/2010 92 0 1,414,960 1,414,960 30,760,000
12/31/2010 92 0 1,414,960 1,414,960 30,760,000
3/31/2011 90 0 1,384,200 1,384,200 30,760,000
3,076,00
6/30/2011 91 0 1,399,580 4,475,580 27,684,000
9/30/2011 92 1,273,464 1,273,464 27,684,000
3,076,00
12/31/2011 92 0 1,273,464 4,349,464 24,608,000
3/31/2012 91 1,119,664 1,119,664 24,608,000
3,076,00
6/30/2012 91 0 1,119,664 4,195,664 21,532,000
9/30/2012 92 990,472 990,472 21,532,000
3,076,00
12/31/2012 92 0 990,472 4,066,472 18,456,000
3/31/2013 90 830,520 830,520 18,456,000
3,076,00
6/30/2013 91 0 839,748 3,915,748 15,380,000
9/30/2013 92 707,480 707,480 15,380,000
3,076,00
12/31/2013 92 0 707,480 3,783,480 12,304,000
3/31/2014 90 553,680 553,680 12,304,000
3,076,00
6/30/2014 91 0 559,832 3,635,832 9,228,000
9/30/2014 92 424,488 424,488 9,228,000
3,076,00
12/31/2014 92 0 424,488 3,500,488 6,152,000
3/31/2015 90 276,840 276,840 6,152,000
3,076,00
6/30/2015 91 0 279,916 3,355,916 3,076,000
9/30/2015 92 141,496 141,496 3,076,000
3,076,00
12/31/2015 92 0 141,496 3,217,496
Total 30,760,000 19,667,944 50,427,944
Intrest during Construction
from 3/31/2010 to 3/31/2011 5,613,700
2011 2012 2013 2014 2015 2016
Interest 3,946,508 4,220,272 3,085,228 1,962,488 839,748

Instalments 3,076,000 6,152,000 6,152,000 6,152,000 6,152,000 3,076,000
Estimated Income Statement
For the year ending Sept. 30, I II III IV
Efficiency Assumed : 75% 80% 85% 90%
SALES Construction year 45,792 48,654 51,516

COST OF GOODS
SOLD :
- Raw Materials 25,920 27,540 29,160
Depreciation Exp 2,321 2,321 2,321
GROSS PROFIT 17,551 18,793 20,035
OPERATING
EXPENSES
- Admin & General Expenses 1,987 2,285 2,628

Total Operating Expenses 1,987 2,285 2,628
OPERATING PROFIT 15,564 16,507 17,407

NON OPERATING EXPENSES
- Financial Expenses 5,331 4,220 3,085
- Amortzn. of Prelim. Exp 134.2 134 134

- Workers Welfare Fund 5% 815 865 14,192,873
Sub-Total 6,280 5,219 912
PRE-TAX PROFI
T 9,283 11,288 16,495
Income Tax 35% 3,249 3,951 5,773
NET PROFIT 6,034 7,337 10,722
Dividend - - -
RETAINED EARNINGS 6,034 7,337 10,722
13,371 24,093

Estimated Balance Sheet

As on Sept. 30, Constructn. I II III
ASSETS
5,85
Cash 9 9,375 12,141 13,393
Accounts Receivables 916 973 1,030
Stores & Spares 1,000 1,100 4,600
Advances & Depostis 500 700 2,915

5,85 2
Total Current Assets 9 11,791 14,914 1,938
44,73
Fixed Assets at cost 7 44,737 44,737 44,737
Less: Accumulated
Dprcn. - 2,321 4,643 6,964
44,73 37,7
Net Fixed Assets: 7 42,415 40,094 73
Preliminary 67
Expenses: 1 537 403 268
51, 59,9
Total Assets: 266 54,743 55,410 79
LIABILITIES &
EQUITY
Current Liabilities
Account Payable 518

-Workers Welfare Fund -
- Dividends Payable - -
- Cur. Mat. of L T Debt - 3,076 3,076 3,076

Total Current
Liabilities: - 3,594 3,076 3,076
Long-term
Liabilities
1
HABIB BAMK LIMITED 30,760 24,608 18,456 2,304
Total Long-term 30,76 1
Liab.: 0 24,608 18,456 2,304
EQUITY
20,50
Paid up Capital 7 20,507 20,507 20,507
- Un-appropriated Profit 6,034 13,371 24,093

20,50 4
Total Equity: 7 26,541 33,878 4,599
51, 59,9
Total Liab. & Equity: 266 54,743 55,410 79
CASH FLOW STATEMENT

For the year ending
Sept. 30, Const. Yr. I II III
SOURCES
Operating Profit - 6,034 7,337 10,722
Add Back: Depreciation - 2,321 2,321 2,321
Amortization - 134 134 134
Funds from 9,7 13,
Operations - 8,490 93 177
- Other Income - -
30,76
HABIB BANK LTD. 0 518
Increase in Current Liab. - - 3,076
Increase in Bank Borrowings - -
20,50
Paid up Capital 7 -
51,26 9
TOTAL SOURCES 6 ,008 12,869 13,177
APPLICATION OF
FUNDS
44,73
Investment in Fixed Assets: 7
-Preliminary Exp 671 - -
Financial Expenses - -
Repayment of : -
- Custom Debentures - -
social security
- Bank Borrowings - 3,076 6,152 6,152
Taxes 3,951 5,773
Increase in current Assets: 2,416
TOTAL
45,40
8 5,492 10,103 11,925
3,
Surplus/(Deficit) 5,859 516 2,766 1,252
5,
Cash Balance - Opening - 859 9,375 12,141
9, 1
Cash Balance - Ending 5,859 375 2,141 13,393

Calculation Of IRR
Years Net Profit Depreciation Amortization Cash Outflow/ Inflow
0 - (51260)
1 6,504 2,321 145 2456
2 7,643 2,321 145 2456
3 8,737 2,321 145 2456
IRR 21%
R A T I O S:
Current
Ratio 3 5 7
Liquidity
ratio
- Gross Margin (%) 38.3 38.6 38.9

% % %
- Operating Margin 33.9 33.8
(%) 34% % %
13.9 15.6 20.8
- Net Margin (%) % % %
Calculation Of Payback

Years Net Profit Depreciation Amortization

0 0
1 6,034 2,321 134 8,489
2 7,337 2,321 134 9,793
3 10,722 2,321 134 13,177
Inflows 31,459
outflow 51,266
Pay back period 1
Interpretations
Current ratio is continuously increasing it means that current assets of the company
are increasing continuously or there is a decrease in the current liabilities. A good
company has a good ratio of at least 1.25 The station has above this standard which
shows a good financial position
There is a huge sales being earned on the assets which shows assets are being
utilized in a good manner.
Gross profit margin ratio shows the increasing trend because cost and sale price of
natural gas increase up to 5%.. So the gross profit margin ratio is increasing year
wise.
The operating profit ratio is showing the increasing trend which shows that the
business of company profitable and company is earning well profit.
The net profit margin shows that CNG industry has a good growth rate now-a-days
hence it will good in the future.
The cash ratio of company is very good in all the years. It means the company has
sufficient cash to discharge its liabilities.
IRR is 21% that is good for the company.

SWOT ANALYSIS
Strength:
Raw material is easily available

Access to customers
Well technology is used
Demand is very high
Profit earning is high
Weakness:
Recourses are going to be end
Security problem
Government restriction
Load shedding of sui gas
Threats
The proposed project will be facing the following threat:

Market saturation over a longer period of time due to a large number of

entrants
Threat of increase in the prices of the natural gas by the government
SAFETY FEATURES
CNG has four safety features that enable it to be inherently a safer fuel as
compared to gasoline, diesel or LPG.
a) CNG is lighter than air so if it first rises and dissipates into the
atmosphere, on the other hand fuels will puddle on the grounds,
should a leak occur.
b) It has a self ignition temperature of 700-C against 455-C for gasoline.
c) CNG has to mix with air in a small range 4 to 14% by volume, for
combustion to take place. This is a lower range, as compared to petrol.
d) CNG is a substitute for gasoline (petrol) or diesel fuel. It is considered to be

an environmentally "clean" alternative to those fuels. It is made by compressing
methane (CH4) extracted from natural gas. It is stored and distributed in hard
containers, usually cylinders.

RECOMMENDATION
On the behalf of my feasibility report I would like to recommend that this business is
very profitable business. If the resources of natural gas increased and some precaution
are followed then we can easily start a new CNG station.
Government should also make such type of strategies and rules and regulations that a
new investor can easily enter in such type of business. There should be no barred for
entering in this type of business. OGRA and SNGPL should also be helping.
To finance such type of project the banks also provide loan on low interest rate. So
that the investors arrange the finance easily.

CONCLUSION:
The project is technically and financially sounds with ample market

justification. The sponsors are experienced businessmen and enjoy high
credit worthiness. Based on this analysis it may be conducted that the
project is financially and economically viable and suitable proposition for
DEMAND\LEASE FINANCING BY THE BANK.
The business of the company will flourish in the future because now-
a-days CNG has a high demand. We have good expectations from our
Project.
OGRA (oil and gas regulatory authority ) also giving same type of facility
when new CNG station is started banks also provide loan with low interest
rate. And machine is also imported easily. So this is concluded that this
type of business is profitable business.


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AL-KHALIQUE CNG Filling Station Project Appraisal

Course Instructor: Mr. Javaid Iqbal

Program: MSC A&F (Afternoon)

Department Of Commerce 1 IUB

AL-KHALIQUE CNG Filling Station

Department Of Commerce 2 IUB

Department Of Commerce 3 IUB

We dedicate this report to that personality to

Department Of Commerce 4 IUB

Department Of Commerce 5 IUB

Special thanks to Almighty Allah, creator of the creative

Department Of Commerce 6 IUB

Our Mission Statement

Our mission is to provide

Department Of Commerce 7 IUB

3. The Project Introduction 14

4. The Project Site & Location 15

10. Personal Analysis 30

13. Swot Analysis 46

Department Of Commerce 8 IUB

AL-KHALIQUECNG Filling Station

Department Of Commerce 9 IUB

NAME OF THE PROJECT: AL-KHALIQUE CNG STATION

NATURE OF INDUSTRY: CNG STATION

CORPORATE STATUS: PARTNERSHIP FIRM

LOCATION OF PROJECT BAHAWALPUR

ADDRESS NEAR SATLEJ TOLL PLAZA

AL-KHALIQUE CNG STATION registered firm established with the objective of

Department Of Commerce 10 IUB

Estimated cost of project (Rs in 000) =

TOTAL DEBT: 30760

TOTAL DEBT & EQUITY 51260

Department Of Commerce 11 IUB

DEBT : EQUITY RATIO 60 : 40

The sponsors of the project are professionally qualified and have

SR.NO. NAME DESIGNATION

1. Jawad Junaid Managing partner

2. Abd-Ul- Samad Partner

Department Of Commerce 12 IUB

The detail of machinery is given below:

Compressor model skid Mounted

Water Cooled W-Type Compressor

High pressure Piping 3-line

Priority fill Panel Spares

Name of civil contractor :

Name of Machinery Supplier:

Department Of Commerce 13 IUB

Bank approval February 2010

Purchase of land March 2010

Construction of building October 2010

Arrival of machinery at site November 2010

Installation completed December 2010

Trial run December 2010

Commercial operation started January 2011

Department Of Commerce 14 IUB

Department Of Commerce 15 IUB

LOCATION OF THE PROJECT

Easy availability of raw material

Department Of Commerce 16 IUB

NOCs Required For CNG Station

Concerned development authority of the city (Bahawalpur Development

Traffic Engineering and Planning Authority (TEPA)

Traffic Police (SSP)

Department of Civil Defense