Expanding Puntland Petroleum

Puntland Petroleum, established in 2003, is a leading energy provider in Puntland, Somalia. Through a $700,000 investment from the Nordic Fund, facilitated by One Earth Future's Shuraako program, Puntland Petroleum has transformed its operations, addressing storage and capacity constraints, creating jobs, driving economic growth, and championing environmental sustainability.

The Challenge

Puntland Petroleum’s rapid growth highlighted critical operational bottlenecks, particularly in storage capacity, which limited its ability to meet rising demands and expand into new markets. Additionally, the widespread use of charcoal as a primary cooking fuel in the region posed significant environmental challenges, including deforestation and air pollution.

The Solution: Strategic Investment by Shuraako

Recognizing the company’s growth potential and the opportunity to promote cleaner energy, Shuraako facilitated a $700,000 investment through the Nordic Fund. The funding enabled Puntland Petroleum to construct a new facility in Garowe, equipped with advanced infrastructure, including nine LPG cylinder sets, 12-MT storage tanks, electronic filling machines, ISO tanks, a comprehensive firefighting system, and upgraded utilities. This expansion not only resolved storage issues but also allowed the company to increase LPG distribution, reducing reliance on environmentally harmful charcoal.

Achievements Post-Investment:

Job Creation and Workforce Growth
The investment significantly impacted employment. The company’s LPG division, Sahal Gas, expanded from 5 employees in Bosaso to 60 employees, with total staff across all departments reaching 160—a 60% increase in jobs. These jobs include both permanent and temporary roles, contributing to livelihoods and economic stability in the region.

Market Expansion and Increased Sales

Puntland Petroleum’s market share in the gas sector has surged to 50%, making it a dominant player in the region.
The company expanded from one LPG station in Bosaso to nine across Puntland, including two in Garower cooking gas.
The company expanded from one LPG station in Bosaso to nine across Puntland, including two in Garowe, with plans to enter Somaliland and additional Somali regions.

Environmental Protection and Sustainability
The shift from charcoal to LPG as a cooking fuel has had a profound environmental impact. By increasing access to affordable and reliable LPG, Puntland Petroleum has played a critical role in:

Reducing Deforestation: Charcoal production is a leading cause of deforestation in Somalia. The increased use of LPG has alleviated pressure on forests, helping to conserve the environment.

Lowering Air Pollution: Burning LPG produces significantly fewer emissions compared to charcoal, improving air quality and reducing health risks associated with indoor smoke inhalation.

Promoting Cleaner Energy Usage: LPG is a more sustainable and efficient fuel, saving time and energy for households and businesses.

Introduction of New Products and Services
The investment enabled the establishment of LPG fueling stations and modernized infrastructure, improving service delivery and customer satisfaction. The focus on LPG has not only boosted business performance but also promoted environmental awareness across Puntland.

Looking Ahead

With its strengthened capacity and market position, Puntland Petroleum is poised for further growth. The company plans to expand its LPG division into new markets, leveraging its success to continue driving job creation, economic development, and environmental sustainability across the Somali region.