Industrial Gases Dissertation

To Study The Global Market Scenario And Analyze New Applications Of Industrial Gases, UPES
TO STUDY THE GLOBAL MARKET SCENARIO AND ANALYZE NEW APLLICATIONS OF INDUSTRIAL GASES
Dissertation submitted to the College of Management and Economic Studies for the partial fulfillment of the degree of Guided By: Faculty: Prof. S.K POKHRIYAL College of Management & Economic Studies, University of Petroleum & Energy Studies, Dehradun 248006 Submitted By:
AMAN SUD
R-430209005 500008005
College of Management and Economic Studies, University of Petroleum & Energy Studies,
1
Dehradun, Uttarakhand, India

December, 2013
ACKNOWLEDGEMENT
I am honored to take this opportunity in expressing my deep sense of gratitude to Prof. S.K. Pokhriyal for having spared his valuable time and guidance which helped me throughout my research. He was a constant source of inspiration during the study.
I am also thankful to the other teaching staff of University Of Petroleum & Energy Studies without whose support and help, this project wouldnt have been possible. It was only due to their guidance that this project could be brought to this form in time and in an efficient manner.
(Aman Sud)
EXECUTIVE SUMMARY
This report depicts the global scenario of the industrial gas industry with the patterns of their production, consumption and their demand.
This report covers the entire cycle starting from the production of the industrial gases, the quality checks and standards which it should comply with, the distribution channels, the HSE initiatives, and the sale of the gases and finally, the application of the gases in the client companies.
This report covers the applications in which industrial gases play a vital role , Industrial Gases are used in a huge number of industries and their applications are endless.
In order to understand the applications of the industrial gases, one has to know the properties of the gas and then identify areas in which the properties can be beneficial. The properties as well as the areas of applications have been defined in this report.
The main purpose of this report is to throw light on newer possible applications in which industrial gases can be used successfully, profitably and commercially.
The roles of industrial gases as shielding gases in welding applications have been highlighted in this report.
TABLE OF CONTENTS
S.NO. 1 2 TOPIC Research Objectives Introduction 2.1 Background 2.2 Definition of Industrial Gas 2.3 History Review of Literature Research Methodology 4.1 Research Design 4.2 Sampling Design 4.3 Data Collection Findings 5.1Global Market Scenario 5.2Market Segmentation 2.3Industry leaders Manufacture Of Industrial Gases Industrial Gas Business Modes of Supply Application of Industrial Gases Pricing Commercial Practices Critical Success Factors PAGE NO. 3 4-9 4-5 6-7 8-9 10-11 12-13 12 12-13 13 14-80
3 4
6 7 8 9
Conclusion Limitations Scope For Further Studies Bibliography
81-85 86 87 88
LIST OF TABLES S. NO 1 2 3 4 5 6 7 8 9 10 11 TOPIC List of Industrial Gas Companies Air Separation Diagram Nitrogen Membrane Unit Gas Production statistics Composition Of Air Quality Control Flow Diagram Types Of Supply Modes Impact of Cost Factors on Prime Costs Cost Volume Relationship graph Projected Market Sales Global Regional Growth Summary PAGE NO. 22-24 27 29 36 38 44 60 76 79 82 84
1. RESEARCH OBJECTIVES
The objective of the research study can be stated as follows:
1. To study the Global Industrial Gas market scenario. 2. To analyze the pricing, demand and supply patterns of industrial gases. 3. To understand the uses of Industrial gases and the industries or areas it is used in. 4. To study the top market leaders in Industrial gas industry. 5. To find new areas in which industrial gases can be used. 6. To study the value chain of industrial gases involving production, transportation and distribution.
2. INTRODUCTION
2.1 BACKGROUND
Industrial gases are a group of gases which are manufactured commercially and traded for consumptions in other applications. The most common industrial gases are: A) Air Gases 1) Oxygen (O2) 2) Nitrogen (N2) 3) Argon (Ar)
B) Rare Gases 1)Helium (He) 2) Krypton (Kr) 3) Xenon (Xe) 4)Neon(Ne)
C) Other Industrial Gases1) Hydrogen (H2) 2) Carbon monoxide (CO) 3) Carbon dioxide (CO2) 4) Nitrous oxide (N2O) 5) Chlorine (Cl2) 6) Hydrogen chloride (HCL) 7) Sulphur dioxide (SO2) 8) Acetylene (C2H2) 7
9) Methane (CH4) 10) Propane (C3H8). There also are many diverse combinations of these and other gases to meet the requirements of precise applications. The industrial gases industry, caters to a very large number of customers in the entire community. Industrial gases are vital for most of the manufacturing operations. Large amounts of oxygen, nitrogen and argon are used in the metal and steel industry. Marine and the automotive industry use - acetylene, propane, mixtures of fuel gases and oxygen for cutting and soldering. Liquid nitrogen is important for recycling of plastics, packing and scrapping of tires. The chemical industry uses most of the major industrial gases as raw materials for inerting. The smaller market segment comprises of cylinder gas and mixtures. Coming to India, there are currently nearly. 300 small & medium size plants and approx.25 large tonnage plants in the country. These industrial gases are supplied through the pipelines to captive customers in nearby factories; through transportation by cryogenic tanks for bulk deliveries to far away customers; or through cylinders. The up-to-date yearly turnover of the gas industry, not including captive production is around Rs. 3,000 crores, i.e. ($650 million). With greater than before industrialization, the demand pattern of industrial gases is also changing fast. #Modern applications in the food processing industry, agriculture industries, healthcare and technology are increasing at an incredible pace. This has compelled the industry to adopt strict quality control systems and an effective distribution system. 2.2 DEFINITION OF INDUSTRIAL GASES Classification of Gases There are five broad categories of gas: Industrial - gases sold for general (industrial) use; Medical - gases intended for use in the medical field; Special - rare, uncommon or specialty gases used in small quantities; 8
Fuel Gases Refrigerants
- gases such as LPG or its components - gases used in the refrigeration cycle in cooling technologies.
For the purposes of our industry , which has been mainly based on air gases and other associated gases , we focus on the first three but recognise that some of the industrial gases companies have moved into supplying (not producing) the latter two categories. We would also state that Natural Gas is not covered in the true definition of industrial gases and neither is LPG (tonnage, bulk and cylinders for heating and cooking). The industrial category accounts for the majority of the sales by industrial gas companies, in some countries industrial gases are called technical gases to avoid using the same general term for the industry as the industrial sub-group. Although there is not universal agreement on whether certain gases are treated as industrial or special (e.g. welding mixtures), we use the definitions shown below. The Industrial Gases This category covers the traditional gases used in industrial and commercial applications, often in large quantities: The air gases - oxygen, nitrogen, argon, (and air!); dioxide monoxide of any of the above (especially for welding). The Medical Gases This category covers the traditional gases (but not modern anesthetics which are pharmaceuticals) used in medicine medical oxygen and air. Nitrous oxide (traditional anesthetic known as laughing gas). medical carbon dioxide. Breathing mixtures of any of the above and others such as helium (the commonest mixture is oxygen/nitrous oxide, or entonox ) In the case of medical oxygen, air and carbon dioxide, the gas purity is more strictly controlled than for industrial sales.
The Special Gases This category generally includes all the minor gases on general sale which are used in specialized applications or ultra-high purities of the other gases. Often these are purchased in bulk and re-packaged to strict quality standards for re-sale:
Helium The rare or noble air gases - krypton, xenon, neon. Special gas mixtures for the lighting industry. Ultra-pure gases for the electronics industry. Calibration gas mixtures (many of them toxic or flammable)
Other Gases These are gases which the industrial gas companies normally purchase in bulk from and re-package or mix before utilizing their distribution network to sell in smaller lots to their own clients -fuel gases: butane, propane and mixtures; - Refrigerant gases; - fire-fighting gases; 2.3 HISTORY The gases that make up the multibillion-dollar industrial gas industry were discovered by various researchers living in several different countries beginning in the second half of the eighteenth century. Nitrogen was isolated in 1772 by Daniel Rutherford (1749--1819), a British physician. In 1776, it was identified as an elemental gas by the great French chemist Antoine-Laurent Lavoisier (1743--1794). Oxygen was discovered by two chemists working independently in Europe around 1776. English scientist Joseph Priestley (1733--1804) and Swedish chemist Carl Wilhelm Scheele (1742--1786) shared credit for the discovery. During the late 1800s, oxygen was used for medical 10
purposes and put to commercial use in welding. Oxygen was also used to generate limelight for theaters and music halls. Acetylene was discovered in 1863 and first produced commercially in 1892. In 1897, French researcher Georges Claude (1870--1960) discovered a method of dissolving acetylene in acetone at low pressures. Claude's process enabled the development of methods that allowed the movement of the gas via transportation cylinders. The first acetylene-burning torches were developed around 1900. In 1877, two Swiss researchers, Louis-Paul Cailletet (1832--1913) in France and Raoul Pierre-Pictet (1846--1929) generated similar processes for the fractional distillation of liquid air. This procedure made it possible to produce large volumes of oxygen economically. In 1903 the Linde Air Products Company constructed the first commercial oxygen plant in the United States. Events of the early twentieth century demanded increasing amounts of industrial gases. World War I required large amounts of oxygen and acetylene for welding. During World War II pilots of highaltitude aircraft needed oxygen for their flights. Following the wars, researchers used inert gases such as argon and helium in electric arc welding. Growing industrialization in the Western world brought rapid expansion to the gas industry. Oxygen demand continued to increase through the 1950s as steel manufacturers turned to the gas to improve production methods. Maturing uses for nitrogen, previously considered a waste material, developed during the 1960s, along with advances in the uses of helium and argon. The 1970s brought large-scale expansion in the nation's capacity to produce industrial gases. The decade also experienced growth in the use of specialty gases by the electronics industry. By the mid-1980s, the electronics industry used an estimated 15 percent of the nation's nitrogen output. Although demand for nitrogen in 1960 was practically nonexistent, by the early 1990s nitrogen sales surpassed the sales of all other industrial gases. Nitrogen and oxygen sales accounted for approximately 41 percent of the industry's sales in the late 1990s. Carbon dioxide and acetylene ranked third and fourth. Because nitrogen does not readily react with other materials, several industries use it as a "blanketing agent," which is a compound able to prevent unwanted reactions. For example, when nitrogen is used as a blanketing agent with embers, it prevents them from igniting. Nitrogen is therefore used to ensure product quality and improve plant safety. Oil producers use nitrogen to stimulate and pressurize wells. The gas is also valuable in steel processing, food production, cooling, refrigeration and freezing systems, solvent recovery, chemical and glass production, and in the electronics and aerospace industries.
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Measured in terms of sales volume, the second most significant industrial gas in the late 1990s was oxygen, which is used to intensify or control combustion in a variety of industries. Its other uses include speeding fermentation, providing life support, and controlling odors. Chemical manufacturers, brick makers, and metal fabricators all rely on oxygen. Innovative uses include processes aimed at restoring or maintaining environmental integrity. Oxygen is used in hazardous waste cleanup, wastewater treatment facilities, and coal gasification systems (a process designed to reduce the hazardous emissions associated with burning coal). One of the fastest growing areas of oxygen use in the late 1990s, however, was as a replacement for chlorine in bleaching, especially by pulp and paper manufacturers, because the oxygen process pollutes less. Demand for specialty gases such as krypton, xenon, and neon was also growing. Low-power lamps rely on krypton, high-intensity filament lamps and CAT scanners depend on xenon, and neon is necessary for lasers, display lighting, and bar-code scanners. All three rare gases were used for radial keratotomy, a form of laser surgery for eyes.
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3 REVIEW OF LITERATURE
The Global Industrial Analysts Inc. published a complete international report on Industrial and Specialty Gases market. According to this report, the international market for industrial and specialty gases is predicted to reach 11 Trillion Cubic Feet by the year 2017, aided by excellent growth opportunities in electronics, healthcare and energy areas, and the rewarding prospects in the developing markets of the Asia-Pacific region placing special prominence on India and China. The report suggests that the industry currently is concentrating on the growth of new environment friendly technologies and products which are likely to open innovative application markets for industrial gases. The Linde group , which is arguably the global market leader in the Industrial gas segment released a report describing the types of industrial gases produced, the process and equipments involved in their production as well as their uses. According to the report, Industrial gases are produced mainly by air separation, i.e., extracted from the air. A few examples of gases created in this method are nitrogen, oxygen, argon, and other rare gases. However, few gases, inclusive on hydrogen, acetylene, and carbon dioxide, are by-products of other processes. The global market for industrial gases is around $40 billion a year, with the U.S. only at $13 billion. U.S is presently the largest market in Industrial gases. This report mainly focuses on the gases that are produced and sold by the Linde group and have given inadequate information about the other industrial gases. Furthermore, with the advancement in technology, the method of production may also be subject to changes.
bcc report on industrial gas market dated 27 February 2013 described the use of oxygen and nitrogen in the metal and medical segment of industrial gas market and predicted the growth in demand of these gases with the advancement in technology. The article has made predictions with 2017 as the target. It describes the changes in industrial gas distribution that could happen in the future, it also stresses on the growth of this industry in the asia pacific region. The report fails to explore the emerging fields where industrial gases can be used due to the advancements in technologies; it focuses mainly on forecasting the increase in demand of industrial gases in the existing fields 13
According to the Bloomberg group, the industrial gas industry thrives on change; most of its major advances have been as a consequence of change in the technologies served. A typical example is the growth of oxygen demand for steel making which lead to larger ASUs and the availability of nitrogen and more importantly Argon, which lead to further technology change and additional growth. All of the industrial gas companies devote significant RD&T resources to applications technology, often in conjunction with end-users and/or funding authorities. This generates market pull through new and generally more economic approaches to the end-users products. The successful companies in the industry recognize that their primary ambition of profitable growth can only be realized if they understand the needs of the industries served, both current and future, and develop products and services to serve those needs. A key strategic activity is therefore continuing focus on the change agents that can affect the business to seek advantage and eliminate threats.
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4 RESEARCH METHODOLOGY
4.1RESEARCH DESIGN
For this Research, A mixture of Exploratory and Descriptive research design will be used in order to have an in-depth knowledge about the Industrial Gas industry and its various associated industries and also to generate necessary knowledge which can be used future studies about the new applications of industrial gases. Descriptive research design is an effective technique for researching detailed subjects and acts as an initiator to more quantitative studies. While there are some debatable concerns about the statistical validity of this research types, as long as the boundaries are understood by the researcher, this kind of study is an invaluable scientific tool. The whole process including the production, purification, transportation and distribution of industrial gases will be observed and described under this research.
11.2 SAMPLING DESIGN

Judgmental type of sampling will be used in this research. According to judgmental sampling, elements will be selected on the basis of a set group of crite rias set upon the judgment of senior experienced professionals from the industry. For this research, the criteria for selecting the industrial gas companies will be geography, market share. For the second part of the research, that is to find new applications of industrial gases, the elements will be selected on the basis of the new technologies for the application of industrial gas, and their commercial viability. Accordingly, the Major Market leaders in the Industrial gas sector were selected which gave a broad view upon the whole market as they set the tone for the rest of the players.
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Industrial Gases Market by Geography

North America Europe Asia-Pacific Rest of the World (RoW)
According to market share, the companies taken into consideration:

1. Air Liquide 2. Linde AG 3. Praxair 4. Taiyo Nippon Sanso 5. Airgas Inc.
DATA COLLECTION
PRIMARY DATA COLLECTION The Primary Data for this research is collected by interviewing people associated with the industrial gas industry and then collaborating it with the extensive secondary data collected to give a better, wholesome view of the Industrial gas market. S NO 1 2 3 4 5. 16 Name Mr. Deepak Khanna Mr. Kartik Sundaram Mr. Femi Omatayo Stephen Mz. Sheela AK Mr. William J Kroll Designation Marketing head, UAE, EIGC Sales And Marketing, Praxair Quality Control Head Research analyst, Transparency Research Former employee, Taiyo Nippon Sanso
6 7. 8. 9.
Mr. Dominik Heger Mr. Stuart Bestrom Mr. J Barrett Mrs. Patricia A Mattimore
Operations Head (Europe), Linde AG Cryogas International Investor relations, Airgas inc. Supply chain Head , Air Products and Chemicals
10
Mr. Prasoon Ranjan
Head, Sales and Distribution, Maharashtra , Inox air products
SECONDARY DATA COLLECTION The Secondary Data for this research has been gathered from previous Dissertations, newspaper and magazine articles and from verified and reliable sources from the internet
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5. FINDINGS
THE GLOBAL MARKET SCENARIO The reader should note that the global market is defined as the value of gas sales and related services to the end-user. The revenues highlighted exclude any captive (own produced) figures, equipment sales to end-users and welding consumables 5.0.1 SUMMARY OF GLOBAL DEMAND In 1992, the total industrial gases business was valued at US$ 23 billion. In 1997, the world-wide value of the industrial gases market reached US$31 billion Representing an average annual growth over the 5 years of 5.5%. By 2010, the business had grown to US$68 Billion. By 2015, the estimated value of the industrial gas industry is set to reach US $1.2 trillion.
Industrial Gas - Global Demand ($Billion)

120 100 80 60 40 20 0 1992 1997 2001 2010 2015 Industrial Gas - Global Demand
The Global Industrial gas demand was pegged at 9 trillion cubic feet in 2011-2012. It is expected to reach 11 trillion cubic feet by 2015. 18
The Demand is different from different sectors; the split up has been given below:
Industrial gas Global consumption pattern

10 13 Manufacturing 39 Chemicals Metals Electronics 12 Food Healthcare 12 13
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5.2 MARKET SEGMENTATION The World Market is segmented in three regions : 1 NORTH AMERICA In the countries of North America, industrial gases touch virtually every facet of life. The three major atmospheric gases, which are oxygen, nitrogen, and argon, are used in steel production. o Oxygen enhances kiln firing to reduce brick-making costs. o Liquid oxygen and liquid hydrogen fuel rockets. o Nitrogen is used in brewing beer, recycling tires, and applying metallic finishes on toys. o Ammonia is synthesized from nitrogen for use in fertilizers, nitric acid, hydrazine, amines, and urea. It is also important in the production of nitrous oxide (also known as laughing gas) that is used as an anesthetic in some types of surgery. o Liquid nitrogen and liquid carbon dioxide are used to make plastic fittings for moldings, enhance oil recovery from wells, and enable solvent recycling. Argon contributes to stainless steel manufacturing and serves as a component in fluorescent lighting.
According to the U.S. Census Bureau, the industrial gases industry shipped products valued at approximately $9.5 billion in 2007, as compared to $7.3 billion in 2005 and $5.4 billion in 2000. Growth was expected to continue for manufacturers worldwide, as new global markets open and certain market sectors, especially petroleum, healthcare, and electronics, drive demand. The great stress put over the environmental concerns put through by EPA and other U.S bodies have shifted the focus on the use of cleaner technologies. As a result, Hydrogen has been hugely benefitted by the development of the Hydrogen fuel cell technology. The improved technologies in the refining process also increase the demand for hydrogen in the North American sector.
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North America total = $25 Billion

15 28 Specialty gas 21 Nitrogen Oxygen 16 20 Hydrogen Others
2 EUROPE According to the European Industrial Gas Association, (EIGA) Within Europe, the industry employs 45,000 people, has 4 million customers and 4.5 million delivery points. The gas production is approximately 220,000 tons per day. Sol SpA, Praxair, Inc., Air Liquide SA and Air Products and Chemicals, Inc. are the biggest players of the European Industrial Gas industry L'Air Liquide SA, a French company along with the Linde AG group dominates a major part of the global Industrial gas market. With a high proportion of maturing population, the healthcare and food packaging sector are starting to attract huge demands of medical and food grade industrial gases. Meanwhile, the declining industrial sector in Europe along with financial crunches is slowing the demand for Industrial grade gases. Stimulus from the Governments and global financial bodies look towards the revival of these sectors which in turn will add to the demand for the Industrial gases.
3. ASIA PACIFIC In 2011, Asia Pacific led the market in terms of demand due to increasing domestic consumption in India, China and South Korea. The Asia Pacific industrial gases market is expected to grow at a CAGR of over 7% from 2012 to 2018, which is the fastest across all regional markets. Asia-Pacific accounts for almost 40% of the global industrial gases market value. 21
Rise in population and industrialization in BRICS nation will drive the major growth of the industrial gases market. Growth in associated industries such as transportation, food and beverages, metal fabrication and chemical manufacturing are some of the other drivers for the global industrial gases market. However, high costs of transportation and storage of industrial gases is expected to be a key challenge for market participants. Taiyyo Nippon Sanso of Japan holds 35 % of the asia pacific market share. With Growing economies, this sector is witnessing interests from the Industrial Gas majors.
Industrial Gas Market share (Asia -Pacific )
39
35
Taiyyo Nippon Sanso Linde AG Praxair Others
12
14
22
Industrial Gas Market share (North America)

17 12 18 14 17 22 Praxair Air Products Airga Air Liquide Linde Others
4. REST OF THE WORLD The rest of the world is dominated by the majors in some regions while they collaborate with the regional companies in others. The industrial gases cannot be transported over very long distances; therefore the industry is extremely location specific. A company can dominate one market while another dominates the other market. This has paved way for mega consolidation and mergers which enables the companies access to more markets as well as access to new technologies and practices. The Middle East plays an important role in this sector with companies like ROC which has a tie up with Praxair, and Air liquid.
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Industry Leaders
1) Air Products and Chemicals Inc., founded in 1940, pioneered on-site industrial gas manufacturing. The company, which is based in Allentown, Pennsylvania, provides argon, hydrogen, nitrogen, and oxygen to health care facilities and manufacturers, among other industries. It also produces gas containers and equipment. In 2008 Air Products employed some 21,100 workers, and its global sales exceeded $8.2 billion.
2) Praxair Inc. produces such atmospheric gases as oxygen, nitrogen, and argon, as well as process and specialty gases, including carbon dioxide, helium, hydrogen, and acetylene. Praxair, headquartered in Danbury, Connecticut, derives its name from praxis, the Greek word for "practical application," and air, the company's primary raw material. In addition to gas production, Praxair designs, engineers, and constructs cryogenic and non-cryogenic supply systems. The company also provides coatings and related chemical services. In 2008, Praxair had consolidated revenue of $10.7 billion and almost 27,000 employees in 30 countries.
3) Airgas Inc., based in Radnor, Pennsylvania, propelled itself to the top ranks in the industrial gas industry by acquiring more than 400 companies after it was founded in 1982. By 2007, the company was the largest U.S. producer of nitrous oxide and dry ice. In addition, Airgas manufactures such industrial gases as argon, carbon dioxide, helium, hydrogen, oxygen, nitrogen, acetylene, propylene, and propane. The company also produces specialty gases and specialty gas equipment. Airgas continued its acquisition pattern into 2007, when it completed its largest purchase in the packaged gas market, paying $310 million for the U.S. packaged gas business of Linde AG. In 2009 the company had total sales of $4.2 billion and 14,500 employees.
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4) Air Liquide In 1902, the French company L'Air Liquide SA created the first viable process for the liquefaction of gases found in air. Headquartered in Paris, L'Air Liquide entered the U.S. market in 1968. Its American Air Liquide Holdings Inc. subsidiary, based in Houston, Texas, grew significantly with the 2004 acquisition of Messer Grieshiem's North American business. In 2008, Air Liquide SA employed more than 36,900 workers worldwide and posted revenues of $18.4 billion.
5) Taiyo Nippon Sanso Taiyo Nippon Sanso Corporation is a diversified company that makes industrial gases, constructs air separation plants, manufactures gas-handling equipment (including welding tools and high-purity systems for semiconductor production), and house wares. The company markets its products to the food and beverage, shipbuilding, aerospace, chemical, and steel industries. The gas business makes up about two-thirds of its sales with the plant and gas equipment unit accounting for most of the rest. Taiyo Nippon Sanso also maintains the Thermos brand of vacuum bottles and insulated mugs throughout Asia. Subsidiary Matheson Tri-Gas operates in North America, Asia, and Europe.
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5.4 INDIAN MARKET

Major players in India include 1) INOX Air Products Ltd. This is the market leader in India with a market share of 32 %.INOX Air Products Limited is a joint venture company in which the Jain family (former owners of the Industrial Oxygen Company) and Air Products and Chemicals, Inc. (APD) hold an equal stake. All Air Products activities in India are channeled through this company. Head-quartered in Mumbai, INOX Air Products Ltd is one of the largest manufacturers of industrial gases in India with 36 plants spread throughout the country. The company has a workforce of approximately 1200 and has a turnover in excess of $100 Million. INOX Air Products Ltd manufactures and supplies industrial gases including Oxygen, Nitrogen, Helium, Argon, Carbon Dioxide, Hydrogen, and specialty gas mixtures throughout India. The company specializes in providing products, technologies and services to a vast cross-section of industries including the chemical, pharmaceutical, metals, steel, food, waste water treatment, cement, glass, textiles, paint, medical and pulp and paper sectors, to name but a few. 2) BOC India Now known as Linde India after the takeover of BOC by Linde AG is the second largest industrial gas company in India. The takeover has brought new technologies and practices to India which are being expected to capture huge market shares by industry experts. It holds a market share of 16 %. 3) AirLiquide India Holding Pvt Ltd. The Indian subsidiary of the French multinational Air Liquide, Air Liquide India produces a variety of industrial gases servicing many crucial sectors. The main focus of the company in India is on the healthcare and medical sector. It holds a market share of around 18 % 4) Jindal Praxair Oxygen Co. Ltd. Praxair supplies atmospheric, process, and specialty gases as well as high-performance coatings and related services. Praxair serves a wide range of industries including metals, health care, food & beverage, energy, aerospace, chemicals, electronics, manufacturing, and others. It is one the market leaders in the Indian Industrial gas market with a market share of 12 %.
The market for industrial gases is highly fragmented in India, with the presence of domestic companies, multinationals, as well as small players. The majority of the market is held with multinational manufacturers, closely followed by domestic players 26
The Indian gas industry is increasing at an average rate of 12 per cent per annum since the last couple of years, with the industrial oxygen growing consistently at 15-17 per cent per annum. The growth of industrial gas industry can be easily predicted on the basis of estimates of the steel and other metallurgical industry. The demand for steel is seen increasing by 10% in the financial year to march 2013, aided by higher expenditure on infrastructure will remain to drive the growth of the gas industry. Natural gas consists of 9 % of India's total primary energy consumption and it will rise to 18% of energy mix by 2015. There are currently approx. 300 small & medium size plants and approx.25 large tonnage plants in the country. These industrial gases are supplied through the pipelines to captive customers in nearby factories; through transportation by cryogenic tanks for bulk deliveries to far away customers; or through cylinders. The demand for natural gas is also likely to grow at an average yearly growth rate of 7.3%.Metals manufacture and fabrication will continue to be the major market for industrial gases, accounting for approx.31% of overall demand in value terms in approaching years. The second biggest market will be the chemical processing/petroleum refining sector. The medical/healthcare market, although smaller in size, will be the fastest budding and will expect record gains from the growth of healthcare services in developing nations and the fast increasing use of home healthcare respiratory treatments in innovative economics. Hydrogen is getting importance and most companies are endeavoring to develop technologies that can proficiently exploit the potential of hydrogen. Increased use of natural gas will generate an opening for greater production of argon and carbon dioxide. The Industrial gas industry has a very positive future in the upcoming years.
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5.5. MANUFACTURE OF INDUSTRIAL GASES

The industrial gas industry differs from many other types of manufacturing because its raw materials are primarily extracted from the atmosphere. The two principal gases produced by the industry are nitrogen and oxygen. Dry air is composed of 78.1 percent nitrogen, 20.9 percent oxygen, and just under 1 percent argon. All other atmospheric gases, often called rare gases, make up the remaining 0.1 percent. Additional industrial gases such as hydrogen, acetylene, and carbon dioxide are obtained as co-products or by-products of other operations. Production costs within the industry are divided among labor, energy, and distribution. The industry uses three different techniques to separate gases from the atmosphere. Cryogenic methods are the oldest and most widely used. Cryogenic separation relies on cooling and pressurizing the air until it becomes liquid. Oxygen, when held at a pressure of 80 pounds per square inch, liquefies at minus 274 degrees Fahrenheit, while nitrogen liquefies at a colder temperature. As the atmospheric gases liquefy, they are extracted by means of a distillation process. Additional distillation steps are necessary to produce argon and other rare gases such as krypton and xenon. Helium liquefies only at temperatures approaching absolute zero. As a result, cryogenic production is not economically feasible for helium. Most commercially available helium is derived from natural gas rather than from the atmosphere. Two non- cryogenic gas production methods are membrane separation and pressure swing absorption (PSA). Membrane separation uses hollow fibers, most frequently made of organic polymers, to recover gases such as hydrogen from oil refineries or carbon dioxide from natural gas supplies. Pressure swing absorption (PSA) relies on a molecular sieve material that selectively absorbs atmospheric components at specific temperatures and pressures.
. CRYOGENIC AIR SEPARATION The original process developed over 100 years ago, was developed by compression of air followed by rapid expansion that resulted in the cooling down of the air stream. This cooled air was then used to cool down more compressed air in a heat exchanger and which on expansion cooled to 28
an even lower temperature and so on. When the temperature falls below -180oC fractional distillation of liquid air can take place. (Cryogenic means operating at temperatures below -100oC). This cryogenic distillation takes place in a column or tower where the gas components are separated, in an air separation unit (ASU) at very low temperatures and high pressures. Although the basic technology has been used for over a century major developments in the scale and efficiencies of the ASUs has taken place, driven by the gas companies. Figure provides a schematic for an ASU operation to help explain how air is broken down into its components, oxygen and nitrogen and argon. Air is compressed to about 5 bar g and passes through an adsorber bed where water, carbon dioxide and other air contaminants that would be solid at cryogenic temperatures are removed. The air stream is then split into a major and minor portion. The minor portion is further compressed to provide a refrigeration stream. This stream is cooled down in the main heat exchangers before being expanded in a turbine, which drives the compression stage. This expansion causes cooling and provides refrigeration for the plant. The major part of the air is cooled in the main heat exchangers to about -170oC by effluent product streams and waste streams. The components of the air components are separated by distillation in a double column (the various component gases vaporize at different temperatures) from which they are extracted as gas or liquid. If argon is required the side -arm column shown is also used. The gas products leaving the system are warmed to ambient temperature in the main heat exchangers and in doing so they cool down the incoming air. Additional heat exchangers are used at various points in the cycle to optimize efficiency. Although the principle is simple, the engineering is very sophisticated and additional equipment would allow even the rare gases to be separated. Depending on their purpose, ASUs are either built primarily as gas plants for gaseous output (with a small amount available as liquid to storage to provide back up for reliability) or, with additional refrigeration capacity, as liquid plants with much of the output being stored in liquid tanks. Usually they are operated to coproduce oxygen (normally of 99.5% purity), nitrogen (5ppm impurity) and argon since there is a ready market for these gases. However, somewhat simpler ASUs for nitrogen only (nitrogen generators) or oxygen (oxygen generators) which vent the other impure components of air are also manufactured. Occasionally on large plants the rare gases 29
neon and krypton/xenon are also produced. It is not normal to separate helium from air as natural deposits are a cheaper source despite the additional distribution costs entailed. ASUs capacities are normally expressed in metric tons per day (tpd) or cubic metres per hour of oxygen and they can range in size from as little as 5 tpd up to several thousand (currently 4 000) tpd.
Non-Cryogenic Air Separation

The cryogenic process is very power intensive and so over the past 50 years companies have developed a lower power consuming process to separate air. There are two forms of commercially available non-cryogenic air separation technologies which have been developed over the last 30 years and which now provide cost effective solutions under certain limited circumstances:
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Adsorption Pressure swing adsorption (PSA), or VSA (where vacuum is employed) utilize the differential adsorption rate of oxygen and nitrogen by a molecular sieve material (carbon for nitrogen, zeolite for oxygen). They can be used to economically produce oxygen or nitrogen (but not both together) of lower purity (circa 93-98%) in gaseous from only for quantities up to about 100 tpd. A PSA or VSA unit consists of two or more low pressure vessels to hold the molecular sieve, interconnecting pipe-work and switching valves operated by a programmable solid state controller and an air blower/compressor for the air feed. (VSA also includes a vacuum pump). The vessels holding the sieve are pressurized and de-pressurized according to pre-set cycles. There can also be a buffer storage
vessel for the oxygen or nitrogen produced, which is usually at a few atmospheres pressure. Higher purity is gained at the expense of throughput.
Membrane
Membrane methods, which pass the air through narrow hollow polymer fibers whose walls act as semi permeable membranes and allow the oxygen to permeate through. They can be used to produce (circa 95-99% purity) nitrogen in gaseous from in small quantities (but many units can be connected in parallel). A membrane unit usually consists of a number of modules holding the membrane fibres connected to a low pressure air blower which operates continuously rather than cycling as in PSA/VSA. It is even simpler to operate than a nitrogen PSA unit but of somewhat lower purity output. These non-cryogenic technologies are much simpler to operate than the cryogenic ASU method. In terms of power consumption per unit of output (specific power), they can be competitive with smaller ASUs for lower purity gas. However, they do not exhibit the same economies of scale as ASUs since the major cost components are the sieve or membrane, the amount of which is directly proportional to the plant capacity. 31
Consequently, they are currently confined to smaller supply situations or special situations such as sea-going or offshore installations. Whereas the cryogenic technology is mature, these non-cryogenic technologies are still undergoing continual development and pushing out the boundaries at which they can be cost effective. Figure 3.3.2 presents a schematic of a membrane unit.
SCHEMATIC OF A MEMBRANE UNIT
3.3.3 Applicability of Non-Cryogenic Technology. Figure shows the conditions of flow and purity where non-cryogenic nitrogen production technology can effectively compete with cryogenic on basic cost. In practice the impact of these alternative technologies on the business of the industrial gas companies has been wholly favorable. Nearly all installations are owned by industrial gas companies or supplied and serviced by them. The reason is that most users want a reliable supply of gas and therefore need assured back-up supplies, usually of liquid nitrogen or oxygen that can 32
be vaporized to maintain supply when the production plant fails. A number of large blue chip corporations have tried to enter the industrial gas business and have eventually sold out to industrial gas companies, because of the inability of the new entrants to provide back up and the natural unwillingness of the industrial gas companies to support them. Smaller companies have tried to break into niche markets for small volume users based on the smaller companies lower overhead cost position. In the end, these too have been acquired by or formed alliances with industrial gas companies. The industrial gas companies have been pro-active in converting any vulnerable liquid accounts to small gas-supply accounts.
There are enough potential suppliers of such technology, that any industrial gas company can access it and use it when required. The position for oxygen non-cryogenic production is similar, with a further limitation that it is only really competitive at purities below about 93% oxygen. CARBON DIOXIDE (CO2) Carbon Dioxide is available naturally in the ground or is generally produced as a byproduct of a burning (combustion) or chemical process. The sources of carbon dioxide are either by direct manufacture in dedicated plants or by recovery and purification of preexisting impure gas streams: LPG, kerosene, heavy fuel oil, etc.) in a purpose built industrial plant. This is the usual method when natural deposits or byproduct CO2 is unavailable. tap the underground source, which can produce at a good pressure over many years. This can be the most economic source where the well is located close to major consumption center (the market value of the product cannot support long distribution chains). Unfortunately such wells are few in number as they are only present in unusual and often remote geological formations.
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-product of the steam reforming process (a reaction between steam and a hydrocarbon such as methane or methanol, etc.) which is usually employed for producing hydrogen in large quantities as described in the next section. The by-product CO2 can be cheaper than from dedicated combustion plants as hydrogen or carbon monoxide are the high value products. a by-product of fermentation processes, especially beer production. This can be a large source of CO2 but care must be taken to remove any traces of smell, which may taint food products. As a waste stream from sugar cane processing (molasses production). It is difficult to remove the smelly trace compounds to make it of food grade so this source is not much favored. -product of chemical synthesis such as ammonia or ethylene oxide production. This can be a large, cost effective source of CO2 and is a common production source in many countries.
HYDROGEN Hydrogen is used in many chemical reactions and processes (see Section 5.0). Some of these uses in refineries (hydrogen de-sulphurisation) require large quantities (greater than 1 000 nm3/hr.) of hydrogen. Hydrogen can actually be sourced from within refineries or chemical plants as it is produced as a by-product of splitting organic chemicals or polymers. However,
hydrogen can be produced by on-purpose splitting of chemicals or gases e.g. steam reforming or partial oxidation of hydrocarbons. Other methods are only suitable for smallscale production. Steam reforming is the most universally used method for large hydrogen plants. It is a catalytic reaction that converts steam and lighter hydrocarbons, natural gas, LPG or refinery off-gas, into hydrogen and carbon monoxide (syngas). The syngas is shifted in a 34
further reaction to give more hydrogen and carbon dioxide: CH4 + H2O = CO +3H2; CO +H2O = CO2 + H2
reactor and high temperatures if hydrocarbons are unavailable:
CH3OH + H2O = CO2 + 3H2 The first process requires rather expensive metallurgy due to high pressure and high temperature. The viability of the methanol reformer, which is simpler in design, depends crucially on the price of methanol. Both are well established technologies for large plants (they do not scale down well). In partial oxidation, hydrocarbon feed-stock reacts (over a catalyst) with oxygen and steam at a high temperature to produce syngas which has a higher carbon monoxide to hydrogen ratio than that produced by steam reformers making it an ideal source for synthesis of various chemicals. In methanol cracking, methanol vapour is heated in a catalytic bed to produce syngas with little moisture and CO2 (useful for heat treating metal): CH3OH = CO + 2 H2 low): CH3OH = C(soot) + H2O + H2 soot problem this means it has not been widely adopted. Ammonia dissociation takes place at high temperatures in a furnace in the presence of a nickel catalyst: 2NH3 = N2 + 3H2 -established technology for small-scale plants and preferred for applications requiring hydrogen-nitrogen mixtures. Endo generators are well established in heat treating industry. Hydrocarbon feed is mixed with air and passed over a heated nickel catalyst bed. The amount of air (i.e. oxygen) is 35
regulated to prevent the formation of CO2 or H2O: 2CH4 + O2 = 2CO +4 H2 Electrolysis of water is probably the most widely used technology for small-scale production and oxygen is also produced at 99.7% purity. DC power is supplied to a bank of cells containing caustic potash electrolyte. It is not suitable where power costs are very high. HELIUM Helium is a gas which is generally contained in natural gas wells in the ground. The percentage of Helium present in the natural gas varies from negligible to 1-2%. Helium is therefore usually obtained as a by-product of natural gas recovery and liquefaction from natural gas wells. There is a significant recovery of natural gas and in part of the purification process the helium containment becomes enriched and as a result is more viable to recover. The wells with higher percentage presence of helium are limited (e.g. USA, Poland, and Russia). However, the vast recovery and liquefaction plants in the Middle East (Algeria and Qatar) means that while the helium contained is at low levels, the liquefaction process makes recovery viable and economic. Helium is gained from either nitrogen rejection processes (in order to get the calorific value of the gas higher) or from the purge gas stream from liquefaction and separation of NGLs. Nevertheless, it is more economical to recover the helium from these sources and ship it around the globe than attempt to separate it from air where it is only present in minute amounts. ACETYLENE (C2H2) Acetylene is one of the oldest industrial gases used for lighting (now obsolete) and oxyacetylene cutting and welding. It is manufactured commercially by immersing calcium dicarbide (calcium carbide) in water, lime being a by-product.
CaC2 + H2O = C2 H2 + CaO The acetylene gas is pumped into a gas holder before being filled into cylinders. Although acetylene can be liquefied at ordinary temperatures under high pressure, this is 36
not practiced as the liquid is violently explosive. Instead, the cylinders contain a porous mass steeped in acetone in which the acetylene gas dissolves under pressure. NITROUS OXIDE Nitrous oxide is manufactured almost universally by thermal decomposition of ammonium nitrate at around 250OC, the overall process being represented by: NH4NO3-- N2O + 2H2O Following purification the gas is usually held in a gas holder before filling into cylinders where it remains as liquid under its own vapor pressure at ambient temperature. The industrial gas business is described as a service industry because of the heavy emphasis on the supply mode of the business but the production of industrial gases is also important to the industry. Therefore it is important to discuss the methods of manufacturing or recovering gases and what the current trends are. The industry was basically started when air was split into its pure gas components, oxygen, nitrogen and then later argon and rare gases.
THE PURIFICATION PROCESSES

The acetylene and hydrogen manufacturing processes are covered below. The carbon
dioxide is bought in liquid form from the natural gas plant (where it is a by-product of their process). Nitrogen, oxygen and argon are all extracted from the fractional distillation of air, so these gases are all covered together. capacity are given in Table 3.3.1
Table 3.3.1 - Gas production statistics
Overall figures for purity and production
GAS ACETYLENE HYDROGEN CARBON DIOXIDE NITROGEN OXYGEN ARGON 37
PURITY% 99.5 99.999 99.98 99.999 99.5 99.999
CONTAMINANTS Traces of air Low level of NH3 O2 Traces of air and hydrocarbons Ar, O2 N2,H2O,Ar,CH4 N2,O2,H2O
Acetylene Acetylene is manufactured by the action of water on calcium carbide: CaC2 + 2H2O C2H2 + Ca(OH)2 A sealed hopper is kept filled with crushed calcium carbide (imported mainly from Norway)and a slow moving worm carries the solid forward to fall into a three metre high reaction vessel. The reaction occurs spontaneously on mixing and the gas formed passes via. a hydraulic main to a gas holder where it is stored above water. The addition of water to the reaction vessel is regulated manually. If the gas production becomes too rapid the reaction is slowed by the addition of more water, which lowers the temperature and hence the rate. The acetylene flows from the gas holder through a series of trays containing mainly ferric chloride to remove impurities such as hydrogen sulfide, phosphine and ammonia.
The gas then passes through a drier containing calcium chloride. It is then compressed to 20 atmospheres and passed through another bed of calcium chloride to remove the last traces of water. The compressed gas is then pumped into cylinders or tankers where it dissolves in acetone to ensure it can be transported and handled safely. Atmosphere, while the hydrogen is further treated. It is compressed to 172 bar and heated to 90oC (the compression alone heats it to about 70oC) and passed over a mixture of palladium and alumina. Any contaminating oxygen is catalytically reduced to water, but the gas is of a sufficiently high temperature to prevent this from condensing out and deactivating the catalyst. The gas is then dried over a mixture of alumina and silica gel then passed through a gas filter, compressed and pumped into cylinders or tankers.
Carbon dioxide . In addition to selling it in liquid form some is converted into dry-ice, solid CO2 which sublimes at atmospheric pressure at -78oC. (Sublimation is the process of a solid changing to a gas without going through a liquid form.) To make dry-ice the liquid is rapidly depressurized, causing some of the CO2 to solidify and the rest to be vented as a gas. The gaseous fraction is collected and recycled for both economic and environmental reasons. The CO2 'snow' is then compressed into pellets and sold to industry.
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The fractional distillation of air Air is composed largely of nitrogen, with a significant amount of oxygen and traces of the noble gases and other compounds (Table 2). Nitrogen, oxygen and argon are separated on the basis of boiling point and any compounds that will interfere with the end uses are removed before distribution. Table 3.3.2 - The average composition of air GAS NITROGEN OXYGEN ARGON CARBON DIOXIDE NEON HELIUM KRYPTON XENON HYDROGEN NITROUS OXIDE WATER (H20) % BY VOLUME 78.08 20.95 0.93 0.035 0.00182 0.00052 0.00011 0.00009 0.0005 0.00005 Upto 4.0 BOILING POINT/Celsius -196 -183 -186 -78 -246 -269 -159 -108 -253 -88 1000
*Carbon dioxide does not boil; it sublimes (i.e. goes from a solid to a gas without passing through a
liquid phase). This is the sublimation point (rather than boiling point) of carbon dioxide.
The separation involves liquefaction of air followed by fractional distillation. Nitrogen (which has a lower boiling point) is more volatile than oxygen or argon. Water and carbon dioxide must be
removed, and oxygen must be removed from the argon and nitrogen streams (as these are used as blankets to prevent oxidation) but the other constituents need not be because of their low concentration and inertness. Several important principles are involved in the process and are summarized below: When work is done on air, by compressing it, it becomes hotter. When compressed air is expanded through and opening or valve it becomes cooler.
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When air is expanded in a turbine it does work on the rotors and cools by approximately ten times as much as in simple expansion. When a mixture of liquids is in equilibrium with its vapor, the vapor above the liquid is richer in the more volatile component (i.e. more of the lower boiling liquid vaporizes). The boiling point of a liquid is lower at lower pressure. Liquefaction At the plant , air is drawn in from the atmosphere and passed through a series of compression stages which increase the pressure to about 6 atmospheres as isothermally as possible, the final temperature being ~30oC. To keep the temperature down the air is passed through water coolers after each of the first three compression cycles. After the 5th stage the compressed gas passes through a direct cooler, i.e. it is in contact with the cooling water. It then passes through a reversible heat exchanger of a honeycomb design where the coolant, flowing in a different pipe and in the reverse direction, is cold nitrogen gas at -167oC and 0.5 atm pressure from the fractionating column. The temperature of the air at the mid-pont is ~ -105oC and -165oC when it emerges. During this process carbon dioxide and water vapor freeze out from the air stream on to the cold surface. To prevent these blocking the pipe the flow streams are reversed every 12 minutes, i.e. the cold nitrogen flows through the pipe that had carried the air stream and vice versa. The lower pressure nitrogen stream removes the ice and solids CO2. This fully compressed air now enters the main heat exchange block. This block has pipes for several different gas streams. The coolants of this block are waste N2 and O2 from the fractionating column and 10% of the air stream which is taken from the near the bottom of the lower fractionating column. The 10% air stream emerging from the main heat exchanger passes through the expansion turbine and cools to -162oC by doing work on the rotor blades as it undergoes a pressure drop from 6 to 0.5 atm. This turbine drives a generator and power is returned to the national grid. This further cooled air then goes back to the reversible heat exchanger. After passing through the heat exchangers the air is now cooled to just above the dew point and enters the bottom of the first and lower fractionating column.
Fractional distillation The liquid air is fractionally distilled to separate the more volatile nitrogen from the less volatile oxygen according to the fourth principle mentioned earlier. The air separation unit consists of two columns (lower and upper) in which a large number of successive distillations and condensations can be carried out on a continuous basis. The columns contain a series of horizontal metal trays, 40
each containing a number of small holes and two drain pipes to the tray below. Liquid is held on the trays while vapor bubbles up through the holes with sufficient velocity to prevent the liquid dripping back. The vapor entering a tray from beneath is warmer than the liquid on the tray, with the result that some of the vapor condenses and some of the liquid vaporizes and rises to the tray above. The vapor evaporating from each tray is richer in nitrogen than is the liquid remaining. Consequently, as we proceed up the columns, both liquid and vapor phases become enriched in nitrogen, while the oxygen concentration increases towards the bottom of the columns. The lower column with ~25 trays operates at six atmospheres pressure and yields a liquid at the bottom at a temperature of -180oC containing 30 - 35% oxygen. This is run off, passed through an expansion valve causing a pressure drop to 0.4 atmospheres and run into the upper column with ~75 trays about two thirds of the way up. Almost pure liquid oxygen collects at the bottom of the upper column at -180oC. This liquid is divided by thin walls from the top of the lower column. Because the lower column is run at higher pressure this temperature is low enough to condense the gaseous nitrogen at the top of the lower column since at six atmospheres pressure the boiling point of nitrogen is -177oC (principle 5). Thus liquid nitrogen containing < 10 vpm2 oxygen is run off at the top of the lower column, and the heat exchanged causes oxygen vapor to rise up the upper column. Some of this liquid nitrogen is run off to storage while the remainder passes through an expansion valve into the top of the upper column. Gaseous nitrogen is continuously drawn off from the top of this column at -193oC, used in heat exchangers as previously described and then discharged to the atmosphere. The plant produces oxygen at very high purity, while a minor amount of the oxygen originally in the air goes to waste with nitrogen. If a single stage column were used, 40% of the oxygen would be lost. Oxygen is then removed from the argon stream by Pd catalyzed reaction with hydrogen, and then the moisture from this process is removed with alumina ready for cylinder filling.
Cylinder filling All gases for lower volume industrial applications are dispatched from factories in cylinders. These come in an assortment of sizes from A (the smallest) to G (the largest). coded for identification.. The cylinders are all color
Before it is filled a cylinder to contain liquefied gas is put onto very Many applications
sensitive scales and filled through a valve until the correct weight is reached.
require a mixture of gases and these are calculated by adding the correct weight of one gas then the next. Once the cylinder is filled the liquid gas in the filling tube is vented off (to prevent it from expanding and destroying the tube) and the cylinder sealed. It is then daubed with soapy water so that the person 41
filling the cylinder can easily see if it has any leaks. Cylinders containing compressed gas are filled to the required pressure. Some gases stored in liquid form must be kept in heat-insulated cylinders and kept at low temperatures. e.g. N2, O2, Ar, air. As the density of a liquid is greater than that of a gas, much bigger amounts can be stored and transported in the liquid form.
PLANT SAFETY
Great care must be taken around the hydrogen and acetylene plants to prevent fires, as these are both highly flammable substances. Stringent controls are maintained over sources of ignition and In some cases metal tools are made of
incompatible materials such as oil around the oxygen plant.
bronze (rather than steel) so that they don't give off sparks during use, cigarettes are not allowed and cell phones etc. must be turned off. In the acetylene plant there is also danger from the calcium carbide as it gives off a large volume of acetylene gas when wet so it must be stored in the complete absence of moisture. THE ROLE OF THE LABORATORY The laboratory is involved exclusively in quality control testing. The laboratory is equipped with gas chromatographs, and FTIR spectrophotometer and analyzers for oxygen and moisture. Samples of all gases are tested in one of the gas chromatographs to ensure that their composition is within the acceptable limits of the required composition, and the other tests are carried out as necessary. Depending on the grade a bulk batch of gas may be analyzed, or the composition of each individual cylinder determined. The latter is used for the highest quality grades and for low volume special mixtures of specified composition required for medical purposes or for calibration of analytical equipment for example.
QUALITY CONTROL
The aim of the Quality control department is to ensure that the products quality matches those of the CGA standards, the customer requirements or the customer specifications.
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For this, the products purity levels, the mixture composition and the presence of trace impurities are checked.
ROLE OF QUALITY CONTROL

1. The Quality Control department is the certifying authority which issues the Analysis certificates for the product containment, if it passes the set CGA standards. 2. It is essential for maintaining the quality of the products that are produced by the company. 3. To ensure that the product is suitable and is according to the standards and requirements of the customers. 4. The department is essential in the creation of specialty mixture gas sample cylinders for attracting new clients.
EQUIPMENTS USED FOR QUALITY CONTROL

1. Dragger tubes They are used for conducting general checks for the presence of any impurities in the sample. They work within a specific range and might not be very sensitive for detecting the minutest of the trace impurities. Therefore, they are not very precise. They indicate the presence of impurities through color changes. 2. Dewpoint meter The Dew point meter is used to check for the moisture levels in the product. These devices give a precise reading in terms of parts per million (ppm) or in oC equivalent. 3. O2 Percentage Analyzer These instruments can be analog (Servomex) or digital (Advanced instruments). They are used to check the purity level of a product. For eg : For O2, it will check for the percentage of O2 in the sample, rest being the impurities. This can differentiate between the various grades of the products. The percentage analyzers work on the principle of para-magnetism where the O2 gets attracted to one end while the impurities are attracted to the other. 4. Thermo Multi-Gas Analyzers 43
This device is used to check the composition of two-gas mixtures. For e.g.: In a 20% CO2 Argon cylinder, the device will calculate the percentage of CO2 with the balance being argon. This can be used for multiple gases in two-gas mixture combinations. 5. Gas Chromatograph Analyzers These are the devices which precisely check for the presence of trace impurities in a sample. The device uses different types of carrier gases which are inert in order to get the sample and to analyze those using different principles. The analyzers differ from one another on the basis of the principle used. The different principles on which the Gas Chromatograph Analyzers work are: a) DID DID stands for the Discharge Ionization Detectors. This is used for checking for trace impurities in high-purity gases such as Medical O2 . These use Helium Grade-6 as the carrier gas. b) FID FID stands for the Flame Ionization Detectors. These check for the trace impurities by analyzing the flammability properties of the different components in the sample. The FID analyzers use Grade-5 Helium as the carrier gas. b.1) ABO Gas These are the Gas Chromatograph Analyzers which work on the FID principle to check for the presence of trace amount of hydrocarbons in Aviator Breathing O2 (ABO). c) TCD TCD stands for Thermal Conductivity Detector. These are used to check the accurate multiple mixture composition of the specialty mixture gases. The TCD analyzers use grade-5 Helium as the carrier gas.
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QUALITY CONTROL PROCESS: 3.5.1 Flow Diagram CUSTOMER REQUIREMENT
SALES & MARKETING
OPERATIONS
Specifications
PRODUCTION
Feedback & Recommendations
QUALITY CONTROL
Cylinder Quality
DISTRIBUTION
Delivery
CUSTOMER
The Customer states the specifications or the requirements of the gases or the specialty mixture it needs to the Sales and Marketing department of the company. The Marketing Department of the company then forwards the request to the Operations department which consists of the Production department and the Quality Control department which interact with each other to produce the required product.
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The Production department produces the product and then sends a sample to the Quality Control department where it is checked for impurities and the composition of the gases is checked. If the product matches the customer specifications and the general CGA standards, then the Quality Control department issues an Analysis certificate for the product. Otherwise, it sends the necessary recommendations to the Production Department. If the product passes the standards, then it is sent to the Distribution department. The mode of distribution and its quality is monitored by the Quality control department. The Distribution department finally gets the product to the consumers. The Quality Control department formulates the Gas Test Plan which includes all the details like how the samples need to be collected. Some products are checked using an online analyzer, while high purity products like Medical O2 have more stringent procedures. Furthermore, it describes all the standards with which a product has to comply with in order to be passed by the Quality Control department. For e.g. For Medical O2, Online analyzers are used for continuous monitoring and the O2 assay should be minimum 99.6% with trace impurities like H2O up to 10 PPM, ENVIRONMENTAL IMPLICATIONS
Gas production is largely an extremely environmentally-friendly industry.
With the exception of
acetylene and hydrogen production, the processes concerned produce no waste. In acetylene production the waste produced is lime, which creates a small disposal problem, but most of it is used in water treatment. The only waste in hydrogen production is oxygen, which is naturally present in air and so does not create a problem. When the gases are used, again there is little environmental damage. Nitrogen, oxygen and argon are simply different fractions of air, so returning them to the air has no detrimental effect. Hydrogen is
also present in air, and is harmless. Carbon dioxide and acetylene (which is burnt, giving off carbon dioxide and water) are of more concern, but still do not cause serious damage. Any carbon dioxide 46
that doesn't form into dry ice pellets is recycled on site. The only two areas of concern are energy consumption and the use, at Glenbrook, of large volumes of cooling water.
5.6 DEFINITION OF THE INDUSTRIAL GASES BUSINESS

4.1Definition of Industry The supply of industrial gas and related services by three supply modes; on-site and pipeline, bulk and packaged gases (cylinders), to an end-user (consumer). It does not include equipment sales (gas production plant, application technologies or cutting & welding equipment)It does not include associated business, such as power generation and engineering, nor dedicated LPG and natural gas businesses. It is important to note that industries often can operate without using industrial gases but :Industries generally operate their processes, more efficiently, more cost effectively and have lower environmental impact with the use of the industrial gases. The industrial gases business can be split into 4 lines of business (LOB) :-
-site/ pipeline supply (OSP)
Other equipment and services Most of the major gas companies market their businesses by regions and by markets supplied, but manage their cost base through their lines of business or supply mode. Although most of the major gas companies recognized the advantage this and have re-structured accordingly, others are just doing so and some still do not appreciate or understand this concept: A modern Industrial Gas company manages its costs by line of business but manages its growth by market sector. 47
SALE OF GAS VERSUS CAPTIVE SUPPLY (BUY V MAKE)

a) The End-User
An end-user of industrial gases has a fundamental decision to make, does it or can it produce its own gas or does it purchase from a supplier? As industrial gases are generally used as part of its overall operation, the end-user needs to assess the cost of producing that gas (and the capital investment required) versus the opportunity o purchase its gaseous requirements. Since the end-user may be a small consumer of gases (a few cubic meters), the decision is straight forward; it would not be economic. If the end-user demand is moderate to high the question becomes more relevant and then depends on the type of gas required. Production by an end-user for its own consumption is termed captive or in-house. In recent years in-house production has either been limited to major producers of steel and chemicals (where large volumes of gas are required) or limited to those companies requiring smaller quantities of less pure gases which may also be in an isolated location (e.g. oil rigs, food packaging factories etc.). Industrial gases companies are those that sell gases to end-users. Increasingly, even large users turned to the specialist gas companies for their supplies as economies of scale meant that medium scale users could not produce cost effectively (although more recent non-cryogenic technology is beginning to displace merchant supplies for some applications.
However, in a few large nations such as CIS states and China, most production is still captive and of total world capacity about 50% still falls into this category - but it is reducing all the time. In analyzing the make-up of the industrial gases business, it is primarily the merchant market which will be addressed. However, merchant market growth can be influenced by the conversion of in-house production to merchant suppliers. b)Supplier of Gases In general, a gas company is one who produces and distributes gases in whatever from to the enduser. However, the distribution channel may involve direct supply to the customer (the retail business) or it may involve intermediate companies who distribute the gases from the gas producer to the end-user, these are generally classified as distributors or in some cases agents. In the latter two cases the gas producer may wholesale gas products to the distributor who then retails the gases to the end-user. 48
GAS MIXTURES
Gas mixtures are prepared using mixing various gases together, under safe and controlled conditions. Mixing panels, together with either volumetric or gravimetric measuring systems are used by companies to determine the right gas mixture combination and specifications. For classification of gases, particularly related to specialty gases, quality checks use gas chromatography for certification. The most widely used mixtures are for medical purposes or for welding and cutting processes.
MODES OF SUPPLY
In principle, the gases can be distributed in gaseous, liquid or solid forms. In practice, the only one to be sold in solid from is carbon dioxide when it is referred to as dry ice. In general the gases are delivered in one or more of three ways: By pipeline as gas to major consumers (on-site or pipeline supply) As bulk products to liquid in cryogenic tanks transported by road, rail or sea; gas in tube trailers transported by road As packaged gas in compressed high pressure gas cylinders , the contents may be liquid (CO2 or acetylene) with gas vaporized as the valve is opened) or small even liquid Dewars or liquid cylinders. Cylinders are delivered by road or are collected by the customer from the Gas Company or distributor.
A breakdown of gases volumes supplied would show onsite and pipeline to be the largest and packaged gases, in cylinders, the smallest, because of their relative prices. Onsite and pipeline having the lowest price per ton and packaged compressed gases the highest. The proportion of sales in these categories in any national market depends upon the stage of economic development of the country. In under-developed economies, packaged compressed gases for small scale industries can represent the largest sector, whereas highly developed economies which have large process industries will have substantial demand for pipeline and liquid supplies. However, as labor costs are less but capital costs higher in underdeveloped countries, the price differential between the supply modes tend to be somewhat less. (This also limits the growth of bulk and on-site volumes.)
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PIPELINE/ON-SITE SUPPLIES
On-site/pipeline (OSP) supplies are the preferred (and least cost solution) where some or all of the following conditions exist for the major air gases, carbon dioxide and hydrogen: the gas;
-preferably steady volumes for 24 hours a day mirroring production plant operating patterns. OSP refers two type modes of supply of gaseous product. The first being supplied from a pipeline network connected to centrally located ASU(s), hydrogen or carbon dioxide production plants which can supply a cluster of customers from the same plant. By producing large (sometimes called tonnage) volumes in the gaseous state, production costs (especially power) are minimized since the costs of liquefaction can be somewhat reduced or avoided and pipeline distribution costs (product compression power and pipeline capital cost amortized over several years) are normally lower than liquid distribution costs. The second mode or terminology is called on-site supply, in which the gas production plant is either located on the customers site or on the other side of the fence (immediately outside the customers boundary). However if the consumer owns and operates his own plant it is an in-house or captive supply in which the gas company has no interest apart from the possible plant sale or management agreement. Pipeline supplies are often backed up by reserves of liquid gas which can be vaporized and fed into the pipeline should there be a peak in demand or production plant shut-down. In the case of air gases, on-site supplies, particularly those that do not require liquid back-up, can be from non-cryogenic as well as cryogenic plant, if the purity and scale of plant is appropriate. A large, centrally located gas companys ASU can provide a least cost solution for 50
pipeline customers if (as is usual) the gas company can utilize most of the co-produced oxygen, nitrogen and argon for a number of customers, (liquid and compressed as well as pipeline) along with benefiting from economies of scale. This is the economic rationale on which tonnage supply schemes (long-term pipeline supply contracts between the gas company and pipeline customer) have developed. The major (Tier 1) industrial gas companies are also developing the utility islands concept whereby they supply steam and power alongside the traditional gases to a cluster of customers.
BULK GASES
ASU plants producing liquid were developed in the 1950s which allowed the cryogenic properties of nitrogen to be exploited. They also provided a means of converting larger packaged gases customers to a lower cost solution. Such customers may not have sufficient volume or the steady demand pattern required for an OSP supply but their demand is large enough for the capital costs of liquid storage tanks to be more than offset by the lower production and distribution costs of bulk supplies. Alternatively, they may need to use the cold properties of the liquid. Helium, carbon dioxide and nitrous oxide are also frequently shipped as bulk liquids. The basic concept is that the liquid gas is transferred from a holding storage tank at the gas companys production site, into a double skinned tanker, usually able to take between 10 and 20 metric tons of products. The liquid is maintained by the insulated
tank which operates at between 2 -15 bar pressure, depending on the gas. The delivery tanker (usually road but can be rail) transports the liquid gas to the customers site from where the liquid gas is transferred to a storage tank via pressure fill or cryogenic pump. There are examples of bulk delivery in a tube trailer, which consists of horizontal high-pressure cylinders or tubes, which are charges with gas to much higher pressures. This mode of transport is favored if the end use is in high pressure gas. 51
PACKAGED GASES
Packaged gas, mostly in the form of cylinder gases, was the traditional wa y of selling industrial and medical gases in small volumes. In terms of supply volumes it is at the opposite end of the spectrum to pipeline supplies and is still the most cost effective supply mode where customers have small demands. Typically, gas cylinders are made of steel (or possibly aluminium) and weigh about 50 kgs empty. The water volume content is usually between 40 and 50 liters capacity. Depending on the type of cylinder and age, cylinders can be charged with gas to between 150 bar and 300 bar pressure. It is common to find pressures at between 150 and 175 bar in developing countries where the cylinders are not as good quality or to western specification. charging pressures. In Western Europe, there is a trend towards using cylinders which can be charged up to 300 bar pressure. This makes a difference of a gas content ranging between 6.5 cubic Higher average ambient temperatures also play a factor in the
meters to over 10 cubic meters. Specialty gases invariably fall into this category, but small repair shops and fabricators and many medical applications also take cylinder supplies. Gas companies also have developed concepts of packing or bundling cylinders together (in a steel frame and manifold in order to transport a greater number of cylinders to a slightly higher consumer of gases. Another option is the use of liquid cylinders which are vacuum insulated tanks (mini) made of stainless steel and contain liquid gases under pressure (5-15 bars). This is an
effective from of supply as a liquid cylinder can contain as much as 15 - 18 HP cylinders worth of gas. Hydrogen is usually supplied as compressed gas either in normal cylinders (singly or in cylinder bundles which can be on dedicated trailers) as liquefaction costs are very high. (One exception is the space industry where rocket fuel must be held in liquid form) 52
5.0.1 TYPES OF SUPPLY MODES
APPLICATIONS OF INDUSTRIAL GASES

COMPOSITION OF AIR
As the air gases are so important in industry and their manufacture mostly depends on air separation technologies, we shall begin with a review of the gaseous components of air and their boiling points at normal barometric pressure, together with an indication of whether the cryogenic air separation unit (ASU) can be employed: TABLE 7.0.1 GASEOUS COMPOSITION OF AIR 53
NITROGEN OXYGEN ARGON CARBON DIOXIDE NEON HELIUM KRYPTON xenon HYDROGEN
Symbol N2 O2 Ar CO2 Ne He Kr Xe H2
State Active Active Inert Active Inert Inert Inert Inert Active
Percentage 78.0840 20.94 9.34 3.00 .18 .5 .01 0.09 0.5
Freezing point -195.76 -182.96 -185.86 -78.47 -246.98 -268.93 -153.34 -108.11 -252.88
Common impurities found in air are water vapour , methane, carbon monoxide, sulphur dioxide, nitrous oxide, ozone, nitrogen dioxide, radon and nitric oxide. In addition there can be dust, pollen and local pollutants from industrial and chemical processes, vehicle exhausts, etc. It will be seen that the main constituents of air are nitrogen (78%), oxygen (21%) and to a lesser extent argon (0.9%). The other constituents are minute in comparison. Nonetheless, special steps have to be taken in the cryogenic production process to remove the impurities and CO2 from the air before liquefaction. It will be seen from the above table that the three major constituents, nitrogen, oxygen and argon have boiling points, which are quite similar. This is convenient for the cryogenic process (fractional distillation of air) where these three products are usually co-produced in the ASU. Normally, the other constituents of air are vented in a waste product stream, although in small measure they remain as impurities in the main product. Occasionally, where the plant size is sufficient to make the process economic, the rare gases - neon, krypton, xenon are also distilled from the air in specialized side columns operating in the appropriate temperature range. Given their very low boiling points close to absolute zero (-273 OC) and small concentrations, helium and hydrogen are not recovered from air but obtained by other means. CO2 is removed as an impurity prior to air separation in an ASU and is manufactured by different and more economic processes.
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APPLICATIONS 7.1 NITROGEN In the early years of the industrial gases business, oxygen was the main product along with acetylene. Although this is still the case in developed markets, generally speaking the volume of nitrogen sold is now well in excess of oxygen. There are three key properties of nitrogen from which its main uses arise: It is impossible to list every single application of nitrogen), but market sectors and the major applications which rely on the inert or non-toxic characteristics of nitrogen and/or the cryogenic properties of the liquefied gas include (but are not limited to): a Food and Beverage: Food preservation(controlled atmospheres for packaging or MAP - modified atmosphere packaging), storage/blanketing of fresh produce and beverages in warehouses, storage silos, liquid tanks, cellars, etc. and transport of fresh foods and beverages under conditions of controlled atmosphere (composition and temperature) for national and international distribution. These techniques provide a means of keeping food fresh in the best possible condition throughout the food chain from the point of harvesting to point of consumption in the home, thus increasing shelf life of the food products. Food freezing and chilling rely on both the non-toxic and cold properties of liquid nitrogen. In many countries, food freezing/chilling is the largest single application for liquid nitrogen. Although carbon dioxide and mechanical refrigeration methods can be employed, liquid nitrogen has advantages in speed of freezing (and therefore in quality and productivity measures). Food freezing/chilling can be performed at the initial food preparation stage, or at the food processing stage through to the distribution chain of the food (in-transit refrigeration). Freeze grinding is a relatively minor use but it can also be employed in spice grinding to improve the quality of the spices. B Metals a)Primary Metal Production In steel-making nitrogen, which is relatively inert, can be used for ladle stirring, reduced oxygen atmospheres in pouring stages and stainless steel production. b)Secondary Metal Production It is used in controlled atmospheres for annealing (toughening by heat treatment), galvanizing, hardening and tempering. In powder technologies such anatomizing, brazing, and thermal spraying. 55
Liquid nitrogen is used in the shrink fitting of metals. c Glass Substantial quantities of gaseous nitrogen, mixed with about 5% hydrogen, are used in float glass manufacture to create an oxygen free reducing atmosphere where the molten glass floats on the tin. d Chemicals & Petroleum The inert properties of nitrogen are crucial for safe operations in many chemical and petroleum plant processes and these industries represent a very substantial market for nitrogen. The uses mainly fall under the headings of inerting/blanketing, purging, pressure transfer of products and pressure testing. In addition it can be used in chemical synthesis, for cooling to control chemical reactions and for adding to natural gas to control the calorific value of towns gas supplies. Liquid nitrogen can be employed in solvent recovery and recycling of chemicals. It is also used in enhanced oil recovery to force oil from difficult or nearly exhausted wells. e Electronics The electronics industry is a major consumer of nitrogen, particularly in the manufacture of microchips (where special gases are also important) and the production of high quality circuit boards. Other such applications classified under electronics are light bulb manufacture, fiber optics etc. f Other Processes It can be used for cooling purposes in concrete mixing, soil freezing, blow molding of plastic and glass containers and blown plastic film. As a liquid it is also used in cryosurgery, cryogenic storage of organs and biotechnology. Another liquid application is fog dispersal. Nitrogen is also used as an assist gas in laser cutting and for light bulbs (mixed with argon). It is used as a fire suppressant in mine fires and for filling aircraft tires. In the oil industry nitrogen can be used for the purging and cleaning of pipelines and also in enhanced oil recovery.
7.2 OXYGEN Oxygen is a very reactive gas and features in a variety of chemical (oxidation) processes. It also possesses two remarkable properties - it supports combustion and is essential to life. Oxygen was the foundation stone of industrial gases as it has been used in welding and medicine since the turn of the century. Today, chemical processes, combustion and environmental applications have expanded the market enormously:
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a Chemicals and Petroleum Oxygen is used as either an effective substitute for air or an enriching agent to air in the production of several commodity chemicals and petrochemicals (vinyl chloride, vinyl acetate, propylene oxide and ethylene oxide to name a few). It can also be used in the de-bottlenecking of refinery fluidized catalytic cracking units by oxygen enrichment and Claus sulphur recovery plants. Other major uses include the use in primary or secondary reforming operations and partial oxidation processes which are commonly used in the production of ammonia, methanol and hydrogen. Oxygen can also be used in the production of inorganic products such as Titanium Dioxide, Carbon Black and Nitric Acid etc. These are usually consumed in tonnage volumes, which require large ASU production supplies. b Metals a)Primary Metal Production The steel industry is the largest user of oxygen world-wide. Processes which originally utilized air have been vastly improved by using oxygen in the reaction and new oxygen based processes have been invented. As a result the tonnage of oxygen used per ton of steel produced has steadily (and sometimes dramatically) risen through the decades. In integrated steel plants oxygen is used for enrichment in blast furnaces and in BOS (basic oxygen steel-making) converters to produce the molten steel. New technologies in blast furnace operation, such as oxy-coal injection (to avoid expensive and polluting coke ovens) increase the oxygen requirement. The Corex process which is an innovative large scale steel-making process consumes almost one tonne of oxygen per ton of steel and utilizes the largest cryogenic air separation units which can be built. On a smaller scale, electric arc furnaces (EAF) require oxygen (enriched air) to be introduced into the furnace. This requirement can be met by a pipeline supply, onsite supply from an oxygen generator (cryogenic) or oxygen PSA plants or vaporized liquid oxygen, depending on the volume of demand. Oxygen is widely used in oxy-fuel burners in the smelting of ores (Copper, Nickel and Zinc) and in specialist applications such as gold recovery from tailings where it reduces cyanide usage and increases the leaching rate. b)Secondary Metal Fabrication Oxygen is used in secondary metal fabrication in enhanced furnace heating technologies in which it increases furnace temperatures whilst reducing fuel usage. c Other Combustion Processes Oxygen is widely used in other furnace enrichment and oxy-fuel burning applications where it 57
improves fuel economics, heat transfer rates and reduces unwanted Nitrous Oxides (NOX) emissions. Besides steelworks it is used in glass furnaces, cupolas and ceramics and brick-making. Oxygen is used in fluidized combustion processes, particularly coal gasification for combined heat and power plants or the production of synthetic fuels. It is also used in incinerators for solid waste disposal. d Fabrication Welding and cutting operations are traditional users of oxygen. It is used in oxyacetylene welding, oxy-cutting, brazing, flame hardening, re-heating and molding. The users are in shipbuilding, engineering industries, building, assembly, metal fabrication, ship-breaking and scrap yards. e Environmental Oxygen is used in water purification processes. This includes the oxygenation of rivers, the treatment of sewage, and the purification of drinking water (ozone is generated from oxygen). It is also used in the treatment of industrial effluents. f Health Care Oxygen is vital to healthcare and hospitals are the main users. They pipe supplies(usually from liquid storage) or use cylinder supplies for operating theatres, emergency wards, intensive care units and to supply individual beds. Oxygen therapy is also used in the home, supplied in cylinders or from oxygen concentrators (small-scale PSA units). Oxygen is also used in the breeding and transport of fish. g Other Applications Oxygen is used for de-lignification in the paper pulp industry. Another use is to speed up fermentation processes in brewing and pharmaceuticals. It is also used in liquid from as a rocket propellant.
7.3ARGON Although less than one per cent of the atmosphere, this gas is of increasing importance as it is absolutely inert (more so than nitrogen). While for most metallurgical applications nitrogen is sufficiently inert, argon is the choice when extreme conditions (higher temperatures etc.) are used. a Primary Metal Production One of argons main uses is in the steel and stainless steel industry where it is used to stir molten metal (in ladles) and eject traces of carbon and nitrogen (to prevent nitrides formation). In stainless steel, a licensed process is that of argon oxygen decarburization (AOD) which was 58
invented by Union Carbide (now Praxair).Argon is also used in some other, rarer metal production and in some Aluminium smelting operations. b Welding Shielding Gases Argon is a common component of welding gases and gas mixtures for TIG and MIG welding (and more recently laser welding) where it is used as a shielding gas to prevent oxidation of the weld. These welding gas mixtures are generally used in the more developed industrialized countries where welding techniques are more advanced. c Electronics The gas is also commonly used to fill household light bulbs (its inertness prolongs filament life) and fluorescent tubes. In electronics it is used for cleaning silicon chips, producing fibre optics and in some lasers. d Other Applications Argon is also widely used as a carrier gas in research and laboratory operations, again due to its inert nature.
7.4 The Noble (or Rare) Gases - Neon, Krypton, Xenon
Between them, these gases represent less than two thousandths of one per cent of air. However, they are worth separating in large ASUs because each has its own unique applications. Due to their rarity and cost they from part of the Special Gases portfolio. The main uses of neon are in (neon) lighting, display signs and electronic tubes. It is also used with helium in continuous lasers. Krypton is also used in aimer lasers, particularly in surgery. Krypton is used as a barrier gas in double glazing and in energy saving light bulbs (together with argon). Xenon is used in special lighting applications such as flash-lighting, high performance automobile headlights, lighthouses and xerography. It is also present in some eximer lasers. A new application is in ion engines for deep space propulsion. In the field of medicine it can be used as an anesthetic and in medical imaging.
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7.5 Carbon Dioxide
Carbon Dioxide (CO2) is soluble in water, 0.9 volumes of the gas dissolving in 1 volume of water at 200C to produce a mildly acidic solution. Like a number of other gases, the relatively inert qualities of CO2 under normal conditions, makes it useful for suppressing combustion or oxidation. Another importance characteristic of CO2 is its bacteriostatic nature (does not support life and respiration of aerobic microbes and beings). Being non-toxic it can also be used in food applications. CO 2 in its liquid from, besides being a good source of cold (-780C), has a unique character in that whilst it is kept under pressure will remain a liquid but when the pressure is released (when expanded rapidly) it solidifies. This property allows solid carbon dioxide to be produced as snow, in pellets or blocks as dry ice. Dry ice
possesses the useful property that it does not melt as a liquid but turns into gas (sublimes) without leaving any residue. a Beverage Industry
A major use of CO2 is in the manufacture of carbonated beverages where, when dissolved under a pressure of 2-5 atmospheres, it causes effervescence (fizz). Hence all the carbonated drinks produced by companies such as Coca Cola, Pepsi etc and the carbonated mineral water, use carbon dioxide to generate the fizz. CO2 is also used in the production of beer (both alcoholic and non-alcoholic) where it is used in various stages of the beer processes, from carbonation, bottling and barreling as well as mass transfer of liquids. In most developing countries, the use of CO2 in these applications usually accounts from between 50 and 75% of the total demand for the gas. The CO2 is also used in the dispensing of soft drinks and beers in pubs and fast food chains. b Food Processing and Transportation
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Liquid CO2 is much used as a refrigerant in food freezing and chilling, especially where the use of LIN is too extreme in temperature or too volatile (high boil off rate). Dry ice and CO2 snow is used in food preservation. In gaseous from it can be used in protective atmospheres for the transport and storage of food or as an inert gas for purging of pipelines. A relatively new application includes in-transit refrigeration where additional cold is required above that provided by mechanical refrigeration units or instead of these units. Other food related applications includes MAP of food (like nitrogen). c Chemical Production
CO2 is used in smaller chemical processes and in the manufacture of pharmaceutical products and sweeteners. In the chemicals industry it is used in the Solvay process to manufacture soda ash. It is also used to correct syngas ratios in carbon chemistry and in the production of urea from Ammonia. d Waste Water Treatment
CO2 can be used in two main forms of waste water treatment, firstly for reducing the pH value of the water in high alkaline conditions and secondly to remove minerals and heavy metals.
e Horticulture
Another large use of CO 2 is in the horticulture business in those countries with slightly lower light levels (all year round) in order to stimulate growth and increase crop yield in green house grown produce. e Nuclear CO2 is the gas used in gas cooled nuclear reactors, particularly in the UK. f Other Applications foaming of plastics and rubber usually rely on CO2. As a liquid it is also used as a cooling agent in many non-food industries suchas metal casting. 61
CO2 is used for fire fighting Use as an anesthetic gas in cattle slaughter
HYDROGEN
Hydrogen (H2) is the simplest chemical element and forms 75% of the mass of the universe but less than 1% of the mass of the earth. It is highly reactive and combines readily with oxygen (explosively if not controlled) and many non-metals. It also combines with some metals to from hydrides. It is commonly used as a reducing agent. The reducing properties of hydrogen are used to remove oxygen during high-temperature processes such as metal treatment or float glass production. The reactive/reducing properties of hydrogen are utilized to a great extent in intermediate processes in the
chemicals/petrochemicals and refinery industries where it is usually produced on-site. Hydrogen is also used to hydrogenate unsaturated fats and oils to thicken them and reduces oxidation. This process finds applications in the manufacture of margarine and edible oils as well as shampoos, lubricants, household cleaners and a variety of industrial products. Hydrogen is a key gas in microchip manufacture where it is used in atmospheres for growing crystals, etching, annealing and bonding. Hydrogen is used in welding mixtures and cutting applications. Waste hydrogen is often burnt as a fuel gas. A dramatic use for liquid hydrogen, along with liquid oxygen, is for rocket propulsion. HELIUM
Helium is one of the noble gases and is the second most abundant element in the universe after hydrogen but only minute amounts are present in air. It occurs on earth mainly in the presence of natural gas in which it has resulted from radioactive decay. Helium is very inert and has a uniquely low boiling point within a few degrees of absolute zero (-268.90C). Its inertness makes it ideal for helium based shielding gases in welding applications (stainless steel, aluminium, copper alloys). It is also used as an inerting medium in the manufacture of optical fibers. As a small molecule it is also highly leaky and is used for leak detection in vessels and pipe62
work. It can be used for heat transfer in nuclear reactors because it remains chemically inert and non-radioactive. Being so light and inert it is used for balloons. Helium is used in breathing gas mixtures by divers, where it replaces the nitrogen. Another medical use is in breathing mixtures to relieve respiratory difficulties. The very low temperature of liquid helium is utilised in super conducting magnets which are used in medical MRI scanners and specialized research apparatus.
7.8 ACETYLENE
This is an explosive gas which in the presence of the right amount of oxygen burns with a brilliant flame at a temperature of about 30000C. Hence the oxy-acetylene blowtorch is widely used in welding and cutting metals with high melting points and this forms almost the sole use for the gas. For chemical synthesis it has been replaced by ethylene and its use for lighting has been superseded by high performance lamps using the noble gases. For cutting operations where the highest temperature and speed are not necessary it has lost market share to cheaper LPG and consequently, acetylene is usually in low or even negative growth. 7.9 NITROUS OXIDE
The principal use of nitrous oxide is as an anesthetic in medicine. When inhaled in pure from, it is asphyxiating, but in high concentrations (80% plus) with oxygen it induces rapid but rather shallow anesthesia (which is insufficient for major surgery). The gas is useful for analgesia and sedation and as a background anesthetic in conjunction with more potent additives for major surgery. It is still the most widely used anesthetic gas. Non-medical uses are much smaller and include aerosol propellants, leak testing, food packaging, refrigeration and spectroscopy. SPECIAL GASES
The noble gases - helium, neon, krypton and xenon are usually marketed as special gases as are ultra-high purity oxygen and nitrogen. However, there are many other special gases sold in cylinders, 63
which are either simple chemical compounds or more often are mixtures of gases. Many are complex and formulated to the highest level of purity. Some are made specifically for a single customer. The major industrial gases companies market up to 20 000 special gases and mixtures, with very high values per cylinder.
COSTS AND PRICING OF INDUSTRIAL GASES

INTRODUCTION An understanding of the cost structure or cost drivers applicable to each type of industrial gas provides an understanding of the reasons for the various modes of supply and the price levels which result. With the exception of special gases and (to a degree) argon, the industrial gases are not traded internationally and pricing is therefore generally done on a national or even local basis to reflect local production costs and the immediate competitive environment. Domestic/national production costs can differ markedly between countries depending on the available production or recovery methods, the scale of these local facilities, feed-stock and energy costs. 8.1 PRICING -GENERIC COST FACTORS Before turning our attention to each gas it is useful to classify the main cost drivers into:
PRIME PRODUCTION/RECOVERY COSTS:
- Raw materials/feed-stock price - Energy -Capital cost recovery - Production labor DISTRIBUTION COSTS:
-Repackaging (for different supply modes) - Delivery of gases
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ADMINISTRATIVE COSTS:
- Marketing - Applications& product development o sales effort - Order processing - Accounting and general admin.
These are not dissimilar to what other industries face or incur but in the case of most industrial gases the two main costs are the power and the distribution costs. PRIME COSTS Most industrial gases are either raw material or energy intensive (but not both) and reasonably capital intensive to manufacture/recover. Labor costs are moderate at the prime cost level. Table 8.2.1 presents a comparison of the importance of each prime cost factors (on a scale from nil to high) in determining prime production unit costs according to the gas and method. It also indicates how well the process scales up (i.e. the advantages of scale): TABLE 8.2.1.IMPACT OF COST FACTORS ON PRIME COSTS Gas - Pro GAS PROCESS
AIR GASES -Cryogenic -Non Cryogenic CARBON DIOXIDE -Recovery systems -combustion -reforming/syngas HYDROGEN -reforming/syngas -recovery systems -cracking -electrolysis -Partial oxidation CARBON MONOXIDE -reforming/syngas
SCALE High Low High Medium High High High Low Low High High
FEEDS Nil Nil High High High High High High Low High High
ENERGY High High Low Low Low Low Low Low High Low Low
CAPITAL High Medium High Medium High High High High High High High
LABOUR Low Low Low Low Low Low Low Low Low Low Low
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HELIUM (recovery) ACETYLENE NITROUS OXIDE SPECIAL GASES
High Low Low Low
Low High High Medium
High Low Low Low
High Medium Medium Medium
Low Medium Medium Medium
Gases are generally produced in expensive process plant, which leads to capital intensity and advantages of scale4 (but low labor costs). Exceptions are acetylene and nitrous oxide where the process plant is simple, raw material costs crucial and operating labor significant. Fuel costs. Usually this is relatively high in Europe (1.75-2.25 per ton per km) compared with that in the US. Compressed gases, unless produced directly at the prime production stage (nitrous oxide, acetylene) entail additional compression costs. To reduce overall distribution costs, cylinders are often filled in regional centers (compressing stations) remote from the production centers from which they are shipped in bulk. For compressed gas/cylinder supplies the labor element of filling cylinders, maintaining cylinders and cylinder fittings and delivering cylinders to customers are considerable. (The initial cost of a cylinder is also considerable relative to the amount of gas held, although they have a long life e.g. $150 per cylinder). In developed economies especially, this makes cylinder gases much more expensive than bulk supplies, but small customers cannot justify the cost of liquid storage and in all markets there is a very large population of customers who use a few cylinders of gases per year. It will be evident that distribution costs per unit increase as customer volume decreases and the prime reasons for the different supply modes result from a tradeoff between capital and other
distribution costs.
ADMINISTRATIVE COSTS
The different methods of supply and the customer profiles that help to determine this have an impact on the sales and administrative costs of doing business. For marketing to large scale users, whether pipeline or bulk, it is necessary to have applications expertise within the gases company which can assist the customer in the efficient use of the gases to improve his own costs and quality. Indeed the gas companies are eager to demonstrate such an expertise in order to expand their market and as far as possible differentiate themselves from competitors. Even in the case of compressed gases (for example in welding) it is advantageous to be knowledgeable about customers processes and requirements, but pipeline and liquid customers 66
require the most effort. In terms of winning contracts, it takes effort and specialist engineering and commercial knowledge to be able to construct appropriate supply schemes for pipeline supplies. Liquid customers on average require more sales effort and order processing per ton sold, while compressed supplies require well-honed systems of order processing, customer account management and cylinder management. The management accounting for production and sales is simplest for pipeline supplies and the most complex for cylinder supplies which involve further production and distribution costs and a myriad of customers.
8.4 COSTS-VOLUME RELATIONSHIPS`
Although there are additional costs incurred as one moves from pipeline to bulk to packaged supplies, the trade-off between capital and other costs is volume related. Prices naturally tend to follow the pattern of costs. The pattern of costs is heavily influenced by the available supply modes. The absolute levels are also determined by the available sources of supply, the scale of production and the unit costs of the factors of supply - energy costs, fed-stock costs, labor rates, etc. and these can vary widely from one country to another. In highly developed economies the cost variations between supply modes tend to be larger than in developing economies because:
igher
And therefore the differential impact is greater. In Europe, the unit prices of liquid oxygen are typically 4-5 times pipeline prices and compressed oxygen can be 15-30 times pipeline prices depending on annual volume. The pricing mechanisms in use to recover costs and make adequate returns on investment are 67
discussed in the next section. However the ability to apply premium pricing to low volume packaged gases can make this a very profitable business
COMMERCIAL PRACTICES
INTRODUCTION
It is important to understand typical commercial practices within the industrial gases business, since these are common to all the main players in the industry, especially in developed industrialized countries. For the developing markets, even the major gas companies have to initially bow to local market conditions and practices but eventually a major player (or 2) will bring pricing discipline to the market. We have therefore covered for the purposes of this briefing the main commercial practices commonly observed in the industry.
9.1 PIPELINE / ON-SITE SUPPLIES Pipeline or on-site supplies are individually negotiated between the gas company and the client. This requires both an engineering and commercial input. The gas company needs to understand the customers demand pattern as well as purities, flow 68
rates, pressures and other variables. Besides pipeline supplies, back up liquid storage may also be required (on-site or by the gas company vaporizing liquid on its own premises to pressurize the pipeline). There are invariably a number of engineering solutions, which can be deliberated to achieve an suitable continuity of supply. Also, there may be a need to supply specialist equipment for applying the gas in the customers process. Supply scheme contracts are normally negotiated for 15 years supply (but sometimes shorter) in order to be able to recover the substantial capital investment in production and distribution plant at a reasonable unit price to the customer. Great care has to be exercised by the gas company to ensure that it obtains a worthwhile return over this long period of time as supply scheme contracts cannot be unilaterally re-negotiated. The tariff therefore has to be indexed for changing cost levels throughout the term. Supply scheme tariffs can comprise several elements: Facility (or fixed) charge, usually invoiced as a lump sum each month. This is to recover the fixed costs which are incurred for as long as the facilities are at the disposal of the customer (but not necessarily operating, such as during customer shut-down periods). This facility charge usually includes an amount for obtaining the necessary financial return on the capital investment. It is usual for this charge to be at least partly indexed to a general cost inflation index so that the supply scheme profits are protected in real terms. Primary production charge, which is designed to recover the minimum operating costs incurred for holding the plant in a production state (normal situation), regardless of whether any gas is produced. This is designed to recover the unavoidable semi-fixed operating costs (at maximum plant turn-down) during short-term cessation or reduction of supplies. This is usually a lump sum amount indexed to relevant cost indices such as for power and labor. It may change in a step-wise fashion if several plant items can be progressively switched off as output falls. Unit gas charge
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(expressed as an amount per ton or per cubic meter) for each gas supplied. There may be different gas charges for back-up liquids or gas obtained from liquid stocks than from gaseous product obtained directly from the production plant. These gas charges are designed to recover the variable operating costs, of which power and/or feedstock costs are usually the main item but which can also include labor and maintenance costs. Gas charges are invariably indexed to the main input costs power, feed-stock, labor.
9.2 BULK SUPPLIES
Bulk supplies normally entail some capital expenditure by the gas company to install its own storage and pipeline systems on the customers premises and perhaps purchase specialized delivery vehicles. The gas companies usually prefer the equipment to be owned by themselves rather than the customer in order to discourage competitors access to the customer. Given the infrastructure investment required, it is normal for gas companies to charge rent on a monthly basis for bulk supplies (and sometimes an up-front charge for unrecoverable expenditure related to specific equipment relevant to the customers particular application) and to have a contractual period of up to 5 years (maximum 3 years in the EU). In addition there is a unit charge for the gas consumed, usually specific to a particular customer unless competition laws dictate otherwise. Prices are normally indexed to power costs and a labor or general inflation index.
PACKAGED SUPPLIES Since cylinders (compressed or liquid) are expensive relative to the value of gas they contain, it is essential for the gas companies to achieve tight control of their cylinder population and because cylinders are expensive assets, which are usually owned by the gas company, there is usually an understanding between the companies that they will not refill each others cylinders (in developed markets). 70
Gas companies need to have charging mechanisms, which recover a fair contribution to their cost and maintenance from each class of customer. Therefore they usually employ several revenue streams rather than having only a single all-inclusive unit price of gas, such as: cylinder deposits Cylinder rentals Transaction/admin. Charges Gas charges Delivery charges The capital costs of cylinders can be recovered either through charging a returnable deposit for the cylinder or cylinder rent on a monthly or annual basis. Cylinder deposits have the disadvantage that some customers may prefer to buy their own and over the life of a cylinder (30 years or more) the initial deposit becomes negligible and of little motivation for the customer to return under-utilized cylinders. However, in some countries where customers are difficult to trace or there are difficulties with credit payments, this can be the best option. Cylinder rentals are a more dynamic means of ensuring the customer does not hoard cylinders as he pays for each cylinder currently held. As a pricing mechanism, they can also be easily changed with an immediate impact on revenues. It is not unusual for one third of a gas companys revenue from packaged gases to be from cylinder rentals. In countries where order processing costs are high, a fixed charge per order is sometimes applied. Gas prices (expressed as cost of gas per cylinder and depending on cylinder size, or as a per cubic meter cost) can be kept low when fixed costs of cylinders and orders are being separately recovered. This has the effect of favoring the large customer who orders in large lots and has a rapid turn-round of cylinders and therefore most closely mirrors the real cost of serving the customer (whether large or small). Delivery charges are often levied as some customers (especially small, local clients) prefer to collect from the gas company direct. It is usual for gas companies to have published list prices for these various elements of cylinder supplies which can be changed at will to reflect the current cost or competitive environment. The gas companies often sell welding equipment and consumables alongside their cylinder gases in order to offer a one stop shop for gas and gear to their welding customers. These equipments may be manufactured by the gas company itself or merely traded. 71
CRITICAL SUCCESS FACTORS

From the foregoing description of the industrial gases business it will be evident that there are a variety of core competencies required for success (critical success factors). Some of these will apply to a variety of industries but we believe that all of the success factors chosen are relevant to the industrial gases business. This Section discusses the critical success factors for operating a successful global operation in the industrial gases business. 10.1 TECHNOLOGY Technology is a key critical success factor for the industrial gas business since it is required in all phases (supply chain) of the business. These include: Production Distribution Applications Information Technology Production Most of the major gas companies have their own plant design/build departments and some have their own manufacturing divisions (others outsource) which manufacture gas production plants (ASUs, CO2 recovery, Hydrogen etc.), usually for their own gases operations but can sell to lesser third parties. These companies are concerned to keep their plant technologies up to date in order to have the most effective technology for winning on-site/pipeline business. Other companies have not been able to keep pace with the developments in gas production technologies and have exited the plant design/build business and purchase plants from the leading providers. So it is not necessary to have the technology or the capability but it is important to have access to it. Clearly there is a competitive advantage of having both though. They are also keen to produce effective non-cryogenic plant as this is seen as the direction the industry is moving in and the user technology of the future for certain purity and volume requirements. The gas companies want to restrict the penetration in this market of the equipment companies from outside the traditional industrial gases sector. 72
In most cases gas companies have usually acquired the non-cryogenic technologies by taking over the independent equipment producers. Gas companies who wish to develop new, untried applications and design appropriate equipment for the effective use of the gas in customers processes require an R & D facility. Knowledge of plant operations (utilizing various processes) is obviously important, including attention to quality (especially medical gases) and safe operations .Throughout the production and distribution chain (many of the gases being explosive, toxic or at least supporting combustion). Knowledge of pipeline engineering and maintenance is important not only in industrial gases but also in medical gases where the fitting out of hospitals is a common requirement for success. For most gases production there are substantial advantages of scale arising from larger production plants. For this reason the gas companies are keen to win high volume supply scheme business which can provide a low cost position for selling to the merchant (bulk and compressed) market. In any case, high market share is likely to provide the best opportunities for scale benefits. Distribution As distribution costs are an important element of this business, the gas companies tend to either develop better distribution technologies themselves or use outside specialists to develop the necessary requirements. This applies to the liquid/bulk distribution fleet, the storage tanks, the cylinder filling and handling facilities etc. For example, the gas companies know how expensive it is to move cylinders of gas around. Therefore the development of higher operating pressure cylinders (300 to 350 bars) will be crucial for the future of cylinder distribution. Developing technology related to automated cylinder filling plants, gas mixing, cylinder testing is essential to the success of a gas company operating in the cylinder business. For the lower value gases such as nitrogen and oxygen there has to be some tradeoff between centralized production and perhaps increased distribution costs. One method of balancing the two is to have distribution branches which receive bulk supplies from the production plant and re-package into cylinders which are then distributed locally. (Liquid customers may also be supplied from the local branch). Logistics planning (with a fairly long time horizon for balancing supply and demand) is therefore important to reach and maintain minimum costs. Cost effective day to day management of distribution costs requires effective management of the distribution fleet for bulk and compressed gases. (The gases companies can be amongst the largest fleet operators in the country). Cylinder management systems to ensure an adequate, but not excess, stock of filled cylinders with the customer or on the deck are crucial to provide adequate service levels, optimize the revenue income from cylinder customers and minimize fixed asset values tied up in the business. 73
Applications Applications technology is probably the one area, which the gas companies have excelled over 100 years. It used to be considered that application technology was a competitive advantage, but the industry has matured and there are very few applications which cannot be offered by several of the gas companies. What is a critical success factor is the application know-how though (even if not the technology itself). This application know-how distinguishes the Tier 1 and Tier 2 companies from the Tier 3 (and 4) and distributors. Successful gas companies have a wide range of application technologies or know-how available, covering all industries they are focusing on. Information Technology The gas companies have recently focused on this area of technology to either develop systems to improve the efficiency of their operations and reduce costs. include: Fully automated plant operating systems (even remote operation or monitoring) Fully automated cylinder filling facilities Bulk (liquid) filling and invoicing systems (tele-monitoring of tanks and deliveries) The Internet Examples
MARKET DYNAMICS There are four aspects critical to understanding the market dynamics of this business. They are: Products and product range Geographic Coverage Market/Industry Sectors Knowledge of the Customer 74
A successful gas company will have a strategy in place to ensure that all 4 are covered. Products As we have seen, the industrial gas business covers a number of different products from the main air gases to the very specialized gases. Successful gas companies will have the production capability or the availability of a range of such products in order to offer services to the variety of industries the gas companies operate in. There are some gas companies which specialize in just certain products as they have strategically decided to remain out of the main definition of an industrial gases company (e.g. carbon dioxide, special gases etc.) Geographic Coverage The industrial gases business is very much a localized one due to the limited distribution range of all three supply modes (obviously depending on the end price of the gas). Smaller independent companies tend to operate on a localized or national basis. Larger companies operate on a national or regional basis and the majors generally have operations in most if not all regions of the world. It is therefore important part of the companys strategy to determine the geographic markets they wish to undertake business as the resources and support requirements are essential for a successful operation. Market Sectors The industrial gases business covers a variety of industries and each has some unique requirements for its particular industry. Therefore an important issue or criteria for a gas company is to understand the dynamics (drivers) of each industry in order to maximize the potential for gas supply in each market sector. Understanding the market sectors/industries will lead to development of the application technologies required for each industry. Because of the wide range of industries some gas companies specialize in supplying certain markets, obviously, the larger the gas company, the greater the R&D effort and the greater the support to those industries. Recently, gas companies have tended to focus R&D effort on fast growth sectors. Knowledge of the Customer Understanding the customer and the industry it operates in is an essential factor for a successful gas business, as we have seen above, understanding the industry is important but so is an understanding of the customer and its technologies. Each industry has a variety of technologies, some or all can 75
be potential users of gases. Helping the customer realize greater efficiencies, faster output, increase capacity throughput are all critical success factors in understanding the customer. We have seen that the battle for growth and market share in the volume pipeline/on-site and bulk businesses is spearheaded by applications development. This requires specific industry/process sector knowledge. Unfortunately, it is difficult for all but the largest companies to have experts in all the applications where industrial gases are used. Even the large major gas companies have relative strengths and weaknesses in different fields. The major gas companies are unable to have this expertise uniformly available in all national markets. Rather, they set up centers of expertise in the larger markets to develop new applications and network with their smaller subsidiaries to apply the knowledge globally (not always successfully). The major gas companies restrict this competitive advantage to them and only pass it on where they have sufficient equity interest. For small independent companies this is the greatest single difficulty as they cannot normally access the necessary applications knowledge and have to be followers, relying on the customers own knowledge and resources. Many have sought partners from amongst the major companies for this very reason.
COMPETITIVE ENVIRONMENT
Another key critical success factor is an understanding of the competitor environment in which the gas company operates. This applies to the following: Re-defined Distribution Channels Power shifts towards the customer New emerging players More creative selling Technology shifts Industry does not always have to use gases, in some cases there are alternatives (e.g. mechanical refrigeration, chemicals for water treatment etc.). Re-defined Distribution Channels
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Gas companies have to be aware when customers need to progress from cylinder deliveries to bulk and even the possibility of cylinders to on-site supply. It is important to understand the possibility of a customer by-passing traditional distribution routes. Power Shift to Customer Many customers are developing a better understanding of their gas requirements, some seeing gases as another utility. They have a strategy of getting to know the gas companies better and of understanding what technology offers them the most cost effective solution to their needs. New Emerging Players On a global scale this is unlikely to happen and industry consolidation is more likely to occur. However, on a regional basis or even on a local basis this is always a competitive threat. However, it is not just about another gas company, but whether that company has the support from a major player or substantial capital or access to new or alternative technologies. More Creative Selling Gas companies have had to shift towards more creative selling techniques and support in order to expand business opportunities, this includes re-developing sales strategy and options for the customer in the on-site business. Another key success factor relying on specialist marketing expertise is the requirement to engineer and negotiate major supply schemes. Technology Shifts Technology shifts occur both within the industry (e.g. cryo to non-cryo, etc.) as well as at the customer end. Again a gas company to be successful has to be aware of this at both ends of the spectrum. Most shifts are gradual, with slow impact on the market due to the natural reluctance of both customers and the industry to take unnecessary risks. Non-cryogenic technologies were first proposed in the early 1970s but had little impact until the 1990s, when both their economic benefits and robustness had improved.
ORGANISATIONAL
The key success factors in the marketing, technology and distribution fields obviously require an appropriate organization structure staffed by employees with the requisite skills. A successful company operating in a competitive environment needs to have mechanisms for applying best practice throughout the company. The three essential factors include: Structure 77
Competent Staff Effective Leadership Structure The major gas companies do differ in terms of structure but there are some general functions which are common, other than the usually Human Resource, Finance, and Legal etc. An effective structure has Operations, Technology and Commercial Functions. Where differences occur is whether the market segments head up the commercial functions or whether the Line of Business is the driving force. However, common to most of the majors is the relatively heavy loading on R&D and technology development. Competent Staff Competent staff is also important and there is a tendency to recruit staff from outside of the gas business from the industries in which the gas company wants to operate in (e.g. petrochemical/refining staff and steel managers). Effective Leadership It is noticeable that the successful companies in recent years have all had dynamic and forceful leaders pushing through strict cost reduction program and acquisitions or expansions (e.g. Praxair, Messer, and AGA). The companies who have had a problem at the top have underperformed in recent years (ex-BOC and TNSC).
CAPITAL
Because of the capital intensive business the industrial gases business has become the importance of financing the capital (and managing it) is another key critical success factor). Various forces come into play, which include: Larger project financing (utility islands) Higher return expectations (particularly from shareholders) Balance sheet management (ratio of equity to debt) Barriers to entry (high Capex projects) Most of the top players are stock listed and therefore Capex funding is very much observed by the shareholders but the companies have access to market rate financing packages at lowest cost 78
opportunities. Some players are owned by larger holding companies where Capex funding can be conservative or restricted if the parent is experiencing problems. Availability of capital financing will determine part of that gas companys strategy (particularly short-term).
10.6 COST BASE

The cost base of the operational functions is also a key factor although could be applied to most industries. However, maintaining a strong, efficient cost base in both production and distribution is essential to be successful in normal market conditions, particularly since the industrial gas business has become global and more competitive. The following operational functions are key to maintaining a good cost position in the industrial gases business: Production Distribution Sales & Administration IT
THE NEW APPLICATIONS OF INDUSTRIAL GASES

The following are the new applications of industrial gases that have gained importance in the last 10 years. 1. SPECIALTY GAS MIXTURES Specialty gas mixtures are a combination of gases which have been combined to meet specific applications. They can be two gas mixtures, tri gas mixtures and for a few rare cases, multi-gas mixtures. The special mixture gases offer better quality of welding, less splatter and pinhole problems, a faster welding speed and a substantial increase in welding. The most commonly used mixture gases are :
Argon-carbon dioxide
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Argon-oxygen Argon-helium Argon-hydrogen
2 Modified Atmosphere Packaging (MAP)

Food preservation(controlled atmospheres for packaging or MAP - modified atmosphere packaging), storage/blanketing of fresh produce and beverages in warehouses, storage silos, liquid tanks, cellars, etc. and transport of fresh foods and beverages under conditions of controlled atmosphere (composition and temperature) for national and international distribution. These techniques provide a means of keeping food fresh in the best possible condition throughout the food chain from the point of harvesting to point of consumption in the home, thus increasing shelf life of the food products. Food freezing and chilling rely on both the non-toxic and cold properties of liquid nitrogen. In many countries, food freezing/chilling is the largest single application for liquid nitrogen. Although carbon dioxide and mechanical refrigeration methods can be employed, liquid nitrogen has advantages in speed of freezing (and therefore in quality and productivity measures). Food freezing/chilling can be performed at the initial food preparation stage, or at the food processing stage through to the distribution chain of the food (in-transit refrigeration). Freeze grinding is a relatively minor use but it can also be employed in spice grinding to improve the quality of the spices.
3 HYDROGEN FUEL CELL

Hydrogen fuel is a zero-emission energy source which uses electrochemical cells or combustion in internal engines, to power vehicles and electric devices. It is also used in the propulsion of spacecraft and can possibly be mass-produced and commercialized for passenger vehicles and aircraft. 80
Hydrogen is the first element on the periodic table, making it the lightest element on earth. Since hydrogen gas is so light, it rises in the atmosphere and is thus rarely found in its pure form, H2. In a flame of pure hydrogen gas, the hydrogen (H2) reacts with oxygen (O2) to form water (H2O) and discharges heat. Other than water, hydrogen combustion may produce small amounts of nitrogen oxides. Combustion heat permits hydrogen to act as a fuel. Nonetheless, hydrogen is an energy carrier, resembling electricity, not an energy resource. Energy firms must firstly produce the hydrogen gas, and that production reduces the various environmental impacts. Hydrogen production all the times, require more energy than can be recovered from the gas as a fuel later on. This is a limitation of the physical law of the conservation of energy. Hydrogen lies in the first group and first period in the periodic table. Hydrogen is neither a metal nor a non-metal but still is considered as non-metal. It acts as a metalloid when compressed to high densities.
SPECIAL F1 TIRES
Nitrogen is being used to design new better tires for the F1 car for better durability and to decrease the weight of the car . This is still under research and development. Michelin and Pirelli (tire manufacturing companies ) are currently looking into this technology. If successful, this technology can also be used for regular vehicles and will impact the fuel consumption of the vehicles. Therefore, the potential application of Nitrogen is quite huge. Nitrogen and certain mixtures of nitrogen are pumped and sealed within layers of rubber in the tires making them lighter and more resistant to wear and tear. Similar technology is being researched for extra-terrestrial vehicles like the Mars Rover.
5 OZONE REPLENISHMENT
New methods and technologies are being developed to use oxygen, argon and nitrogen to replenish the fast depleting ozone layer of the earth. This may well prove to be one of the most important applications of industrial gases.
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The issue with ozone-depleting substances is that they add chlorine and bromine to the ozone layer, which effectively widens the hole. Thus, the stable point is lower than it used to be; this lowering of the stable point represents ozone depletion. Since we can't make more ozone, the solution is to reduce the hole in the bucket back to its natural size. The only way to do that is to remove the excess chlorine and bromine from the stratosphere. And the only way to do that is to stop making CFCs and several other chemicals. Although several other measures have been proposed to accelerate the removal of chlorine and bromine from the stratosphere, none has proven to be practical, and most could produce unwanted side effects that are not understood very well. Over time, stratospheric chlorine and bromine will combine with other chemicals and eventually fall back to Earth. That's the point of ending production of these chemicals under the Montreal Protocol and the Clean Air Act. The good news is that the stability works both ways. In our bucket, narrowing the hole allows the water inside to rise to a higher stable point. Similarly, by ending production of ozone depletes, we allow natural processes to remove excess chlorine and bromine, which slows the ozone destruction reactions to normal speeds, and the production process will have the chance to restore the ozone layer to normal levels. Scientists expect that with full compliance with the Montreal Protocol, the ozone layer will heal by about 2050.
6 HYDROPNEUMATIC SUSPENSIONS
Hydro pneumatic suspension is a kind of automotive suspension system, developed by Citron, and built-in to Citron cars, as well as being used under permit by other car manufacturers, notably Rolls-Royce (Silver Shadow), Maserati ) and Peugeot. It was also used on Berlet trucks and is since recently used on Mercedes-Benz cars. Comparable systems are also used on some military vehicles. The aim of this system is to deliver a sensitive, dynamic and high-capacity suspension that offers superior ride quality. A nitrogen reservoir with adjustable volume produces a spring with non-linear force-deflection characteristics. In this way the resulting system does not have any associated dynamic instabilities, which need to be suppressed through extensive damping in conventional suspension systems. The actuation of the nitrogen spring reservoir is performed through an 82
incompressible hydraulic fluid inside a suspension cylinder. By altering the filled fluid volume within the cylinder, A leveling functionality is implemented. The nitrogen gas within the suspension sphere is alienated from the hydraulic oil through a rubber membrane. The nitrogen gas as spring medium is roughly six times more flexible than conventional steel, so self-leveling is assimilated to allow the vehicle to cope with the extraordinary suppleness provided. France was prominent for poor road quality in the post-war years, so the only way to sustain a relatively high speed in a vehicle was if it could easily absorb road irregularities. Although the system has inherent advantages over steel springs, generally recognized in the auto industry, it also has a apparent element of complexity, so automakers like Mercedes-Benz, British Leyland (Hydrolastic, Hydragas), and Lincoln have sought after to create simpler variants using a compressed air suspension. The system of the creator Citron had a disadvantage that only garages equipped with special tools and knowledge were capable and competent to work on the cars, making them seem radically different from ordinary cars with common mechanicals. This technology is undergoing changes and improvements over the years and has the potential for emerging as the new game changer in the automotive industry. This system uses a belt or camshaft driven pump from the engine to pressurize a special hydraulic fluid, which then powers the brakes, suspension and power steering. It can also power any number of features such as the clutch, turning headlamps and even power windows. The suspension system usually features driver-variable ride height, to provide extra clearance in rough terrain.
7 HELIUM NEON LASER

A heliumneon laser or HeNelaser, is a kind of gas laser whose gain medium consists of a mixture of helium and neon inside of a small bore capillary tube, usually excited by a DC electrical discharge. The most well known and most widely used HeNe laser operates at a wavelength of 632.8 nm in the red part of the visible spectrum Red HeNe lasers have countless industrial and scientific uses. They are extensively used in laboratory demonstrations in the field of optics in view of their comparatively low cost and ease of operation compared to other visible lasers producing beams of similar quality in terms of spatial 83
coherence long coherence length (however since about 1990 semiconductor lasers have offered a lower cost alternative for many such applications). A consumer application of the red HeNe laser is the Laserdisc player, made by Pioneer. The laser is used in the device to read the optical disk. This technology is being researched and developed for 3D scanners and in security systems. Although in its early days, its use in optical fibers is also being explored.
13 CONCLUSIONS
In 2016, the global industrial gases market is projected to have a value of $98.8 billion, an increase of approx. 55.2% since 2011. One of the major strong point of the industrial gas industry is that it does not rely on one or two major markets. The sectors, which rely on industrial gases to produce their final products or services, account for more than 50% of the overall global GDP.The industrial gases industry serves a very large number of customers. They are essential for virtually all manufacturing. Large amounts of oxygen, nitrogen and argon are used in the metal and steel industry. Marine and the automotive 84
industry use propane, acetylene, mixtures of fuel gases and oxygen for cutting and welding. Liquid nitrogen is important for recycling of plastics, packaging and scrap tires. The chemical industry uses most of the major industrial gases as raw material or for inerting. The smaller market segment consists of gas cylinders and mixtures. Growth in associated industries such as transportation, food and beverages, metal fabrication and chemical manufacturing are some of the other drivers for the global industrial gases market. However, high costs of transportation and storage of industrial gases is expected to be a key challenge for market participants. With the expansion of modern industries, the demand for industrial is certainly to going to rise. End Market Overview Approximately 39%, 13%, and 12% of industrial and specialty gases are consumed in the manufacturing, chemicals, and metals markets, respectively, while the remaining 35% is consumed in the electronics, energy, food, and healthcare markets. Given the importance of general industrial activity on industrial and specialty gas demand, League Park believes that the recent improvement in economic activity in Asia and North America should continue to drive strong volume demand as well as growth in unit pricing. Overall, the industrial and specialty gas market is projected to grow 9% annually from 2010 through 2015; however, as shown below, a disproportionate share of the growth is anticipated to be driven by the energy, electronics, and metals sectors
Significant underlying trends will continue to drive growth in the industrial and specialty gas industry. The aforementioned trends include: Rebound in global industrial production will drive continued improvements. Over the last 14 years, the industrial and specialty gas market had expanded at approximately two-times the rate of industrial production. As the U.S. and Europe rebound economically, the multiplier effect portends well for industrial and specialty gas companies.
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Anticipated improvements in the overall construction market appear to be around the corner. We believe the low levels of new home inventories, low mortgage rate environment, increasing disposable income, and projected 9.0% U.S. population growth over the next 10 years should fuel an extended sector recovery. Overall, the construction market is a large consumer of manufactured, metal, and chemical products, and will be a key driver (direct and indirect) of industrial and specialty gas consumption. Continued increases in global energy demand. The energy market is a significant consumer of gas in the refining and gasification production processes. In terms of the refining process, the U.S. government, among others, is requiring refiners to produce low sulfur, cleaner burning fuels, which requires large amounts of hydrogen in the refining process. Given this, the on-site hydrogen market is projected to more than double from 2010 to 2020. In addition to the sheer volume growth of hydrogen, outsourced hydrogen plants are anticipated to grow from 20% in 2010 of volume to 30% of volume by 2015. Another notable data point is Chinas lack of oil resources and abundance of coal. China is increasingly using coal to produce Syngas, which is used as a fuel additive in gasoline. The Syngas production process is a large consumer of oxygen. These sustained demand drivers are expected to drive industrial and specialty gas demand. Heightened environmental consciousness and increased focus on regulating and monitoring activities will continue to drive industrial and specialty gas demand Increased use of technology and devices in abroad-array of environments
digital 86
is driving the semiconductor and display markets. Overall, the electronics market is a large consumer of industrial and specialty gas and is projected to continue to grow, which will drive demand.
An aging population with growing healthcare needs will continue to drive medical-grade oxygen, anesthetics, and therapeutics consumption. Additionally, the rapidly expanding homecare market represents a highly stable long-term opportunity as governments and insurers look to move patients from expensive hospitals into homecare environments. As a result, continued growth in packaged medical-grade gas products is expected.
Regional Summary
Given industrial and specialty gases reliance on economic activity, its not surprising that companies with a strong sales presence within Southeast Asia have generated significant historic growth. This growth is also expected to continue as the Asian markets undergo industrialization and their per capita consumption of industrial and specialty gases increases. As a percentage of per capita consumption, the Chinese market is only 13.2% the size of the U.S. and European markets, which represents meaningful growth potential. Elements driving growth in China include: (i) petroleum product shipment growth is contributing to increases in hydrogen demand; (ii) steel production is a large consumer of oxygen; and (iii) growth in electronics will drive demand in gases such as nitrogen. Going forward, China, the leading market for industrial and specialty gas, is projected to grow by 19% through 2015. Although the U.S. market is one of the more mature markets and represents 26% of the global market, it is anticipated to expand by 8% through 2015. Although demand and production tend to be driven by regional forces, it should also be mentioned that there are some notable exceptions. For example, certain rare noble gases such as krypton and xenon are primarily manufactured in Eastern Europe at aging ASUs that are adjoined to some of the worlds largest steel mills. Exceptions such as this, greatly increase the importance of distributors as the transportation and importation of these products tend to be done in smaller quantities and is highly regulated.
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THE MAJOR DRIVERS FOR INDUSTRIAL GAS INDUSTRY

1 Market Fragmentation
The cylinder/packaged industrial and specialty gas industry is fragmented with over 1,000 total participants competing. However, due to high freight costs, location of ASUs, and unique regional product demand, we believe that the industrial and specialty gas markets need to be assessed by individual gas products and potentially on a regional basis. For example, although the industrial and specialty gas market appears to be dominated by a select group of global companies, the participants tend to compete on a regional basis with a plethora of participants.
2 Down-Stream Integration
Nearly all of the Majors have publicly stated their intent to lead down-stream integration in the industrial and specialty gas industry (the purchase of distributors). Given that the Majors have captive production units and shortages of certain products exist in the marketplace, such as helium, they have been provided significant pricing power in the short-run. Down-stream integration should enable the Majors to provide turnkey gas solutions, capture additional value in the supply chain, and enhance cash flow and earnings stability. In addition, down-stream integration enables the Majors to increasingly capture share within the higher-margin cylinder/packaged market. Examples of down-stream integration by Majors are Praxairs acquisition of the American Gas Group, Airgas acquisition of ABCO, and Lindes acquisition of Air Products European homecare business.
3. Globalization
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Although the domestic markets are projected to grow in the high single-digits (8%), many of the Majors are turning to geographic expansion as a means to generate double-digit revenue growth and appease Wall Street analysts. Historically, one approach has been to complete bolt-on acquisitions in contiguous regions, which enables the acquirer to realize significant synergetic benefits. These benefits include centralized administrative functions, efficient production and logistics planning, and pricing power. An alternative is to acquire stand-alone operations that maintain a substantial national or geographic presence. The benefits of acquiring a regionally dominant/stand-alone operation are immediate cash-flow generation and the ability for the acquirer to leverage its newfound market position and execute bolt-on acquisitions.
4 Implications of Eco-Friendly Production

We believe the global adoption of sustainable energy production has positioned the industrial and specialty gas market at a unique inflection point. Example growth drivers are: (i) hydrogen and oxygen increasingly continue to be important components of the complex refining and gasification processes, which greatly reduce emissions and produce cleaner fuel; (ii) increased production of photovoltaic; (iii) increased focus on vehicle emission standards protocols; and (iv) Purification benefits of carbon dioxide in water treatment and oxygen in wastewater treatment. The aforementioned drivers are anticipated to translate into accelerating sales and market penetration for gases with environmental applications.
14. LIMITATIONS
1. Limited funds 2. Time Constraints 3. Lack of free flow of information between the companies 89
4. The scale of the project. 5. Constantly changing dynamics 6. Lack of prior research studies on Industrial Gases 7. Longitudinal Effects
15. SCOPE FOR FUTURE STUDIES
1. 2.
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The report can be updated with better data as the industrial gas industry is a constantly changing one. The Newer applications can be researched upon individually.
3. 4.
Separate detailed reports on the companies in the Industrial gas business. New technologies would change the scenario of the industry and the changes can be reported accordingly.
16. BIBLIOGRAPHY
1.
Applications of industrial gases, Industrial gas, (www.wikipedia.org),retrievedapril 2013.
2.
Industrial gases, I-chemicals K-Industrial gases, Mr. Bryn Smith (Tamaki college), edited by Mr. John Packer and Mr. John Cumming (BOC gases), retrieved January, 2012.
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3.
Global Industrial and Specialty gases, Global Industrial Analysts Inc., PRweb, (www.strategyR.com ), retrieved March 17, 2013.
4.
Global Industrial Gas Market Trends, Draedal research, (www.researchandmarkets.com ), retrieved april,2013.
5.
World Industrial Gases to 2014, Freedonia group, ( www.freedoniagroup.com ),retrieved August,2010.
6.
New Economic Trends, Industrial Medical and Specialty Gases Journal, Cryogas international, (www.cryogasinternational.com ), retrieved march 2012.
7.
Projects On Industrial Gases, NIIR project consultancy services, ( www.npcs.com ), retrieved april 2013.
8.
Industrial Gas Products, Industrial Gas company India, (www.industrialgasco.com ),retrieved April 2013.
9.
List of Industrial Gas companies, Industrial Gas, Wikipedia, ( www.wikipedia.org ), retrieved april 2013.
10.
Products and Services, Emirates Industrial Gases company llc., (www.eigc.com ), retrieved april 2013.
APPENDIX QUESTIONNAIRE
Mr. Deepak Khanna, marketing head, UAE, EIGC Q1. How long have you been in the Industrial Gas industry? 92
Q2. Which sectors does an Industrial gas company cater to? Q3 How is the global Industrial market structured? Q4. What is the demand of industrial gases in respective market segments? Q5. Which sector does the Industrial gas industry focus on? Q6 what and to what extent did the recession impact the industrial gas industry? Q7. Who are the major companies in the Industrial Gas industry? Q8. What are the major gases that are manufactured and sold worldwide? Q9. How are the Industrial gases priced? Q10. What all factors impact the pricing of industrial gases ?
Mr. Kartik Sundaram, Sales & Marketing Q1. How long have you been in the Industrial Gas industry ? Q2. What are specialty gas mixtures? Q3. What is the sales procedure for industrial gases? Q4. How are the applications of industrial gases determined? Q5.which global market has the most potential for industrial gases in 2015? why? Q6. How does a company in the industrial gas market differentiate its product from its competitors? Q7.Which Company has the maximum global share? Q8 Are there any other applications of industrial gases? Q9. Which is the most important gas in terms of volume of sales? 93
Q 10. What new applications are possible for the industrial gases?
Mr. Femi Omatayo Stephen, Quality Control Head Q1. How long have you been in the industrial gas sector? Q2. What is the purpose of Quality control? Q3. How many grades of gases are there? Q4. What equipment is used for the testing of quality of gases? Q5. What is more important in industrial gases industry, the quality or quantity? Q6. At what points, does the product gas become prone to impurities? Q7. How are industrial gases Manufactured?
2.3.2 INDUSTRIAL GAS COMPANIES (GLOBAL)
1 AIR LIQUIDE SA Air Liquide SA, through its subsidiaries, produces, markets, and sells industrial and healthcare gases worldwide. These gases include liquid nitrogen, argon, carbon dioxide, and oxygen. The Company also produces welding equipment, diving equipment, and technical-medical equipment. Air Liquide sells its products throughout Europe, the United States, Canada, Africa, and Asia. Key Executives for Air Liquide SA (AIQUF)
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Benoit PotierChairman/CEO Pierre DufourChief Operating Officer
Jean-Pierre DuprieuDeputy CEO Francois DarchisVice President
Jean-Marc De RoyereVice President Fabienne LecorvaisierVP:Finance & Administration Francois AbrialVP:Human Resources
Michael J GraffVice President
Pascal VinetVP:Healthcare Global Ops Guy SalzgeberVP:Northern & Central Europe
Mok Kwong WengVP:North East Asia
Augustin De RoubinVP:Southern & Eastern Europe
Virginia JeansonInvestor Relations
2 AIRGAS Inc Airgas, Inc. distributes industrial, medical, and specialty gases and related equipment. The Company also produces and distributes liquid carbon dioxide and dry ice in the United States. Airgas' integrated distribution network consists of branch locations, distribution centers, and outbound telemarketing operations. Key Executives for Airgas Inc (ARG) Peter McCausland Chairman/Founder Michael L Molinini "Mike" President/CEO
Robert M McLaughlin "Bob"
Robert A Dougherty
95
Senior VP/CFO
Senior VP/CIO
Robert H Young Jr Senior VP/Secy/General Counsel
J Barrett Strzelec "Barry"Dir: Investor Relations
3 AIR PRODUCTS & CHAMICALS Inc Air Products and Chemicals, Inc. produces industrial atmospheric and specialty gases, and performance materials and equipment. The Company's products include oxygen, nitrogen, argon, helium, specialty surfactants and amines, polyurethane, epoxy curatives and resins. Air Products and Chemicals, Inc. products are used in the beverage, health and semiconductors fields.
Key Executives for Air Products & Chemicals Inc (AP3) John E McGlade Chairman/President/CEO Stephen J Jones President:China/Senior VP
Michael Scott Crocco Senior VP/CFO
John David Stanley Senior VP/CAO/Gen Cnsl
Guillermo Novo Senior VP/Gen Mgr:Electronics
Corning F Painter Senior VP & Gen Mgr:Merchant Gases
Patricia A Mattimore "Pam" Senior VP:Supply Chain Simon R Moore
Jennifer L Grant VP:Human Resources
96
Director:Investor Relations
4 AIR WATER Inc AIR WATER INC. produces industrial gases such as oxygen, nitrogen, argon, and acetylene. The Company also sells fuels and processed foods. Key Executives for Air Water Inc (0AW) Hiroshi AokiChairman/CEO Yasuo ImaiPresident/COO Masahiro ToyodaVice Chairman Akira YoshinoExecutive Vice President
Takashi IzumidaSenior Managing Director Akira FujitaSenior Managing Director
Toshihiko AkatsuSenior Managing Director Kikuo ToyodaSenior Managing Director
Junichi NakagawaSenior Managing Director Yukio MatsubaraManaging Director
Yu KaratoManaging Director Noriyasu SaekiDirector
Masato MachidaDirector
Minoru NagataDirector
Yasushi SogabeDirector
Yukio MurakamiDirector
Kiyoshi ShiraiDirector
97
5. BHAGWATI GAS Ltd. Bhagawati Gas Ltd. produces, distributes, and markets industrial gases. The Company manufactures oxygen, nitrogen, argon and other gases. Bhagawati provides technical consultancy, installation and commissioning of air separation and PSA plants, and supplies medical oxygen to hospitals and nursing homes. Key Executives for Bhagawati Gas Ltd (BWG) Rakesh Samrat Bhardwaj Chairman/Managing Director Vivek Sharma Executive Director
Pradeep Puranik Chief Financial Officer
Sanjay Kuma rSecretary/Compliance Officer
6 BHAGWATI OXYGEN Ltd Bhagwati Oxygen Ltd. supplies medical Oxygen to hospitals and nursing homes. Key Executives for Bhagwati Oxygen Ltd (BOL) Suresh Kumar SharmaChairman Himanshu SharmaManaging Director
7 BOC GASES BOC Gases Nigeria Plc manufactures industrial and medical gases. The Company also markets special gases, welding, and medical equipment. Key Executives for BOC Gases Nigeria PLC (BOCGAS) D A AkintolaChairman J A IdowuManaging Director
A AlayakiGeneral Manager:Finance
O B AdisaManager:Internal Audit
98
T A TaiwoManager:Natl Sales
Oluwunmi OlusijiManager:Human Resources
8 BOMBAY OXYGEN CORPORATION Ltd. Bombay Oxygen Corporation Limited manufactures oxygen, acetylene, nitrogen and argon. Key Executives for Bombay Oxygen Corp Ltd (BOC) Bhupesh P Mehta Gen Mgr:Accounts & Finance
9. CHINA ENERGY Ltd China Energy Ltd. produces Dimethyl Ether (DME) and Methanol. The Company sells to fuel distributors, chemical producers, and traders. Key Executives for China Energy Ltd (CEGY) Cui Lianguo Chairman/CEO Li QiangDpty Chief Exec Ofcr/Exec Dir
Ying Wei Hsein "Leslie"Chief Financial Officer
Li QiVP/Head:DME Operation
Wong WilliamExecutive Director
Wong Chee Meng "Lawrence"Secretary
10 ELLENBARRIE INDUSTRIAL GASES Ltd Ellenbarrie Industrial Gases Limited offers a wide range of products from oxygen, nitrogen, argon and other industrial gases. Key Executives for Ellenbarrie Industrial Gases Ltd (ELLEN)
99
Shanti Prasad AgarwalaManaging Director
Padam Kumar AgarwalaJoint Managing Director
Varun AgarwalExecutive Director T GhoshManager:Accounts
Anjan Kumar BandyopadhyaySecretary
11 ENHACED OIL RECOVERY INC Enhanced Oil Resources, Inc. produces carbon dioxide and helium. Key Executives for Enhanced Oil Resources Inc (EORIF) Barry D LaskerPresident/CEO Mark PeavyChief Operating Officer
W Kyle WillisVP/CFO Donald J Currie "Don"Investor Relations
Jamie HogueVP:Government Relations
12. HUNAN KAIMEITE GASES CO LTD Hunan Kaimeite Gases Company Limited produces and sells dry ice, liquid carbon dioxide, food additive liquid carbon dioxide and other industrial gases. The Company also produces and sells plastic products and provides freight transportation. The Company's main products include liquid carbon dioxide and dry ice. Key Executives for Hunan Kaimeite Gases Co Ltd (002549) Zhu EnfuChairman Xiao YongjunPresident
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Xu WeizhongController
Zhang WeiSecretary
13 LINDE AG Linde AG is a gases and engineering company. The Gases Division offers a wide range of industrial and medical gases mainly used in energy sector, steel production, chemical processing, as well as in food processing. The Engineering Division develops olefin plants, natural gas plants and air separation plants, as well as hydrogen and synthesis gas plants. Key Executives for Linde AG (LNAGF) Wolfgang BuecheleMember-Exec Board/CEOWolfgang ReitzleChairman-Mgmt Board/CEO Designate
Aldo BelloniMember-Mgmt Board
Georg DenokeMember-Mgmt Board
Sanjiv LambaMember-Mgmt Board
Thomas Blades "Tom"Member-Mgmt Board
Dominik HegerHead:Investor Relations
14 LINDE INDIA LTD Linde India Limited manufactures and distributes oxygen, hydrogen, nitrogen, argon and specialty gas mixtures. The Company also manufactures welding electrodes, rods, fluxes, gas and electric welding equipment, as well as air separation and gas plants, cryogenic equipment and liquid oxygen explosives.
Key Executives for Linde India Ltd (LIIL)
101
Moloy BanerjeeManaging Director
Pawan MardaAssistant VP/Secretary
15 MAPRO INDUSTRIES LTD Mapro Industries Ltd. manufactures various types of industrial gases. The Company's products include industrial oxygen, dissolved acetylene, and compresses air. Key Executives for Mapro Industries Ltd (MAIR) Umesh Kumar KanodiaExecutive Director Atul Kumar SultaniaExecutive Director
16 NATIONAL OXYGEN LTD National Oxygen Limited manufactures industrial oxygen, nitrogen, and dissolved acetylene gases. Key Executives for National Oxygen Ltd (NOL) G N SarafChairman/Managing Director Lakshmmi SubramanianSecretary Rajesh Kumar SarafJoint Managing Director K S GovindarajanCompliance Officer
17 PRAXAIR INC Praxair, Inc. supplies gas to industries primarily located in North and South America. The Company produces, sells, and distributes atmospheric gases including oxygen, nitrogen, argon, and rare gases, as well as process gases including carbon dioxide, helium, hydrogen, electronics gases, and acetylene. Praxair also supplies metallic and ceramic coatings and powders. Key Executives for Praxair Inc (PX) Stephen F Angel "Steve"Chairman/President/CEO
James S Sawyer "Jim"Exec VP/CFO
102
Scott E TeleszExecutive Vice President
Eduardo MenezesExecutive Vice President
Matthew J White "Matt"Senior VP/CFO
James T BreedloveSenior VP/Secy/General Counsel
Susan M NeumannVP:Corp Communications & Public Rels
Kelcey E HoytDirector:Investor Relations
18 REFEX REFRIGERANTS LTD Refex Refrigerants Ltd. refills refrigerant gases in air conditioners, refrigerators, and cooling equipment. Key Executives for Refex Refrigerants Ltd (REFX) Tarachand Anil JainChairman/Managing Director
Tarachand Jagdish JainExecutive Director
S GopalakrishnanSecy/Compliance Officer
19 SAN FU CHEMICAL CO LTD San Fu Chemical Company, Limited produces and distributes specialty gases, electronic piping and equipment, liquid/bulk gases, pipeline/on-site gases, and chemicals. Key Executives for San Fu Chemical Co Ltd (4755) Wu Hsin-HungChairman/President Su Tien-PaoVP:Chemical Business
Wang Yao-MingVice President
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20 SIG GASES BHD Sig Gases Bhd manufactures, refills, and distributes industrial gases. The Company's products include oxygen, nitrogen, argon, carbon dioxide, dissolved acetylin, gas mixtures, and fuming gas for various industries. Key Executives for Sig Gases Bhd (SIGA) Peh Lam HohChairman Lau Cheng MingExecutive Director
Juay Yee Luan "Irene"Joint Secretary
Yong May LiJoint Secretary
Koh Beng SanSenior Manager:Finance
21 SOL SPA Sol S.p.A. produces industrial and medical gases. The Company produces and markets oxygen, nitrogen, argon, hydrogen, carbon dioxide, acetylene, ammonia, chlorofluoride carbides, aseptic air, nitrous oxide and gas mixtures. Sol also produces gas for electronics, and liquid and compressed helium. The Company manufactures inhalation home care supplies. Key Executives for SOL SpA (SOL) Aldo Fumagalli Romario Chairman/CEO Marco Annoni Vice Chairman/Co-CEO
Giulio Mario Bottes Co-General Manager
Andrea Monti Co-General Manager
22 TAIYO NIPPON SANSO CORP TAIYO NIPPON SANSO CORPORATION produces various kinds of industrial gases including oxygen, argon, and nitrogen. The Company also manufactures frozen foods and thermos. 104
Key Executives for Taiyo Nippon Sanso Corp (4091) Hiroshi Taguch IChairman Kunishi Hazama Executive Vice President Shinji Tanabe President Tadashige Maruyama Executive Vice President
Yujiro Ichihara Executive Vice President
Yasunobu Kawaguch iDirector
Yoshikazu YamanoSenior Managing Director
Shigeru AmadaSenior Managing Director
William J KrollSenior Managing Director
Hiroshi KatsumataManaging Director
Kinji Mizunoe Managing Director Shinichiro Hiramine Managing Director
Akihiko Umekawa Managing Director Keiki Ariga Managing Director
23 VOLZHSKY NITRIC OXYGEN PLANT OAO Volzhsky Nitric Oxygen Plant OAO produces nitrogen, oxygen, compressed air and technological water. The Company also provides electric, heat and gas distribution services. Key Executives for Volzhsky Nitric Oxygen Plant OAO (VAKZ) 105
Dmitry Ivanovich Shcherbakov General Director
24 YINGDE GASES GROUP CO LTD Yingde Gases Group Co., Ltd. manufactures industrial gases. The Company produces and delivers oxygen, nitrogen, argon, hydrogen, and other gases. Key Executives for Yingde Gases Group Co Ltd (5YG) Zhongguo Sun "Mark" Chairman/CEO Wong Sze Wing CFO/Joint Secretary
Trevor Strutt "Raymond" Chief Operating Officer
Zhao Xiangt iExecutive Director
Mok Ming Wa iJoint Secretary
106

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To Study The Global Market Scenario And Analyze New Applications Of Industrial Gases, UPES

Dehradun, Uttarakhand, India

Conclusion Limitations Scope For Further Studies Bibliography

The objective of the research study can be stated as follows:

B) Rare Gases 1)Helium (He) 2) Krypton (Kr) 3) Xenon (Xe) 4)Neon(Ne)

Fuel Gases Refrigerants

11.2 SAMPLING DESIGN

Industrial Gases Market by Geography

North America Europe Asia-Pacific Rest of the World (RoW)

According to market share, the companies taken into consideration:

Mr. Prasoon Ranjan

Head, Sales and Distribution, Maharashtra , Inox air products

Industrial Gas - Global Demand ($Billion)

Industrial gas Global consumption pattern

North America total = $25 Billion

Industrial Gas Market share (Asia -Pacific )

Taiyyo Nippon Sanso Linde AG Praxair Others

Industrial Gas Market share (North America)

5.4 INDIAN MARKET

5.5. MANUFACTURE OF INDUSTRIAL GASES

Non-Cryogenic Air Separation

SCHEMATIC OF A MEMBRANE UNIT

reactor and high temperatures if hydrocarbons are unavailable:

THE PURIFICATION PROCESSES

Overall figures for purity and production

GAS ACETYLENE HYDROGEN CARBON DIOXIDE NITROGEN OXYGEN ARGON 37

PURITY% 99.5 99.999 99.98 99.999 99.5 99.999

incompatible materials such as oil around the oxygen plant.

ROLE OF QUALITY CONTROL

EQUIPMENTS USED FOR QUALITY CONTROL

QUALITY CONTROL PROCESS: 3.5.1 Flow Diagram CUSTOMER REQUIREMENT

SALES & MARKETING

Feedback & Recommendations

Gas production is largely an extremely environmentally-friendly industry.

With the exception of

5.6 DEFINITION OF THE INDUSTRIAL GASES BUSINESS

-site/ pipeline supply (OSP)

SALE OF GAS VERSUS CAPTIVE SUPPLY (BUY V MAKE)

5.0.1 TYPES OF SUPPLY MODES

APPLICATIONS OF INDUSTRIAL GASES

Percentage 78.0840 20.94 9.34 3.00 .18 .5 .01 0.09 0.5

7.4 The Noble (or Rare) Gases - Neon, Krypton, Xenon

7.5 Carbon Dioxide

COSTS AND PRICING OF INDUSTRIAL GASES

PRIME PRODUCTION/RECOVERY COSTS:

-Repackaging (for different supply modes) - Delivery of gases

HELIUM (recovery) ACETYLENE NITROUS OXIDE SPECIAL GASES

High Low Low Low

Low High High Medium

High Low Low Low

High Medium Medium Medium

Low Medium Medium Medium

8.4 COSTS-VOLUME RELATIONSHIPS`

9.2 BULK SUPPLIES

CRITICAL SUCCESS FACTORS

10.6 COST BASE

THE NEW APPLICATIONS OF INDUSTRIAL GASES

Argon-oxygen Argon-helium Argon-hydrogen

2 Modified Atmosphere Packaging (MAP)

3 HYDROGEN FUEL CELL

7 HELIUM NEON LASER

THE MAJOR DRIVERS FOR INDUSTRIAL GAS INDUSTRY

4 Implications of Eco-Friendly Production

15. SCOPE FOR FUTURE STUDIES