Air Separation Gases

The principal industrial gases are derived from air and occur in air in the following proportions—oxygen, 21%; nitrogen, 78%; and argon, 0.9%. Rare gases occurring in and recovered from air in much smaller quantities are krypton, neon and xenon. Carbon dioxide, helium and hydrogen are also present, but commercial quantities of these industrial gases are derived primarily from other sources.

The industrial gas industry has been undergoing significant consolidation for the past ten years and is now highly concentrated. The top five producers account for 60–70% of the global market. In 2010, the following four companies dominated the industry worldwide—Air Products and Chemicals, Inc.; L'Air Liquide, S.A.; The Linde Group PLC; and Praxair, Inc.

Primary factors increasing the consumption of industrial gases are growth in the Asian economy, high energy costs, and climate change initiatives. Increasing demand from the iron, steel and chemical industries, as well as for gasification of coal and coke for clean energy, is expected to significantly increase demand for industrial gases. With the developing world poised to consume large quantities of steel to improve infrastructure, demand from those regions is positioned to grow at above normal rates. Improvement in the global economy and growth in Asia led the industrial gas business to strong performance in recent years. The Chinese industrial gas market has almost doubled its value in the past few years. India and the Republic of Korea are also expected to double their consumption volumes in the next few years. Demand from petrochemical, chemical and refining operations is making the Middle East a significant player. The emerging economies in Eastern Europe are also creating a major market, along with the major South American countries.

The recent global economic downturn, however, resulted in falling demand throughout the world. The rebound from the slowdown has also been universal, but the rate of growth is higher in the emerging economies than in the developed economies. Asia and South America are adding capacities at a faster pace than other regions. The industry has also been seeing increased revenues as well as mergers and acquisitions that refined approaches to smaller, profitable markets, except during the crisis periods between 2008 and 2009. The forecast period looks very promising, but the debt burdens of some important economies could have an adverse impact on the growth of the industrial gas industry. The U.S. market for goods has increased to offset the reduction in imports caused by currency fluctuations and has contributed to an increase in industrial gas usage.

The growing need for alternate sources of energy is increasing demand for industrial gases. Large-scale gasification plants and oxygen-based gas-to-liquid, coal-to-liquid and coal-to-chemicals plants consume enormous quantites of oxygen. The next ten years could see a potential increase of over 200 thousand metric tons per day of oxygen to satisfy the requirements from clean fuel demand and the need to reduce emissions of greenhouse gases. Increasing volumes of liquid natural gas (LNG) have led to considerable demand for nitrogen. Increased spending on infrastructure developments is also a strong area of growth for industrial gases. Governments have been introducing stimulus plans that target several areas, including infrastructure, that can boost the economy. European governments such as France and Germany, along with Canada in North America, devote a larger share of spending on infrastructure, ranging from 20% to 35%. In the United States, that percentage is much lower. Innovations in current technology are ongoing to reduce capital costs and drive up process efficiency.

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