From semiconductors to steal and even molecules, the world has been dealing with pandemic-related product shortages for nearly two years now but for Absolute Air the end is in sight.

Source: Absolute Air

Absolute Air’s plant in Fairbult, pictured from a drone in December 2021

Building an air separation unit (ASU) during coronavirus (Covid-19) has been challenging, especially for an enterprise newly-established and entering a field dominated by major international gas companies.   

The ripple effects of the global supply chain disruption caused the start-up of Absolute Air’s new ASU near Minneapolis set back from early this year.

But Ned Pontious says the company expects the plant to start producing cryogenic liquid oxygen, liquid nitrogen and liquid argon from April.

“The project slowed a bit and then like everyone else we’ve had supply chain issues,” Pontious, President of Absolute Air, told gasworld.

Absolute Air – set up by five independent industrial gas and welding supplies distributors (Toll Gas & Welding Supply, Mississippi Welders Supply (MWS), Minneapolis Oxygen, A-OX Welding Supply, and Huber Supply) – have had to deal with delays, product shortages and rising costs just like virtually other business, but the end is in sight for the Minnesota-based business at least.

“Once we got into the ground, it was winter and then Covid hit so we have had crews out, Covid challenges and most recently, last nine months, we have had supply chain issues,” Pontious said.

“Our original schedule was to get this up and started end of calendar year 2021. We had to slip that to February/March timeframe and now we are looking at the second quarter of 2022, April timeframe. We are doing all the instrumentation, wiring, mechanical piping right now. All the major vessels are in place, we are just tying the last bits and hopefully begin the commissioning soon.”

Absolute Air’s debut plant is not alone in being delayed. An additional 12 new/expansions and replacement ASUs are expected to come on-stream in 2022/3, according to Intelligas Consulting’s Maura Garvey, and gasworld US editorial board member. Several of these new ASU were delayed from 2021 reflecting supply chain and labor issues that have been an ongoing problem during the pandemic.

Like most businesses, Absolute Air has been contending with various challenges caused by the coronavirus (Covid-19) pandemic, from container ship availability to sick sub-contractors. Pontious tells of one episode when a shipping container with a vital piece of cryogenic equipment was diverted from Los Angeles to New York due to delays in unloading cargo at American ports.

“We’ve had issues with some of the steal, we had one compressor that was coming out of India that was delayed on shipping and couldn’t get it into the West Coast,” Pontious said.

“Normally they would come into Long Beach, California, but they basically had to route that around to New York and then on rail from there [to Minnesota]. It’s all piped up and ready to be installed, but it’s just another hold up. We had another back-up generator that has electrical control boards in it, and they couldn’t get the control boards, so instead of an off-the-shelf piece of equipment it ended up being a 34-week lead time for a small back-up generator.

“The Covid stuff, the contractors were working out in the open, so it wasn’t really an issue apart from some of the smaller sub-contracts that bid out and they delayed their bid by two weeks because their families were down sick with Covid.”

The plant is in Faribault, about 50 miles south of Minneapolis, and has been built by New Jersey-based AMCS Corporation after breaking ground in September 2019. Pontious says the plant will produce 300 tons per day (tpd) of liquid oxygen and liquid nitrogen, and 5 tpd of argon to serve customers of the five independent distributors, plus some new accounts.

“We’re still looking for customers, we have a big chunk of it sold out, and we have been fairly public with the plant and put a fair good demand on the plant because there are five independent distributors that have created Absolute Air,” Pontious said.

“Those companies all have a fairly high demand and have a big demand for oxygen and liquid argon. We have also taken a couple key accounts from our competitors and have started delivering those ahead of the plant starting up, so we’re anxious for the plant to start making molecules.”

Regional demand

Pontious, who retired as Norco President in February 2018 after nearly 20 years at the helm, has prior experience of setting up two ASUs for Northwest-based Norco in 2002 and 2009. Pontious is not concerned about Absolute Air entering a crowded marketplace in the Twin Cities region, with Air Liquide-Airgas recently starting up a new ASU also near Minneapolis (Cottage Grove). Air Products announced in 2018 it was also building an ASU in the Twin Cities area that “was scheduled to be onstream in early-to-mid-2020”.

“There will be some extra product, we realize that the market was underserved for years in the area and since we have announced our plant, Air Liquide-Airgas announced built and started a plant also in the Minneapolis area,” Pontious said.

“We realized that would happen though because they shut down a plant in Wisconsin that was 50 years old and we thought they would shut it down and build another one somewhere in the Minnesota-Wisconsin area. Praxair was previously the only plant in the area.”

Pontious believes the Absolute Air plant is a significant development for the distributor scene, which has seen a flurry of acquisitions and the emergence of Meritus Gas Partners recently.

“There’s a lot of people watching this project to see how it works out for us, what sort of partnerships we have going forward, other customers and markets,” Pontious said.

“I get a lot of calls from people who are interested to see how we do, with the continued consolidation of the majors the mid-sized distributors are becoming larger distributors and by a natural evolution I think you will see a certain number of other distributors maybe partner up to build their own plant so that they remain independent.

“It’s a way of securing independence. The five guys that make up Absolute Air, they have all been family businesses for 50-70 years. One of them – Toll Company – has been an employee-owned company for a number of years so they are not going to sell out. I think there are people who are entrenched in the market as independents and want to remain that way.”