Asian gas market revenues grew by 10% between 2004-05 to reach US$570 million. BOC (Linde Group) is the largest gas supplier in the region, where it began trading in the first half of the 20th Century. The company is the main supplier in Pakistan and Bangladesh, but has slipped from the number one supplier ranking in India, a position now held by Praxair.

Other major companies that are developing business opportunities in the region, particularly in India, include Air Products and Air Liquide. Linde and Air Liquide have established engineering divisions in India too, to build ASUs for the local market. Through the acquisition of the BOC Group, Linde now has a significant presence in the region. Many small to medium sized companies operate in the South Asian region, apart from in Sri Lanka. In India alone there are more than 250 gas companies, many operating their own small cylinder filling plants.

Bangladesh awaits growth
Revenues from the industrial gas business in Bangladesh fell to US$ 28 million in 2005, a dip of 16% compared with the previous year's earnings. BOC Bangladesh (BOCB) has a big slice of the market, followed up by several smaller players, linked mostly to the ship-breaking business.

Present in Bangladesh for over 50 years, BOCB hit a rough patch from 2001-2004 due to a downturn in the ship-breaking industry, when it cut production sites from five to three, and consolidated its dissolved acetylene manufacturing at Dhaka.

As economic conditions improved, BOCB added a five tpd carbon dioxide plant in 2005. The company has three production centres - in Tejgaon, Rupganj and Shitalpur. Its turnover now exceeds Tk 1.25 billion (US$18m).

The company has capacity for 80 tons of liquid ASU gases per day and 15,000 metric tons of welding electrodes per year. These include liquid and gaseous oxygen and nitrogen, argon, acetylene, carbon dioxide, dry ice, refrigerant gases, medical oxygen and nitrous oxide.
There are about eight minor companies operating in the Bangladesh market, mainly to be found in the Chittagong or Dhaka areas. The most notable are Chittagong Oxygen and National Oxygen. Most of the companies operate small gas plants (from China or India) to fill cylinders, and focus on the ship-breaking business.

There are also a number of gas cylinder distributors located in the main centres of Bangladesh. Demand is geared towards basic applications, such as cutting and welding (especially ship-breaking), steel and engineering and some chemical/pharmaceuticals demand. Sophisticated gases are in limited demand due to the lack of industrial development in the country. Large gas fields in the Bengal Gulf could potentially attract increased construction and oil and gas support services and boost future gas demand, although Bangladesh has been slow to exploit these reserves. Plans for a petrochemicals complex on the Burmese border and a related LNG plant are also under discussion.

Gas market mirrors India's success
According to current growth forecasts, India could be the World's 5th or 6th largest gas market within the next 20 years. The Indian market totalled approximately US$490 million in 2005, up 12% on 2004 revenues.

Air Liquide India's Managing Director, G. Rajeshwar Rao, says that the company's most important markets are steel mills, fabrication, and the chemicals and pharmaceutical industries. He singles out automotive and fabrication markets as notable growth areas.$quot;Good growth is expected, due to a boom in the economy,$quot; Rao told gasworld, adding that Air Liquide has plans to expand its operations in India.

Headquartered at Bangalore, Praxair India is India's largest industrial gas producer, with more than 35 operating locations and 2005 consolidated sales of $120 million. Recent announcements include a vacuum pressure swing absorption plant to supply gaseous oxygen to Reliance Industries Limited's Hazira mono ethylene glycol (MEG) plant, and a 700tpd cryogenic air separation plant at Steel Authority of India's (SAIL's) Durgapur Steel Plant, north of Kolkata.

Other commissions include an 875tpd plant for Tata Steel at Jamshedpur, two 2,500tpd cryogenic oxygen plants for Jindal Vijaynagar Steel Ltd. and additional plants for Kalyani Steels, Saint Gobain Glass India and Haldia Petrochemicals. Praxair has also installed innovative non-cryogenic on-site plants for customers such as Usha Martin, Timken, Epcos Ferrites and Sundaram Fasteners.

The compressed natural gas (CNG) cylinder market is enlarging daily in the region, prompting expansion moves by gas cylinder suppliers.

Rama Cylinders announced a new manufacturing facility for high-pressure 400 bar hot-spun seamless cylinders used for industrial gases in the Kutch district of Gujarat state. The plant will serve both domestic and export markets and should be operational in six months. The company exports around 50% of its products. $quot;The scenario looks good in Pakistan and Bangladesh, as more infrastructure investment is coming up,$quot; the company told gasworld.

Indian Seamless Metal Tubes (ISMT) debottlenecked its Pune-based alloy steel production from 190,000 to over 300,000 tons per annum in the first half of 2006. This propels ISMT, which uses Praxair's CoJet gas injunction system in its oxygen furnace, into the World's top five integrated seamless tubes manufacturers.

Everest Kanto Cylinder (EKC) says its order book for the manufacture of CNG and industrial gas cylinders is full for the next 12 months. The company is supplying defence authorities with specialized gas cylinders, and plans to raise the capacity of its new plant at Gandhidham in Gujarat from 340,000 to 500,000 cylinders a year.

BOC India (BOCI) has installed its first merchant plant for the southern Indian market in Hyderabad. Largely designed in-house by BOCI's project engineering team, the cryogenic plant will produce liquid oxygen, nitrogen and argon.

Managing director ER Raj Narayanan said: $quot;The emerging predominance of the south in India's industrial development driven by an overall growth in various key sectors has boosted BOC's confidence to invest in this region.$quot;

In June BOCI entered into a long-term ASU supply contract with JSW Steel Limited (JSW). At JSW's plant at Bellary in southern India, BOCI will set up one of the largest build-and-operate on-site air separation plants in Asia. BOCI has also commissioned a state-of-the-art liquid compression facility at a greenfield site in Pune, and a special gases manufacturing facility at Taloja.

MSPL Gases India is planning Rs 400m (US$ 9m) of new investment for the steel industry in Andhra Pradesh and Tamil Nadu, following on from its recent installation of a 50tpd oxygen plant for SAIL. MSPL Gases Limited is a subsidiary of the Baldota Group, a leading South Indian industrial gases producer. MSPL Gases' current capacity is 100 tonnes (oxygen, nitrogen and argon gases), 85 per cent of which is for industry consumers. The remainder is for the hospital sector.

The market for cryogenic equipment and expertise is expanding, according to French company Cryolor's Sales Director Michael Blondin. $quot;Cryolor's activity in India is directly linked to what is going on in the industry, in particular in the steel industry in India.$quot;

Cryolor's cryogenic storage and transport products' sales in India reached historic levels in 2006, despite competition from local manufacturers.

As a result of India's improving infrastructure, demand is now shifting away from distribution based on smaller capacity, truck-mounted tanks to large volume, optimised cryogenic semi-trailers, like those used for many years in other markets in south-east Asia. Cryolor is optimistic that Pakistan and Bangladesh might introduce similar tankers in the not-so-distant future.
The Indian Space Research Organisation (ISRO) has developed a launching stage that uses cryogenic propellants - liquid hydrogen and liquid oxygen. This makes India the sixth nation to have developed a cryogenic stage in rocketry, following the US, Russia, European space agency, China and Japan. Inox India recently provided a complete remotely-operated Auxiliary system incorporating a liquid nitrogen storage and distribution facility for the Indian Space Department's satellite testing programme.

India's first hydrogen filling station is due to open early this year. Indian Oil Company will offer hydrogen refuelling capabilities at a petrol pump near Nigambodh Ghat. It delivers hydrogen and hydrogen mixed with CNG, allowing up to 1000 hydrogen fuel cell vehicles to refuel per day.

Pakistan shows modest growth
Gas revenues rose by 2% in 2005 to US$41 million in Pakistan, where BOC Pakistan reigns supreme with 70 per cent of the market. BOC has a number of important production facilities located throughout Pakistan, namely Lahore, Hub, Karachi and Port Qasim. Poor relationships with India coupled with problems in Afghanistan have led to a difficult business environment.

Smaller independent gas companies also operational in Pakistan including Fine Gas and Bawany Air Products.

Fine Gas is an unquoted public limited company and was established in 1978. The company has an important position in the supply of industrial gases in the Lahore region of Pakistan but has recently expanded into the south of Pakistan. Ranking second in Pakistan, Fine Gas has locations at Lahore and Karachi. This company has a trading relationship with Air Products Middle East.

Bawany Air Products' (BAP's) first plant started operating in 1983. The company is listed on the Karachi Stock Exchange. BAP is considered Pakistan's third largest player.

The market for merchant gases is oxygen driven, with a number of mini-mills (EAFs). The formerly significant ship-breaking business has declined. The nitrogen market is under-developed with few applications other than refining/chemicals driving demand. Demand for CO2 has grown, particularly following the start-up of BOC's CO2 plant - the improved availability has helped promote demand.

Sri Lanka 'poised' for rapid growth
Sri-Lanka's gas revenues for 2005 stood at around US$9 million, up by US$1 million over the previous year. The growth was driven in part by reconstruction following the tsunami in 2004. Ceylon Oxygen is Sri Lanka's leading industrial gas manufacturer, with a market share of 80%. Cylinder gases constitute about 60% of the company's sales revenues. Last year majority shareholder, Norway's Yara Industrial, sold its 70.85% stake in Ceylon Oxygen to private equity fund Actis South Asia Fund 2 LP for NOK 15 million (US$2.4m).

Actis believes that the business is 'poised for rapid growth,' and says that the past two years have seen Ceylon Oxygen's sales increase 20% annually. Ceylon Oxygen has historically served Columbo Dockyard with welding gases. Other markets include the food industry and medical applications.

Messer also operates a small joint venture in Sri Lanka. The company entered the market in 1997 when it acquired a small private company. It owns a small Chinese built cylinder filling facility.


The Future
There is no doubt that the Asian region is set for considerable growth in the gases business, lead by India. Internal demand for steel and chemicals, combined with export potential by being a low cost producer, will result in significant tonnage ASU capacity being required that is increasingly being outsourced.