Industrial gases are often critically important to the manufacturing, processing, packaging, testing or other operation for which they are required. Any interruption in the supply of gas of consistent quality will compromise or halt production, with major cost implications in the form of wasted material, inferior quality or lost production and sales.
Distribution is a vital part of the industrial gas supply chain, that strives to deliver the correct gases, of the correct quality, to the correct location, at the correct time and in the correct mode of supply.
The selection of supply mode is generally based on specific characteristics of the gas demand, in terms of gas purity, fluctuation in volume and flow rate, proximity to existing supply systems, ease of access to the customer’s site, and available space for storage or equipment installation and logistics.
Atmospheric gases are the core products of the industrial gas industry, but these are complimented by a wide range of other gases from various sources, including some fuel gases, but excluding natural gas.
The lowest cost source of very large volumes of atmospheric gases remains the cryogenic Air Separation Unit (ASU), and it is also the preferred source of high purity gases in the range 99% and higher. Blast furnaces, steel plants, non-ferrous smelters, float glass lines and petrochemical refineries are among the largest volume users of atmospheric gases and their demand often justifies the construction of a dedicated on-site ASU.
Where the required purity is less than 97% and the flow demand is reasonably consistent, non-cryogenic separation technologies, including membrane permeation and pressure or vacuum swing absorption, can be used successfully.
Gaseous products from an ASU are typically supplied over the-fence by pipeline to the primary customer, and if surplus capacity is available, also supplied to users further away by pipeline. Substantial pipeline networks exist in all major industrial centres, and high value gases like hydrogen are piped over distances greater than 100km in some instances.
Once a supplier has invested in a pipeline system they generally enjoy distinct cost advantages in that region, over any alternate modes of supply.
Most ASU sites also liquefy gas into storage tanks to provide back-up in the event of any plant outage for whatever reason. Beyond the range of pipeline supply, customers form part of the merchant market and bulk liquid would be the next preferred supply mode for volumes greater than 10 tonnes per month.
Smaller volume gas requirements, including most speciality and laboratory gas applications, will normally be supplied as gases packaged to suit specific needs. An intermediate supply mode between bulk liquid and packaged gas that has gained popularity in the past few years is known as mini-bulk or small liquid delivery.
Gas properties affect distribution
The practicality and economics of gases in distribution are greatly affected by their physical properties, like critical pressure and temperature.
Carbon dioxide, butane, propane and ammonia are examples of gases whose critical temperature is high enough to allow their transport as liquids in relatively low pressure cylinders at ambient temperature.
The phase change from gas to liquid results in a significant reduction in volume, allowing greater storage efficiency than permanent gases, like hydrogen, oxygen and nitrogen, whose critical temperatures lie far below ambient.
Safe gas packaging adds convenience and value
Unlike most consumable products, very few gases have been successfully packaged in disposable containers, and the demands of safety and integrity imply that even straight forward high-pressure steel gas cylinders are relatively expensive, especially when used to convey low-spec products like industrial nitrogen or oxygen.
The replacement cost of a fairly standard cylinder is around 10 times the selling price of the gas it contains. This means two things; the supplier cannot afford to lose cylinders, and the rental cost will be significant.
The management of cylinder inventories is an ongoing challenge for the industrial gas industry and also for all major customers using packaged gases.
Many large industrial sites with multiple gas delivery points find it cost effective to contract their gas supplier to operate a gas storage depot adjacent to their premises and assume full responsibility for the management of their own gas storage assets throughout the site.
The most popular material of construction for high pressure gas cylinders is carbon steel, and for durability and safety these are unrivalled for general industrial use, although the quality standards of modern cylinders allow gases to be stored at pressures up to 400 bar, but the majority of cylinders in use around the world are probably rated at only 200 bar.
Given that the net mass of 50 litre capacity industrial cylinders is between 65kg and 75kg, their storage capacity is disappointingly small. When filled with low density gases like hydrogen and helium, the product forms only between 1% and 4% of the total package mass. For popular industrial products like oxygen, nitrogen and argon the storage efficiency rises into the 12% to 20% range for 200 bar cylinders and as high as 40% for cylinders pressurised to 300 bar.
The manufacture and supply of packaged gases is a labour intensive business that relies heavily on transportation, usually with purpose built freight vehicles. To meet the constantly growing need of customers across a vast spread of different industries, gas companies need to invest in additional resources, especially gas cylinders, in order to maintain service levels and to retain their market share position.
Significant investment is also aimed at providing greater convenience and efficiency to customers and ensuring that required minimum purity levels are met. These value additions to the basic gas products explain why market price of packaged gas is significantly higher per unit of volume than products supplied in bulk.
Often the gas molecules delivered represent only a minor part of the final product cost.
Quality of distributed gases
Atmospheric gases sourced from conventional ASU’s are characteristically high in purity, partly because the usual contaminants - air and moisture, cannot exist as gases at cryogenic temperature.
Gas packaging operations need to exercise constant vigilance to ensure that high purity raw materials are not contaminated during the filling process.
Cylinders returned empty from customers are the biggest potential source of contamination, because unless fitted with positive residual pressure valves, the possibility of the valves having been left open cannot be ignored. Vacuum pumps are used to remove moisture and prepare cylinders for re-filling, and quality standards are ensured by appropriate sampling and analysis.
Specially equipped cylinders like Altop from Air Liquide and Integra from Air Products that are fitted with an integrated valve, pressure regulator, contents gauge and safety shut off, provide an unprecedented level of convenience in welding and cutting applications.
Using an integrated filter, called a built-in purifier, Air Products BIP cylinders guarantee 10 ppb oxygen and 20 ppb moisture, and only 1 ppb halogenated hydrocarbons in the ECD gases, ultra high purity gases for gas chromatography (GC) and other specialised applications, such as air sampling.
Gas packages improve productivity
Gas supply in single cylinders inevitably results in periodic work interruptions each time a cylinder is depleted.
Cylinders are often bundled together and interconnected with a manifold to increase the volume of gas available and improve productivity in use. Industries such as offshore oil exploration have for years demanded a 16 cylinder pack or ‘Quad’ and recently these have been redesigned to carry 64 cylinders.
Atmospheric gases are also offered in portable cryogenic containers or liquid cylinders that range in size from the equivalent of about 15 high pressure gas cylinders up to 140. These may be filled on site or delivered on an exchange basis depending on the supplier’s facilities.
Marketing opportunities in gas distribution
Given the fact that gaseous products are invisible, the only opportunity for suppliers to apply their brand or trade-mark is on the packaging, distribution vehicle or dispensing equipment.
The obvious weakness here is that steel cylinders are notoriously difficult and expensive to maintain in clean, freshly painted condition, due to the rough handling and aggressive industrial environment they experience.
Liquid bulk tankers do offer large mobile surfaces to carry logos and promotional messages, but the high duty cycles required of these expensive, dedicated vehicles reduces their availability for maintenance.
The cost of gas distribution by road is a significant component of final market prices. In many markets this is aggravated by long distances between bulk gas production facilities and the location of industrial centres. Various distribution strategies are adopted to meet these challenges, including split loads, product swaps between suppliers, or even distribution by third party operators in generically marked vehicles.
While this may compromise the gas suppliers brand visibility, very significant cost reductions are available.
Distribution builds competitive advantage
Innovative solutions and added value features are introduced continually by gas suppliers to differentiate their products, and the advantages of modern packaging options are considerable.
The keys to competiveness in the industrial gas industry even more so than manufacturing generally, are low production cost, consistent quality, efficient customer service, optimised.