In a new serious of articles, gasworld will present stories of ’life in the industrial gases business’ by true ‘gasmen’ of the old era.
There is a great richness of knowledge that remains despite retirement, and we look forward to contributions from others willing to share informative stories.
This month, we take a look at the early days of the gases business in the former Soviet Union and how AGA re-entered the industry in the Baltic States.
Short historical facts
The countries on the Baltic Rim, Estonia, Latvia, Lithuania, as well as Finland, were part of Russia until the Russian Revolution of 1917 when they received their independence.
Following World War 2 however, Estonia, Latvia and Lithuania became part of the newly formed Soviet Union and at the same time, German Köningsberg (situated between Lithuania and Poland) was also taken over by the Soviet Union and re-named Kaliningrad.
In 1990-91, following the breakup of the Soviet Union and perestroika, Estonia, Latvia and Lithuania again gained their independence.
Before World War 2, AGA, the Swedish industrial gases company, had operations in the three Baltic countries and Köningsberg.
All companies were nationalised after the war and the supply of industrial gases became a part of the Soviet supply system.
Early 1990s – New exploration
AGA Finland was given HO approval to investigate the state of the gases market in Estonia following independence, and used a Finnish market research firm to undertake the first survey of the market.
As a preparation for the first visit to Tallinn, the AGA project team made sure that they had one of their Russian speaking colleagues from Sweden with them on the trip.
As it turned out, when the team arrived in Tallinn, the only person who could not take part in the meetings was in fact the Russian speaker - as the Finnish and Estonian languages are very similar and in Tallinn, the Finnish television had been easily received for many years and consequently all discussions were held in Finnish!
In Latvia, the basic information about the gas supply chain was obtained by the authorities and as with all State-run operations, such data was well organised and readily available.
Then as a second step, AGA encountered a man who had been working with one of the gas distributors who also contributed to the survey. The whole market study cost $50!!!
The procedure for obtaining market information in Lithuania was really very similar to that of Latvia.
In the three Baltic Countries there are around eight million inhabitants, with the total merchant gas market valued at about $8m in 1991. Thus, turnover in industrial gases was about $1 per capita in the three countries, while the corresponding figure in developed countries such as those in Western Europe was more like $30 per capita. AGA was hooked!
The Soviet supply chain
In the Soviet system all major consumers were supposed to have their own production plants and only very few specialised industrial gas companies existed.
Liquid distribution was, in the late 1980s, very under-developed and as railroad transport was almost free of charge LOX, LIN and LAR was mainly distributed in railroad wagons. Typical capacity was 35 and 50 tonnes per railroad tanker.
Liquid air gases to the Baltic countries were delivered from Lentechgas in Leningrad (now St. Petersburg), Cryon in Minsk (Belarus) and Kaliningrad Autogene Zavod (KAZ) in Kaliningrad, while acetylene was produced in these three locations as well.
GOX and GAN were produced by gas companies in small Russian GOX plants, ranging between 0.5-2 tonnes per hour in size, with between 4-5 production units in each country.
Similar sized plants could be found at major engineering works, military installations and shipyards in the area. Bear in mind, that there was relatively little heavy industry in the Baltic region, with only one steel plant located in Latvia and a fertiliser plant situated in Lithuania.
The majority of gases were distributed in 150 bar cylinders with valves of Russian standard, while all types of gas had the same valve outlet except for acetylene.
Rent for cylinders was applied, as all industry was state-owned! The market was totally unsophisticated and, as an example, argon as a shielding gas was hardly heard of - consumption of carbon dioxide for food applications has been limited in application.
In next month’s issue, we bring you Part 2 and discover just how AGA successfully entered the Baltic market.