Nitrogen is one of the three primary air gases; it is produced in the air separation process, alongside oxygen and argon.
The gas serves some of the most profitable end-user sectors in the world, notably chemicals, petrochemicals and refining, and steel.
The food and beverage industry now also heavily relies on nitrogen, and liquefied nitrogen, for the preservation of food, and fast freezing and chilling.
Approximately 75% of nitrogen market sales are from the manufacturing sector, specifically chemicals, oil and gas, glass and steel segments. The remainder of sales are made up from the food and electronics sectors.
The financial crisis
The global economic crisis has caused production to be cut across many sectors, which has directly impacted the levels of gases being ordered.
For nitrogen this has not been such a concern, as demand for the gas is very much tied to non-cyclical sectors, such as food and beverage and industrial inerting, which have not experienced a downturn like that of the steel industry for example.
Joseph Horn, Global Head of Bulk Product Management at Linde, told gasworld, “Demand for nitrogen has fared better than oxygen. Nitrogen volumes remained stable between 2008 and 2009, declining by less than 10% globally.”
As economies around the globe begin to improve from 2009 lows, nitrogen volume trends are looking very positive.
As with oxygen, the merchant and packaged gas nitrogen supply has improved from a tight situation in most markets globally in mid-2008, to where product is now available in sufficient quantities to drive growth as the economy rebounds.
Pricing levels of nitrogen have remained stable, and it is expected that as the prices of oil and gas rise to the levels they were at before recession hit, nitrogen demand in those markets will also rise.
There is good growth potential for nitrogen in the prepared foods business.
Fast freezing using nitrogen or liquid nitrogen is one of the most effective ways to preserve food to ensure it is of the highest possible quality when defrosted by the consumer.
The major industrial gas companies continue to invent new, more efficient freezing and chilling equipment and technologies to support the prepared foods business.
Food being a non-cyclical sector, this is a very reliable, safe sector to invest in, and with customer satisfaction crucial to the market, supermarkets and other end-users are always keen to invest in the new systems.
Other growing markets for nitrogen include electronics, and oil and gas exploration and recovery.
As with oxygen, nitrogen will also provide the foundations for many green technologies trialled by the majors over the next few years.
A topic on everyone’s lips at present, global warming is top on the gas companies’ lists in terms of research carried out to try to make processes greener. Nitrogen’s role in these investigations will be vital, meaning there is potential for increased demand as the new processes become common place.
On a regional basis, Horn commented, “The developing economies in Asia, South America, Eastern Europe and Middle East provide attractive long term growth opportunities.”
According to the most recent Spiritus Consulting figures, total world capacity for nitrogen is approximately 1.5 million tons per day, with the North Pacific region having the highest percentage, followed by Eastern Europe and North America.