Praxair, Inc. has recently consolidated its position in the carbon dioxide (CO2) market in the South East region of the US, by announcing a long-term contract with US Nitrogen LLC to purchase by-product CO2.
On top of this, Praxair will build, own and operate a new CO2 purification and liquefaction facility in Tennessee, which will start up towards the end of 2017.
By signing this deal Praxair will be increasing its CO2 production capacity in the most important region for industrial gases within the US. In 2014, the commercial industrial gas market in the South East reached peak revenues of approximately $4.8bn, making it the most profitable region for industrial gas within the US. The CO2 segment of the industrial gas market accounts for roughly 16% of revenues, generating roughly $750m in 2014.
The South East gases market is shared between a number of Tier One and Tier Two producers and distributors. Praxair is currently the sixth-largest company in the region, commanding roughly 13% of the industrial gas market. However, the company is looking to increase this figure as it recently announced that it will be constructing an ASU in South Carolina. The largest share of the company’s revenues in the region stem from onsite production, but Praxair also gains healthy revenues from bulk and cylinder supply modes. However, CO2 is not Praxair’s main industrial gas product in the region, with a high percentage of its revenues being generated from the production and sale of hydrogen.
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