Up until 40 years ago oxygen was only produced commercially by the cryogenic distillation of air. Product was either delivered as gas or a cryogenic liquid (LOX). This cryogenic process is very energy intensive, results in a high operating cost and, by virtue of the very low operating temperatures, uses many special components that are both expensive and costly to maintain.
Oxygen produced by the cryogenic process is typically produced at greater than 99 percent purity so that it can be used for essentially all applications.
For very small applications oxygen is delivered in cylinders. As the demand increases it is more economical to use vaporized LOX delivered in cryogenic transports to onsite cryogenic storage vessels. For large industrial applications gaseous oxygen is generated onsite.
To optimize the delivered oxygen cost, it is necessary to balance the capital required to build the oxygen generation and delivery equipment (CAPEX) and the operational costs of production and transportation to the use site (OPEX).
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