To win the Kentucky Derby or the Grand National, you would want to be riding a thoroughbred racehorse. On the other hand, to cross the Sahara, enduring days without water, you might prefer to ride a camel. Speaking of business ownership models in the industrial gases sector, picking the right business vehicle is also a key to success. There are many different models, and each might have its merits for a specific set of circumstances at a certain moment in time.
For many steel producers and refineries there is an alternative to engaging with an industrial gases company – the option to own and operate a ‘captive’ air separation unit (ASU) or steam methane reformer (SMR). In the US and Western Europe, industrial gas companies have successfully made the case that their operations expertise and the benefits of pipeline gas supply, with multiple feed plants and multiple customer offtakes, ensure for economic efficiency.
In other locations, such as Egypt, Russia and China, there are still many ‘captive’ industrial gases production plants integrated into the chemicals, refining and steel sectors. In these geographies, the industrial gases production capacity in captive plants is as high as 50% in some sectors. ‘Outsourcing’ the operation of these captive ASUs and SMRs represents a large and attractive growth opportunity for industrial gases companies around the world.
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