When GASAL was established, its shareholders observed that large centralized facilities, connected to a network of pipelines, were more effective and efficient in producing industrial gases rather than scattered on-site units or truck base supply. The motivation for the joint venture was to ensure process safety, highest reliability and energy efficiency. The production of industrial gases is a capital and energy-intensive process: having larger centralized production units brings costs down thanks to economies of scale and scope and to higher efficiency and asset utilization.
Such advantage is illustrated by the following example:
Suppose we have two companies: the first requiring oxygen for its production process, and the second requiring nitrogen. If each company uses chooses self production and uses energy to separate the air into its components (21.5% oxygen, 78% nitrogen and 1% noble gases), the capital and energy consumption will be doubled leaving valuable product unutilized. If the two companies choose to outsource their requirements, GASAL can produce both products in one unit leading to an efficient use of capital and energy.
Outsourcing industrial gas requirements to GASAL represents a strategic decision, not limited to capital and cost efficiency. In fact there are other important benefits such as increased supply availability and flexibility. GASAL has multiple plants connected to its pipeline network, thus creating the necessary capacity redundancies to ensure uninterrupted supply; this would not be possible with individual single on-site units. Finally our customers often require peak quantities that only a pipeline system with redundant capacity can cater. This offers the largest degree of flexibility eliminating the need to procure the requirement in liquid (often from abroad) and the associated cryogenic trucks traffic.
The over the fence supply is a specialized service for the long-term supply of large volumes of industrial gases based on over 110 years of know-how from the Air Liquide Group. This model considers that:
- Industrial gases are supplied on a long term basis by combination of pipeline networks connected to multiple production plants and/or by large plants built at the customer site and/or by cryogenic liquid installations.
- GASAL would design, build, and operate the assets necessary for the supply, and bring the related capital, people and expertise, bearing the execution and operational risks as well as providing the customers with a competitive price.
It is often a challenge for customers to develop and maintain expertise in ASU construction and operation since production of industrial gases is not generally considered as a customer’s core technology/business; while it is the principal business, for GASAL and Air Liquide.
In an over-the-fence supply solution, GASAL assumes responsibility for all phases of the project execution and operation. This allows our customers to focus their resources on their main/existing assets. GASAL will continue to develop its staff and expertise over the long term to ensure the highest quality supply to our customers.
For more details on the benefit that the outsourcing of the industrial gas supply brings to our customers, click on the following: