Imagine having a raw material that is 78% pure and there is no royalty, lease or other fee associated with extracting it.
Why on earth would you go and buy a refined version of the raw material at $5 to $17 per m3? The only reason I can think of is that you never thought to extract it yourself.
I’m talking about Nitrogen gas. It makes up 78% of the atmosphere. With a simple on-site generation system, you can make your own with the purity you specify, test it for purity, and store it ready for use, at a cost in the range of 40-80% of buying it in from a gas supplier.
No more relying on bottle banks or bulk gas shipments. Just make your own at $3 per m3.
Obviously generating your own nitrogen gas isn’t the right choice in every situation.
When not to make your own.
When you switch from buying to producing nitrogen, you’ll obviously be buying a nitrogen generation system. This means you’ve got more equipment to monitor and maintain. In an ideal situation you’d want to be sure that your existing maintenance team can handle the extra little bit of overhead.
Then in order to make this a really viable transition, you’ll need to be sure that the savings from producing your own Nitrogen pays for the generation system in an acceptable time frame and then puts you squarely ahead on the financial statement. After all, your only ongoing costs for Nitrogen at this point are maintenance and power.
For smaller users of nitrogen, upfront investigation is required to see what your particular capital investment and time to pay off would be.
When to make your own.
If you are using large quantities of gas and can handle the minimal extra overhead of maintaining a nitrogen generation system then you are going to be able to slash your nitrogen costs by at least 40% but possibly all the way up to 80%.
It’s a very simple business case but as always, it’s best to work through this on a case by case basis.
If you need help reviewing if you should switch to Nitrogen generation from supplied gas then give the team at Pye-Barker a call on 404-363-6000 or drop us a line sales@pyebarker.com and we can help guide you to the right answer for you.
