Someone (ultimately, you) must pay for these costs associated with purchasing gases as liquids:

• The cost of the energy required to liquefy the gas so that it can be transported to and stored at your site. It takes more than twice as much energy to make liquid oxygen or nitrogen than it takes to make and deliver these products as gases from an on-site gas plant.

• Amortization of the supplier's cost for the equipment which is needed to liquefy the bulk merchant liquid products, and store them in large tanks until they are loaded into a trailer for delivery to you. 

• A portion of the costs required to purchase and maintain the delivery trailer plus costs associated with providing the highway tractor, driver and fuel; as well as the product losses which occur when liquid is transferred into the trailer. 

• The portion of your previously-purchased product which is vented from the tank at your site (to make room for the newly-delivered liquid) and, in some cases, the residual liquid which remains in the trailer after your tank has been filled.

When you consider all the costs, inefficiencies and losses that are avoided when you switch from buying liquid products on an ongoing basis and arrange to have the products you need made at your site as gases - it is not hard to see why you can realize significant savings with UCG on-site production and pipeline distribution arrangements. On-site produced gaseous products are immediately delivered, through your in-plant pipeline, to your usage points.

Switching from vaporized liquid to on-site gas generation does not eliminate the need for a liquid storage and vaporization system. Liquid storage and vaporization systems will continue to be used to supplement on-site gas production when demand suddenly increases, and to replace on-site produced product during maintenance shutdowns of the production unit. However, the number of tanks needed for backup may be fewer than the number used to support continuous demand.

With a cryogenic gas production plant on your site, the amount of liquid consumed to back up or supplement on site gas production will be only a small fraction of the volume which would be purchased if vaporized liquid was used to meet the entire demand for nitrogen or oxygen.  In many cases, the onsite production unit can be designed and operated to co-produce the small amount of liquid needed for meeting demand peaks and replace liquid lost to evaporation due to heat leak into the storage tank.

The higher your average hourly demand, and the more constant your demand level, the more likely it is that an onsite gas production and supply system will provide significant savings versus using only vaporized liquid products. 

Here are some quick Guidelines for determining how likely it is that you can benefit from switching to, or starting out with, on-site gas production: 

If you use more than two truckloads of liquid nitrogen or oxygen a day:  (Which is equivalent to more than about 30 million SCF/ month or 40 tons per day.)  An onsite gas supply will typically offer very significant savings - usually, several hundred thousand dollars a year or tens of thousands of dollars a month.  If your site consumption is in this category, please contact us to discuss your situation. 

If you use more than one, but less than two truckloads of liquid oxygen or nitrogen a day:  (Which is equivalent to using more than about 20 million SCF/ month or 25 tons per day but less than the 30 million SCF/ month or 40 tons per day cited above.)  An onsite gas supply is likely to be an attractive alternative to an all-liquid supply, in particular if you anticipate growth in demand over the relatively near term. If your operations have nitrogen or oxygen consumption in this range, UCG will be pleased to help you determine if an onsite gas supply system would be a cost effective alternative for all or part of your demand.  

 

Are you confused about weight and volume measurement units?
 

Do you want to reconcile monthly usage with hourly consumption rates? Our easy-to-use usage rate conversion tool or other tools in our online Converter Toolbox can quickly convert your available consumption rate data into equivalent hourly, daily, monthly and yearly usage measures.  Those who prefer printable weight and volume conversion tables should visit our collection of tables for oxygen, nitrogen, argon and carbon dioxide.

A handy rule of thumb for quick estimating, is that, in North America, a full load for most liquid nitrogen and liquid oxygen delivery trailers is about 20 tons of product.  This is equivalent to about 530,000 scf of gaseous oxygen or 610,000 scf of gaseous nitrogen..

Savings are generally at least 20% (compared to liquid) and can be more than 50%.  Savings are usually measured in hundreds of thousands of dollars a year.

No one can tell you exactly how much you might save until they fully understand your needs, have defined the system required to meet those needs, and can compare the before and after costs on a comparable basis. However, UCG can provide a preliminary estimate for the cost of onsite product once we know the type of product you need (including required purity and delivery pressure), your estimated average usage rate, and an estimated cost for power at your site.

Development of a definitive onsite gas oxygen or nitrogen supply proposal requires detailed information about your specific situation, including site conditions, the length of the supply period that you need or want, applicable electric power cost or rate schedules, and details of your anticipated usage pattern, including flow rate variations that occur on a daily basis or on a longer basis such as weekly, monthly, or seasonally.  Recurring peaks can be handled cost effectively if they are identified up-front and incorporated into the sizing of plant components and operating strategies. 

In general, onsite gas production savings will be higher the greater your average usage rate, the less variation in demand that you have each day, and over more extended periods of time, the longer the agreed supply period, the lower the cost of electric power at your site, and, since the assumed comparison is against the cost of using bulk liquid products, the greater the cost which you are paying, or would have to pay for delivered liquid product which can increase significantly over a 7 to 15 year period.

Keep in mind that only a portion of your onsite gas costs will escalate over time - and only for auditable, and often very predictable reasons.  Budgeting for nitrogen or oxygen costs is much more accurate with an onsite gas supply than the cost of liquid, which is subject to unexpected, steep and seemingly arbitrary increases.

You can expect to see significant growth in your savings over the life of your UCG onsite supply contract compared to the alternative of using vaporized bulk liquid products. 

Bulk liquid products require more than twice the amount of power to produce, and have significant diesel fuel and other distribution costs.  All of these combine to raise the price of delivered liquid products at a more rapid rate than the cost of making gaseous products on-site. 

Visit our "Change for the Better" Page for Illustrations of Attainable Savings

Depending upon projected average usage rates, purity required and demand patterns, nitrogen users will typically be served using conventional cryogenic nitrogen generators.  In some cases, a LIN-assist plant will be recommended.  Oxygen users will usually be offered a supply based on a cryogenic oxygen generator.  Cryogenic oxygen production purity and pressure will be defined around user needs. For sites using both nitrogen and oxygen (and possibly, argon) a full Air Separation Unit (ASU), often with co-production of liquid products for backup  will normally be a very economical configuration.

Whatever type of plant is chosen, the proposed on-site nitrogen and / or oxygen supply system will be a cost effective solution to the agreed requirements; and system performance will be guaranteed. 

In many cases the plant will be selected to allow for cost effective increases in production rate to accommodate anticipated growth in demand.  

UCG is unique in its approach to the supply of backup liquid and the associated storage and vaporization systems:

• UCG does not make purchase of bulk backup liquid from UCG a requirement for supplying onsite gas to the host plant. 

• UCG typically includes the cost of the required liquid storage and vaporization system in the cost of the plant instead of billing for tank rental as a separate, and separately escalated, cost item. 

• Customers are free to shop for liquid from others if they wish - and there are no hidden barriers to changing backup liquid suppliers. 

• UCG-supplied tanks will be available for use throughout the term of the onsite supply - and any liquid supplier can fill them.  There will be no tank change-out fees or additional rental fees associated with supplier changes. 

• When primary customer needs and local bulk liquid market needs permit UCG to install a "piggyback" gas and bulk liquid production plant, the onsite gas customer benefits from having very large quantities of merchant liquid stored on site, which is instantly available for backup, with no transportation costs or delays.  

Customers can be sure of highly competitive prices for their backup bulk liquid needs throughout the term of their UCG onsite supply contract.

UCG equips its plants with computer control systems that provide highly automated and sophisticated control of the plant.  Alarms are indicated locally, and immediately transmitted to local operations personnel and to UCG home office operations support personnel.  Shutdowns are automatic when out-of-range conditions exceed pre-set limits. (At which time backup systems will activate automatically to ensure uninterrupted delivery of on-spec product.)

UCG plant operators verify proper operation, optimize plant settings to reflect changes in demand patterns, weather, and other factors, and perform routine maintenance.  Plant operation is also monitored remotely by Home Office and Regional personnel.  Periodic maintenance is scheduled and confirmed on a regular basis. 

The bottom line for you, the customer, is that UCG will guarantee plant availability, do everything required to ensure that guarantees are met, and provide protection against extra costs should UCG fail to meet its product availability guarantees.

If there is sufficient local demand for merchant liquid products in the area (liquid oxygen and/ or liquid nitrogen)  UIG / UCG may suggest installing a "piggyback" gas and liquid production plant as an option. 

Adding liquid production at an onsite gas production site requires additional equipment (and additional liquid storage).  These additions permit higher production rates and support distribution of large quantities of liquid products. These costs are NOT passed on to the on-site gas customer.

When UCG is able to justify installation of a plant that will serve multiple customers, UCG is able to offer lower cost product to the original on-site gas customer (the host plant). 

The host plant also benefits from enhanced supply reliability due to the large amount of liquid product which will be stored on the site. 

If you currently purchase onsite-produced gas or liquid products, and wish to investigate producer/ supplier alternatives, you should begin to seriously examine potential options well in advance of the end of your current supply period. 

For most users, this means starting at least two, and preferably three years prior to the end of their current contractual supply period. 

Waiting too long to begin this process may effectively deprive the user of the ability to obtain competitive offerings from UCG or any other potential supplier.  Most liquid and gas supply contracts contain notification period clauses which must be adhered to if automatic extension periods are to be avoided.  However, that is only one of several potential impediments to changing supplier. 

Unless a user starts investigating alternatives at least 2 years in advance of the end of the current supplier's supply period, there may not be time to finalize an alternative supply contract and install necessary equipment prior to termination of the current product supply arrangements.

Please visit our page of tips on Changing Your Industrial Gas Supplier for additional information on managing the process.

We will be pleased to review your requirements and preferences; and work with you to define the best solution for your specific situation. We will provide you with the best pricing and contract terms, including performance guarantees; and an ongoing relationship that fully meets your needs and expectations. 

Call us, fax us, or click on the link below to tell us about your requirements.