Booming Steel Industry Prompts Growth of Air Liquide Air Separation Units in Europe, Middle East

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Researched by Industrial Info Resources Europe (Galway, Ireland)--Air Liquide S.A. (EPA:AI) (Paris, France) has estimated that the market for industrial gases worldwide is expected to grow an average of 7% to 8% per year from 2011 to 2015. Much of this growth is expected to come from the steel industry, prompting a focus on securing long-term service agreements for outsourced gas with some of the largest steel companies worldwide. On the strength of the contracts already signed, Air Liquide is investing heavily in new air-separation units (ASU) throughout Europe and the Middle East to serve this market.

Air Liquide has just signed a long-term contract with EMZ (Yenakiiyeve, Ukraine), a subsidiary of Metinvest Holding LLC (Donetsk, Ukraine), which is Ukraine's steel industry leader, to supply industrial gases to its iron and steel plant in Yenakiiyeve (Donetsk Oblast), in southeastern Ukraine. On the back of this contract, Air Liquide will invest in a new state-of-the-art ASU with a production capacity of 1,700 tonnes per day of oxygen, nitrogen and argon. The ASU will be designed, built and operated by Air Liquide and will supply liquid gases to other industries in the Ukraine; commissioning is planned for mid-2014.

Other developments in Europe include a new high-pressure and high-purity gaseous oxygen production unit in Italy, which was commissioned in 2010. It was installed in Castelnuovo del Garda, near Verona, where Air Liquide already operates another ASU. With a production capacity of around 800 tonnes per day, the new unit will bring the total production capacity on this site to 1,100 tonnes of oxygen per day. This new production capacity has enabled Air Liquide to meet the increasing demand of its customers who are connected to the 700-kilometer pipeline network that extends into Po Valley, between Genoa and Padua. This network notably supplies steelmaker Arvedi (Cremona, Italy) and many customers in northern Italy.

Following the successful startup in 2007 of the largest ASU in Russia at Severstal's (LSE:SVST) (Cherepovets, Russia) integrated steel mill in Cherepovets, the Air Liquide Group announced an expansion of its partnership with the Russian steel major through a new contract for outsourcing of industrial gases in Cherepovets. The production capacity of a new ASU, which is scheduled to start-up at the end of 2012, will reach 2,000 tonnes per day of gaseous oxygen. It also will produce nitrogen, argon and rare gases.

The Middle Eastern economies continue to grow, generating many different needs for industrial gases. In order to support its customers from the steel sector in this growth area, Air Liquide is investing in new production units, representing a total investment of almost €60 million ($86.3 million).

In Egypt, in the industrial zone of Sadat City, midway between Cairo and Alexandria, Air Liquide has signed a new long-term contract with steel manufacturer EZZ (LSE:AEZD) (Cairo, Egypt) to supply of gaseous oxygen. A production unit with a capacity of 110 tonnes per day of gaseous oxygen will be commissioned at the end of 2011 and will enable the customer to increase production of steel for long products.

In Qatar, through subsidiary GASAL, the Group has signed a new long-term contract with Qatar Steel (Mesaieed, Qatar). Within this framework, a new oxygen production unit will be added to the existing two, bringing the total production capacity on this site to 650 tonnes of oxygen per day. This unit will be commissioned in the first quarter of 2012.

Air Liquide also has begun activities in Syria, recently completing its first unit in the country. An oxygen production unit with a capacity of 200 tonnes per day, dedicated to steel producer Medsteel (Damascus, Syria), has just been commissioned in the new industrial city of Adraa, which is near Damascus. This unit also produces liquid nitrogen and argon, and will supply the industrial gases market throughout the Levant region.

This is the first of two articles discussing how the steel sectors's growth is prompting construction of Air Liquide's air-separation units around the world. The next article, scheduled for July 4 publication, will discuss the company's entry into Asian markets.

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