STUDY REPORTS U.S. HYDROGEN SALES INCREASED
OVER THE PAST FIVE YEARS AT A RATE OF 25 PERCENT
ANNUALLY
SRI Consulting Study Reveals That Several Large Hydrogen Plants
Have Been Built to Keep Up With Increased Demand
MENLO PARK, Calif. March 30,1998 --- According to a recent
SRI Consulting study, hydrogen sales in the United States have
increased at an average annual rate in excess of 25 percent during
1993 -1997.
This high rate of growth primarily reflects the addition of seven
large on-site plants capable of generating 485 million standard
cubic feet per day of hydrogen to serve refineries. Hydrogen
demand at refineries is an international trend; Western Europe is
experiencing growth due to environmental regulations, Latin
America is seeing increases in heavy crude upgrading capacity and
overall demand for refinery products have pushed sales in Asia.
In the past, refineries met their hydrogen requirements with
recovered hydrogen or built, owned and operated their own
hydrogen plants. Recognizing an opportunity to expand their
business, industrial gas companies convinced many refineries to
treat hydrogen as a utility
purchased from an industrial gas company. Refineries, often
strappe for cash to implement other capital improvements, were
receptive to purchasing hydrogen through single- and multi-user
pipelines owned and operated by an industrial gas company.
Efforts to penetrate the refining business have led to several
partnerships between industrial
gas companies and engineering companies. Air Products and
Chemicals, Inc. was one of the first to do this when the company
formed an alliance with KTI Group. Since then, BOC Gases
has formed a partnership with Foster Wheeler, Air Liquide has
established alliances with Haldor Topsoe A/S and Howe-Baker
Engineers, and Messer has linked up with Lurgi.
Although more than 90 percent of the hydrogen purchased in the
United States is produced and delivered in gaseous form to large
volume consumers, liquid hydrogen sales are an
importantcontributor to industrial gas company revenues. Since
Praxair brought two new liquid
hydrogen plants on stream in 1995 and 1997, Praxair and Air
Products nearly split 90 percent of North America's installed
liquid hydrogen capacity. About 20 percent of this capacity is
installed in Canada, built in the 1980s to take advantage of
relatively low power rates, but most of the production is destined
for U.S. markets. Gaseous hydrogen is not traded in significant
quantities because of the high cost of transportation. The point at
which on-site or captive hydrogen becomes more economic than
liquid or trucked gaseous hydrogen may change dramatically over
the next five years as small scale
hydrogen generation technologies are improved as a by-product of
efforts to commercialize hydrogen-fueled fuel cells. Electrolysers,
which use electricity to break water down into hydrogen and
oxygen, are also becoming more competitive. Industrial gas
companies are
watching these developments closely as the developers of these
new technologies decide how to enter the market; independently or
through companies already in the business.
Over the 1996-2001 period, the rate of growth in merchant
hydrogen demand is expected to slow to about 10 percent per year,
reflecting the higher installed demand base. In addition to refining,
the metals industry is one of the fastest growing markets as
companies switch to 100 percent hydrogen atmospheres for steel
annealing.
SRI CONSULTING Subsidiary of SRI International, 333
Ravenswood Avenue, Menlo Park, California 94025 (650)
859-2000 |
