News

Costs of nitrogen gas – how much should you be paying?

Chris Styles

August 21, 2017

We’re amazed at the wide range of costs we see companies paying for delivered nitrogen. Industrial businesses in Ontario (and most of Canada) have the displeasure of paying some of the highest electricity prices in North America; therefore to remain competitive on a global scale, it’s critically important for our manufacturers and the industrial economy as a whole to find & vet opportunities to offset this imposed disadvantage. Generating your own supply of nitrogen gas is a straightforward, low risk, and high impact opportunity to reduce overhead costs and achieve a quick payback of investment dollars.

We’ve been actively analyzing our customer’s delivered nitrogen bills, and we wanted to highlight a sample of them (all in CAD $):

$0.1773 per cubic meter / using 260,000 cubic meters per month
$0.18 per m3 / using 80,000 m3 per month
$0.2019 per m3 / using 40,000 m3 per month
$0.62 per m3 / using 10,000 m3 per month
$0.92 per m3 / using 2,000 m3 per month
$1.06 per m3 / using 1,500 m3 per month
$1.894 per m3 / using 1,200 m3 per month (yes, almost $2 per m3…)

Have you looked at your nitrogen bills recently? How do your costs compare to the companies shown here? Not included in these figures are the monthly tank rental charges, telemetry costs, delivery fees, fuel surcharges and environmental fees. These additional costs often total over $500 per month, on top of the per-cubic-meter rate for the nitrogen gas consumed. Buying nitrogen gas from a 3rd party supplier is a needlessly expensive endeavor; we want to make it known that there’s a better ‘mouse trap’ when it comes to your nitrogen gas supply.

Once you own or lease a nitrogen gas generation system from Purity Gas, you’re generating your own high-grade nitrogen gas in endless quantity right at your facility. Once the equipment is installed, the cost of producing your own nitrogen gas is comprised of two factors: the cost of electricity to operate the air compressor which supplies air to the nitrogen generator, and the cost of maintaining the air compressor & nitrogen generation equipment.

Our market-leading nitrogen generation technology reliably, safely and efficiently produces high-purity nitrogen gas for $0.03 to $0.07 per M3 ‘all in’, while also reducing your carbon footprint by eliminating transport truck gas deliveries to your facility. Even compared to the best pricing of delivered gas, self-generated nitrogen is still vastly more cost effective than buying from a 3rd party.

Gas companies will often highlight the high rates of electricity in Ontario, and wrongly suggest that nitrogen generation is too expensive of a process to consider due to electricity rates. The fact is that even with our high electricity costs in Ontario, generating your own nitrogen gas is still SIGNIFICANTLY less expensive than buying it from a 3rd party bulk supplier. Whether you’re making it yourself or buying it from the gas company, electricity still has to be used in the process of generating the nitrogen; and in the gas company’s case, a huge amount of additional electricity & diesel fuel is then required to super-cool and condense the nitrogen gas, package it on a truck and ship it to the customer’s site. This huge overhead cost (and carbon footprint) is then passed on to the customer via the contract price per m3, delivery & fuel fees, etc…

Our purpose

Purity Gas has one purpose: to put the numbers in front of nitrogen gas users. We believe in cost transparency and informed decisions, and prefer to let the facts and financials do the selling. “Mathematics is the supreme judge; from its decisions there is no appeal” – Tobias Dantzig

Let us prove to you that nitrogen gas generation can be an opportunity for your company to significantly reduce costs, while capturing fast payback of your dollars invested. Connect with us at https://puritygas.ca/contact/