Mid Atlantic market report

The Mid-Atlantic region of the US coversthe overlap between the Northeastern and Southeastern states. It takes in sevenstates: Delaware, Maryland, New Jersey, New York, Pennsylvania, Virginia andWest Virginia, plus the nation’s capital, Washington, DC.

It is densely populated. The NortheastCorridor and Interstate 95 link an almost contiguous sprawl of suburbs andlarge and small cities, forming the Mid-Atlantic portion of the Northeastmegalopolis, which one of the world’s most important concentrations of economicactivity. Not surprisingly, the area is relatively affluent as a result, having43 of the 100 highest-income counties in the nation, based on median householdincome, and 33 of the top 100, based on per capita income. Most of the MidAtlantic states rank among the 15 highest-income states in the nation, bymedian household income and per capita income.

The top five cities by population in theMid Atlantic are New York City, Philadelphia, Washington, DC, Baltimore, andVirginia Beach.

The gases market

The industrial gas market in the MidAtlantic region generated revenues of approximately $3,037.3m in 2023. This isup from $2,266.0m in 2013, indicating a compound annual growth rate of 2.97%per annum for the decade.

The largest gas company was Linde plc, withestimated revenues of $939.7m – equating to a market share of 30.9%. The nextlargest companies were Air Liquide and Messer with estimated revenues of$771.6m and $353.3m, equating to market shares of 25.4% and 11.6% respectively.

The largest revenue generating supply modein the region was gas delivered by cylinder, accounting for an estimated$1,688.9m – this equated to 55.6% of the total gas market. Bulk sales were thesecond largest revenue generator, with approximately $1,062.1m (35.0%)attributable to this mode of supply, then we see on-site pipeline salesaccounting for around $225.7m (7.4%).

The sale of nitrogen accounted for thelargest portion of gas market revenues – approximately $1,117.9m, which equatedto 36.8% of the total market. Sales of oxygen accounted for the second largestamount of revenues, and they were estimated to be around $563.8m (18.6%). Argonand carbon dioxide sales came to around $339.7m (11.2%) and $333.5m (11.0%)respectively, then comes hydrogen ($149.1m), helium ($147.8m), and medicaloxygen ($128.1m). The remaining $257.3m of the market was attributable to salesof acetylene and specialty gases.

Sales to the general manufacturing sectoraccounted for the largest portion of gas market revenues – approximately$604.9m, which equated to 19.9% of the total market. Sales to metallurgyclients accounted for the second largest amount of revenues, estimated to bearound $603.9m (19.9%). Revenues coming from food and healthcare customers cameto around $434.7m (14.3%) and $379.0m (12.5%) respectively, then comeschemicals ($230.3m), glass ($117.3m), electronics ($105.3m), and refining &energy ($84.0m). The remaining $444.8m of the market was mostly attributable toa host of other end-uses of industrial gas, such as fire extinguishermanufacture, science/research applications, and wastewater treatment.

Within the 2023 to 2028 timeframe, ourforecast models predict market revenue growth between 3.7% pa and 3.7% pa.Accordingly, the gas market in the region is expected to achieve revenuesbetween $3,636.2m and $3,649.1m by the year 2028.

The region’s hydrogen bids

There are too many recent projects in theregion to list them all, but let’s at least start by noting how hydrogen publicpolicy is playing out in the Mid Atlantic region.

In April of last year, details firmedup around a Regional Clean Hydrogen Hubs program – called H2Hubs. The programearmarks up to $7bn to establish a handful of regional clean hydrogen hubsacross the US. As part of a larger $8bn hydrogen hub program funded through theBipartisan Infrastructure Law, the H2Hubs are envisaged as a central driver forclean energy and improved energy security.

Clean hydrogen hubs describe the creationof networks of hydrogen producers, consumers, and local connectiveinfrastructure to accelerate the use of hydrogen as a clean energycarrier.

For the Mid Atlantic, three bids cover muchof the region (and beyond it). The Northeast Hydrogen Hub covers sevenNortheast states – Connecticut, New York, New Jersey, Maine, Rhode Island,Vermont and the Commonwealth of Massachusetts are those involved. Next to this,Team Pennsylvania Foundation has also applied and been accepted. The applicant,Team PA for short, has set up the Decarbonization Network of Appalachia (DNA)H2Hub, covering Pennsylvania, Ohio, and West Virginia, with Pennsylvania takingthe lead. Finally, the Appalachian Regional Clean Hydrogen Hub (ARCH2) has beenaccepted in its bid covering the Northern Appalachian region, including WestVirginia, Ohio, Pennsylvania, and Kentucky.

A nuclear option in hydrogen

Another piece of recent notable, andrelated, activity came through in March 2023, when Constellation Energy Companyconfirmed it has started up a 1MW demonstration-scale, nuclear-powered cleanhydrogen production facility at its Nine Mile Point plant in Oswego, New York.

The plant can produce 560kg of cleanhydrogen per day, which is more than enough to meet its operational hydrogenuse.

Clean ammonia in West Virginia

Yet another hydrogen-angled investmentlanded in April last year, when plans were unveiled for a majormulti-billion-dollar clean ammonia facility in Mingo County, West Virginia. asan anchor project in the Appalachian Regional Clean Hydrogen Hub’s (ARCH2)application to the Department of Energy.

The Adams Fork Energy clean ammoniaproject, which will be jointly developed by Adams Fork Energy and the FlandreauSantee Sioux Tribe, is expected to have initial annual ammonia productioncapacity of 2.1 million metric tons.

Located next to a reclaimed coal miningsite, it is hoped the plant will displace more than 2.7 metric tons of carbondioxide each year. To do this, Adams Fork Energy has signed a strategicpartnership with CNX to provide fuel and carbon sequestration services.

Ammonia is one of the most efficienthydrogen carriers and it also results in zero carbon emissions when combusted.It is primarily used in agriculture as a fertilizer, but other applicationsinclude heating and power generation, refrigerant, water purification, and inmanufacturing plastics, textiles, and pesticides.

Source:   gasworld BusinessIntelligence