Industrial gas distributors, responsible for filling and supplying compressed gas cylinders for sale or rental, are crucial to diverse sectors. They deliver essential gases like nitrogen, oxygen, argon, carbon dioxide, hydrogen, helium, methane and propane to a variety of industries such as electronics, government, medical, welding, food and beverage, fire protection and aviation, as a small sample of industries.
Nevertheless, they are in business to turn a profit and must leverage the most economically efficient methods to maximize revenue and minimize operational costs. This is equally important when it is time to acquire new or refurbished gas cylinders or recertify or repair existing ones.
“By outsourcing to third party cylinder supplier, small to mid-sized independent gas distributors can save time and reduce costs, allowing them to focus on serving their customers,” said Ed Burcham, area manager of Ozarc Gas & Equipment.
Over the past 30 years, Burcham has acquired new and refurbished cylinders as well as sent cylinders out for recertification to established third parties. Burcham says that even the largest distributors outsource due to the complexities involved in specifying, refurbishing and testing cylinders.
Ozarc Gas & Equipment supplies industrial gases and welding equipment in Missouri, and along with other locations is part of a larger network of distributors owned by Meritus Gas Partners.
According to Burcham, when choosing a reputable supplier, it is important to look for these key traits: a supplier should be able to source worldwide, which lowers the distributor’s shipping costs. They should be able to provide cylinders that not only function properly but also adhere to precise specifications. Finally, whether dealing with cryogenic or non-cryogenic cylinders, a supplier should manage these processes themselves, reducing costs and time for the distributor.
Ultimately, a distributor should clearly discern the value and benefits of any chosen cylinder supplier before entering a partnership with them.
New Gas Cylinders
The business model for industrial gas distributors typically involves acquiring cylinders and renting them to customers. Consequently, they need a substantial inventory of cylinders in various sizes. As the business expands, these demands increase correspondingly.
Today, new cylinders are available from only a handful of US based manufacturers. However, US-based third parties can source cylinders from reputable overseas sources that conform to U.S. specifications (including those related to coatings, markings and legal requirements).
According to Burcham, Quest Cylinder effectively navigates this challenge by sourcing the primed shell offshore. The company specializes in new and refurbished compressed gas cylinders as well as performing cryogenic repairs, service and sales. The shell arrives with all the legal markings and a valve, if specified. Quest Cylinder then takes the shell and performs all necessary steps to prepare the cylinder for the distributor, including adding the valve if needed, which must meet stringent safety standards and be tailored to the specific gas type to prevent leaks, overpressure or cross-contamination between gases.
Refurbished Gas Cylinders
Distributors might also consider purchasing refurbished cylinders. While large distributors are gradually moving towards refurbished cylinders as a cost-saving measure, it is typically the small- to mid-sized distributors who recognize refurbished cylinders as a perfectly viable alternative to new ones. Of course, refurbished cylinders must meet the same specifications as new cylinders.
For small to mid-sized independent gas distributors the decision to acquire refurbished cylinders is driven by “Cost, cost and cost – the bottom line,” said Burcham, adding that there are also times new cylinders are in short supply.
Quest Cylinder’s refurbished cylinders, which can be cryogenic or non-cryogenic, are shot-blasted, hydrostatic tested, painted/embossed/stenciled, stamped per DOT specifications when required and then outfitted with new valves. They can bring a distributor’s entire fleet of cylinders up to code by refurbishing them or the distributor can purchase the cylinders “as is” and take the required steps themselves to meet compliance.
Recertifying Cylinders
Distributors can realize value in more areas than just cylinder acquisition. Generally, non-cryogenic cylinders must be recertified every 5 to 10 years, depending on the cylinder type, the material it is made of, and the regulatory standards it falls under. Some cylinders, particularly those used for high-pressure gases or under DOT regulation (like DOT-4L cylinders for liquid gases), must be recertified every 5 years. For certain cylinders, particularly low-pressure or specific stainless-steel models, recertification can extend to 10 years.
Regardless of how often recertification is required, Burcham says the investment in the equipment required for in-house testing is cost-prohibitive for most independent distributors.
“Outsourcing testing and recertification are beneficial because it reduces any potential liability,” said Burcham, adding a company like Quest Cylinder takes full responsibility for testing and recertification, as well as maintaining all the required documentation.
He also appreciated the speed of turnaround, “which is important to me, because if the cylinders sit at his location, they are not at the customer’s site generating rental income.”
Repairing Cryogenic Cylinders
To achieve cryogenic temperatures, many companies, such as those in the healthcare, aerospace and energy industries, require gas in cryogenic cylinders and often purchase cryogenic tanks and equipment for long-term use. This is common in high-volume operations that require continuous access to large amounts of gases. Smaller companies or those with intermittent needs for cryogenic gases (e.g., research institutions, small manufacturers) often only rent cylinders.
Regardless, like all cylinders, cryogenic cylinders are prone to wear and tear and must eventually be repaired, ensuring their safety and structural integrity. Repair procedures vary, but they are often long and involved. A technician typically performs a visual inspection of the outer tank and components, removes the float gauge assembly for inspection, breaks the vacuum or backfills with GN2, replaces the POV, checks for leaks using a Helium Mass Spectrometer, bakes the vessel at a range of 250-350 degrees F. to reactivate the molecular sieve, re-evaluates annular space to 10 microns or less, repairs/replaces any defective plumbing, performs a bench-set pressure build, economizes the regulators and pop-tests the relief valves.
Finally, they perform gas pressure and liquid tests to check for leaks, ensuring the tank, regulator and valves meet industrial gas and manufacturer’s standards. To save time and money, it is worth outsourcing this process to an outside supplier who can quickly and efficiently perform this work in their own facility and then ship the repaired cylinder back to the distributor.
Like any other business, a distributor must focus on reducing costs and improving time efficiency. Since gas cylinders must be replaced, refurbished, recertified and repaired, the most economical way to achieve this is to outsource this work to a credible third party, freeing the distributor to concentrate on their own business as well as their customers’ needs.