Energy & Chemicals Segment
E&C facilitates major natural gas, petrochemical processing, and industrial
gas companies in the production of their products. E&C supplies mission
critical engineered equipment and systems used in the separation, liquefaction,
and purification of hydrocarbon and industrial gases that span gas-to-liquid
applications including natural gas processing, petrochemical, LNG, and industrial
gas applications. Our principal products include brazed aluminum heat exchangers,
Core-in-Kettle® heat exchangers, air cooled heat exchangers, cold boxes,
and process systems.
Natural Gas Processing (including Petrochemical) Applications
Our brazed aluminum heat exchangers allow producers to obtain purified hydrocarbon
by-products, such as methane, ethane, propane, and ethylene, which are commercially
marketable for various industrial or residential uses. Our cold boxes are highly
engineered systems that incorporate brazed aluminum heat exchangers, pressure
vessels, and interconnecting piping used to significantly reduce the temperature
of gas mixtures to liquefy component gases so that they can be separated and
purified for further use in multiple energy, industrial, scientific, and commercial
applications. Our air cooled heat exchangers are used to cool or condense fluids
to allow for further processing and for cooling gas compression equipment. Customers
for our natural gas processing applications include large companies in the hydrocarbon
processing industry, as well as engineering, procurement and construction (“EPC”)
contractors.
Demand for these applications is primarily driven by the growth in the natural
gas liquids (or NGLs) separation and other natural gas segments of the hydrocarbon
processing industries, including LNG. In the future, management believes that
continuing efforts by petroleum producing countries to better utilize stranded
natural gas and previously flared gases present a promising source of demand.
We have a number of competitors for our heat exchangers and cold boxes, including
certain leading companies in the industrial gas and hydrocarbon processing industries
and many smaller fabrication-only facilities around the world. Competition with
respect to our more specialized brazed aluminum heat exchangers includes a small
number of global (European and Asian) manufacturers.
LNG Applications
We are a leading supplier to EPC firms where we provide equipment or design
the process and provide equipment, providing an integrated and optimized approach
to the project. These “Concept-to-Reality” process systems incorporate
many of Chart’s core products, including brazed aluminum heat exchangers,
Core-in-Kettle® heat exchangers, cold boxes, pressure vessels, pipe work,
and air cooled heat exchangers. These systems are used for global LNG projects,
including projects in North America and China, for local LNG production and
LNG export terminals. Our proprietary IPSMR® (Integrated Pre-cooled Single
Mixed Refrigerant) liquefaction process technology offers lower capital expenditure
rates than competing processes per ton of LNG produced and very competitive
operating costs.
Demand for LNG applications is primarily driven by increased use and global
trade in natural gas (transported as LNG) since natural gas offers significant
cost and environmental advantages over other fossil fuels. Demand for LNG applications
is also driven by diesel displacement and continuing efforts by petroleum producing
countries to better utilize stranded natural gas and previously flared gases.
We have a number of competitors for these applications, including leading industrial
gas companies, other brazed aluminum heat exchanger manufacturers, and other
equipment fabricators to whom we also act as a supplier of equipment, including
heat exchangers and cold boxes.
Industrial Gas Applications
For industrial gas applications, our brazed aluminum heat exchangers and cold
boxes are used to produce high purity atmospheric gases, such as oxygen, nitrogen,
and argon, which have diverse industrial applications. Cold boxes are used to
separate air into its major atmospheric components, including oxygen, nitrogen,
and argon, where the gases are used in a diverse range of applications such
as metal production and heat treating, enhanced oil and gas production, coal
gasification, chemical and oil refining, electronics, medical, the quick-freezing
of food, wastewater treatment, and industrial welding. Our brazed aluminum heat
exchangers and cold boxes are also used in the purification of helium and hydrogen.
Demand for industrial gas applications is driven by growth in manufacturing
and industrial gas use. Other key global drivers involve developing Gas to Liquids,
or GTL, clean coal processes including Coal to Liquids, or CTL, and Integrated
Gasification Combined Cycle, or IGCC, power projects. In addition, demand for
our products in developed countries is expected to continue as customers upgrade
their facilities for greater efficiency and regulatory compliance. We have a
number of competitors for these applications, including leading industrial gas
companies and EPC firms, to whom we also act as a supplier of equipment, including
heat exchangers and cold boxes.
After Market Services
To support the products and solutions we sell, our Lifecycle group offers services
through the entire lifecycle of our products, which is unique and unparalleled
in the markets we serve. Our focus is to build relationships with plant stakeholders,
from process and mechanical engineers to operations and maintenance personnel,
focusing on the optimized performance and lifespan of Chart proprietary equipment.
Lifecycle services include extended warranties, plant start-up, parts, 24/7
support, monitoring and process optimization, as well as repair, maintenance,
and upgrades. We perform plant services on equipment, including brazed aluminum
heat exchangers, air cooled heat exchangers, cold boxes, etc.
Distribution & Storage Segment
D&S designs, manufactures, and services cryogenic solutions for the storage
and delivery of cryogenic liquids used in industrial gas and LNG applications.
Using sophisticated vacuum insulation technology, our cryogenic storage systems
are able to store and transport liquefied industrial gases and hydrocarbon gases
at temperatures from 0° Fahrenheit to temperatures nearing absolute zero.
Industrial Gas Applications
Industrial gas applications include any end-use of the major elements of air
(nitrogen, oxygen, and argon), including manufacturing, welding, electronics,
medical, nitrogen dosing, food processing, and beverage carbonation. Carbon
dioxide, nitrous oxide, hydrogen, and helium applications also utilize our equipment.
Our products span the entire spectrum of industrial gas demand from small customers
requiring cryogenic packaged gases to large users requiring custom engineered
cryogenic storage systems in both mobile and stationary applications. We also
offer cryogenic components, including vacuum insulated pipe (“VIP”),
engineered bulk gas installations, specialty liquid nitrogen, or LN2, end-use
equipment, and cryogenic flow meters. Principal customers for industrial applications
are global industrial gas producers and distributors.
Demand for industrial gas applications is driven primarily by the significant
installed base of users of cryogenic liquids, as well as new applications and
distribution technologies for cryogenic liquids. Our competitors tend to be
regionally focused while we are able to supply a broad range of systems on a
worldwide basis. We also compete with several suppliers owned by the global
industrial gas producers. From a technology perspective, we tend to compete
with compressed gas alternatives or on-site generated gas supply.
LNG Applications
LNG may be utilized as an alternative to other fossil fuels such as diesel,
propane, or fuel oil in transportation or off pipeline applications. Examples
include heavy duty truck and transit bus transportation, locomotive propulsion,
marine, and power generation in remote areas that often occurs in oil and gas
drilling. We refer to our LNG distribution products as a “Virtual Pipeline,”
as the traditional natural gas pipeline is replaced with cryogenic distribution
to deliver the gas to the end-user. We supply cryogenic trailers, ISO containers,
railcars, bulk storage tanks, fuel stations, loading facilities, and regasification
equipment specially configured for delivering LNG into Virtual Pipeline applications.
LNG may also be used as a fuel for a variety of on and off-road vehicles and
applications. Our LNG vehicle fueling applications primarily consist of LNG
and liquefied/compressed natural gas refueling systems for heavy-duty truck
and bus fleets. We sell LNG applications around the world from various D&S
facilities to numerous end-users, energy companies, and gas distributors. Additionally,
we supply large vacuum insulated storage tanks as equipment for purchasers of
standard liquefaction plants sold by our E&C business.
Demand for LNG applications is driven by the spread in price between oil and
gas, diesel displacement initiatives, environmental and energy security initiatives,
and the associated cost of equipment. Our competitors tend to be regionally
focused or product-specific, while we are able to supply a broad range of solutions
required by LNG applications. We compete with compressed natural gas (or CNG)
or field gas in several of these applications and LNG is most highly valued
where its energy density and purity are beneficial to the end-user.
BioMedical Segment
BioMedical consists of various product lines built around our core competencies
in cryogenics, vacuum insulation, low temperature storage, and pressure swing
adsorption gas generation, with a focus on the respiratory and biological users
of the liquids and gases instead of the large producers and distributors of
cryogenic liquids. Applications in the BioMedical segment include the following:
Respiratory Therapy
Our respiratory oxygen product line is comprised of a range of medical respiratory
products, including liquid oxygen systems and stationary, transportable, and
portable oxygen concentrators, all of which are used primarily for in-home supplemental
oxygen treatment of patients with chronic obstructive pulmonary diseases, such
as bronchitis, emphysema, and asthma.
We believe that competition for our respiratory products is based primarily
upon product quality, performance, reliability, ease-of-use and price, which
we focus our marketing strategies on these considerations. Furthermore, competition
also includes the impact of other modalities in the broader respiratory industry.
Life Sciences
Our life science products include vacuum insulated containment vessels for the
storage of biological materials. The primary applications for this product line
include medical laboratories, biotech/pharmaceutical research facilities, blood
and tissue banks, veterinary laboratories, large-scale repositories, and artificial
insemination, particularly in the beef and dairy industry.
The significant competitors for life science products include a number of companies
worldwide. These products are sold through multiple channels of distribution
specifically applicable to each industry sector. The distribution channels range
from highly specialized cryogenic storage systems providers to general supply
and catalogue distribution operations and breeding service providers. Competition
in this field is focused on design, reliability, and price. Alternatives to
vacuum insulated containment vessels include electrically powered mechanical
refrigeration.
