Steel Mills

Cryogenic Cylinders a Billion Dollar Market

November 19, 2013

Worthington Industries is poised to take advantage of the natural gas boom through production of pressure cylinders and gas processing units. About a third of Worthington’s profits are derived from their pressure cylinder segment. Worthington has five Ohio facilities and, with proximity to the Marcellus and Utica shale plays, has begun the manufacture of cryogenic (stainless) tanks used for the storage and transportation of liquefied natural gas (LNG).

In September 2012, Worthington acquired Westerman Companies, a supplier of oil and gas separators, production units and related wellhead equipment and the only North American manufacturer of enriched uranium hexafluoride (UF6) storage and transportation cylinders for the nuclear industry. Westerman has production facilities in Bremen and Wooster, Ohio.

The Bremen facility, which manufactures large tanks, is working towards the production of cryogenic tanks for the storage and transpiration of liquefied natural gas (LNG). The Wooster facility, responding to demand from the oil and gas industry, plans to triple its production of gas processing units (GPU) in the next three to five years. Worthington’s Westerville facility, known for its gas grill cylinder product, recently shipped its first order of cryogenic tanks.

“Cryogenics is a natural extension of our legacy high pressure cylinder capabilities and our more recent entry into the CNG (compressed natural gas) alternative fuel storage tank business,” said Worthington CEO John McConnell in the FY2013 annual report. “We will continue to explore investment opportunities to capitalize on the shale gas boom, which we believe has a long way to run.”

A recent report by Key Banc forecast alternative fuel cylinders, currently around $80 million in sales per year, to reach double digit growth in the next three to five years due to an increase in natural gas vehicles. As a result cryogenic LNG cylinders are expected to be a $1 billion market.

Worthington Industries started in 1955 and continues to be led by founder and CEO John P. McConnell. Its three primary business segments are steel processing (58 percent), pressure cylinders (33 percent) and engineered cabs (9 percent). The company has over 10,000 employees in 82 facilities in 11 countries.