The Russian industrial gas market in 2024 demonstrates a mix of stability and growth, driven by demand across key sectors such as manufacturing, oil and gas, food processing, and healthcare. Despite challenges from geopolitical factors and international sanctions, the market has shown resilience, with a steady increase in the adoption of advanced technologies like cryogenic air separation, gas recovery systems, and digital automation. While the market faces logistical hurdles and external uncertainties, it continues to expand, supported by both domestic production and regional trade.
1. Industry Chain Analysis
• Raw Materials:
• The market for liquid air separation technology remained strong, with 10-12 new air separation units (ASUs) commissioned in Russia in 2024, adding about 1.5 million tons/year to the total capacity.
• The production of hydrogen via steam methane reforming (SMR) saw an increase of 7%, reaching about 500,000 tons of hydrogen produced in Russia in 2024.
• Production:
• Major companies like Gazprom (Russia),Air Liquide, and Linde dominate the production of bulk gases. Linde expanded its Russian operations with a 5% increase in production capacity, reaching 2.5 million tons in total industrial gas output in Russia.
• The share of local producers rose by 3-4%, now accounting for around 30% of the total industrial gases market in Russia.
• Distribution:
• The market for bulk gas distribution remained relatively stable, with approximately 1,000+ distribution points across the country. However, challenges in distribution arose due to rising logistics costs, especially in remote areas.
• Cylinder gas deliveries grew by 6%, especially in the food and medical sectors, reaching around 400,000 tons of packaged gases in 2024.
• End Users:
• Large industrial consumers such as steel, oil and gas, and chemical industries remain the largest contributors, accounting for 65% of total gas consumption. Meanwhile, small, and medium-sized enterprises (SMEs) in the food processing and pharmaceuticals sectors showed a 5-7% increase in demand.
2. Customs Import and Export Situation
• Imports:
• In 2024, the value of imported industrial gases into Russia declined by 8-10% compared to 2023. This was largely due to the impact of international sanctions, increased transportation costs, and trade restrictions.
• The import volume of specialty gases, such as helium and neon, fell by approximately 12% due to disruptions in supply chains from key exporters (especially from the U.S. and Europe).
• Russia imported about 1.2 million tons of industrial gases in 2024, a slight decrease from 1.3 million tons in 2023.
• Exports:
• Russia’s export value of industrial gases increased by 5-7% year-on-year, totaling USD 1.9 billion in 2024, up from USD 1.8 billion in 2023.
• Major export destinations included CIS countries (40%), China (25%), and Central Asia (15%), with export growth driven by nitrogen (N2) and carbon dioxide (CO2), especially in the energy and food sectors.
• Export volumes rose to approximately 1.8 million tons of industrial gases, an increase from 1.7 million tons in 2023.
3. Market Demand
• Manufacturing and Metallurgy:
• The steel industry accounted for 42% of total industrial gas consumption in Russia. The demand for oxygen (O2) rose by 3.5%, reaching approximately 2.2 million tons in 2024.
• Nitrogen (N2) demand grew by 4.3%, reaching 1.8 million tons, driven by increased production in metallurgy and chemical industries.
• Oil and Gas:
• Industrial gas consumption in the oil and gas sector grew by 6%, reaching 1.5 million tons of gases like CO2, nitrogen, and helium for enhanced oil recovery (EOR) and pipeline services.
• Food and Beverage:
• The demand for carbon dioxide (CO2) in food preservation and packaging grew by 8%, reaching 400,000 tons in 2024.
• Nitrogen (N2) usage for cold storage and packaging increased by 5%, amounting to 350,000 tons.
• Healthcare and Pharmaceuticals:
• The demand for medical oxygen saw a 6% increase, reaching 300,000 tons in 2024, driven by higher healthcare requirements, particularly due to the COVID-19 aftermath and growing hospital infrastructure.
• Other medical gases like nitrous oxide grew by 4%, reaching 10,000 tons.
4. Technology Development
• Cryogenic and Non-Cryogenic Technologies:
• In 2024, cryogenic air separation unit (ASU) capacity increased by 3.2%, with approximately 12 new ASU plants coming online, expanding total capacity to around 8 million tons/year.
• The non-cryogenic PSA (Pressure Swing Adsorption) market also expanded by 5%, reaching an estimated market share of 25% in the production of smaller quantities of nitrogen and oxygen.
• Gas Recovery and Reuse:
• The adoption of gas recoverysystems grew by 15%, especially in the petrochemical and food sectors. About 120 systems were installed in 2024, saving an estimated 150,000 tons of CO2 emissions.
• Digitalization and Automation:
• Industrial gas plants in Russia increased their adoption of IoT-based predictive maintenance and AI-driven control systems by 18%, with approximately 30-35% of larger plants integrating these technologies for efficiency.
5. Market Size and Forecast
• Market Size in 2024:
• The Russian industrial gases market was valued at USD 4.8 billion in 2024, representing a growth of approximately 3% compared to USD 4.65 billion in 2023.
• Total gas consumption in Russia reached about 9 million tons in 2024, a 2.5% increase compared to 8.8 million tons in 2023.
• Growth Rate:
• The market is projected to grow at a CAGR of 3.5% from 2024 to 2029, driven by increasing industrial activities, the adoption of new technologies, and expansion in end-use sectors.
• Forecast Drivers:
• Key drivers of future growth will include:
• Hydrogen production for clean energy applications, expected to grow by 10-12% annually.
• Specialty gases demand in electronics, pharmaceuticals, and aerospace.
• Sustainability initiatives, such as CO2 capture, will see a significant push, with CO2 capture technology usage projected to grow by 8-10% per year.
• Challenges:
• Geopolitical risks and logistical challenges remain key concerns. The fluctuating exchange rates and sanctions are expected to impact imports and costs.
Conclusion
The Russian industrial gases market has shown moderate growth in 2024, with an overall increase of 3% in market value and steady demand across key sectors. The rise in oil and gas activities, steel production, and food processing has been key in driving this growth. However, the market remains cautious, with a focus on improving domestic production and technological advancements to navigate external pressures. The outlook for the coming years remains positive, with 3.5% growth projected through 2029, spurred by demand for cleaner technologies and specialized gases.
Maslov Alexey
（Comgas,LLC.）
