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Air Liquide America
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Modes of Supply
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Typical Air Separation Unit
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Cryogenic Argon Purification

• Argon is typically co-produced with large O2
  requirements
• Particularly Steel Chemical plants
• Argon represents 1 of air
• And requires refining to achieve purity levels
  gt99.9

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Air Liquide America Argon Plants

• The most comprehensive productions capability in
  North America

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Distribution

• Argon can be delivered by truck and rail
• 20 to 25 Ton cryogenic trailers
• 60 to 100 Ton cryogenic rail cars
• Air Liquide has the best capability to deliver
  the greatest amount of LAR anywhere in North
  America

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Supply Demand

• ALA is the 2nd largest in the US
• Includes MG acquisition
• After divestments
• Excluding Canadian capacity
• Argon demand has grown faster than Industrial
  Production
• 5/yr in the 80s
• Over 4/yr in the 90s
• Demand is forecasted to increase over 3/yr
  through 2006

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Argon Markets

• Argon is forecasted to grow 3/year through 2006
• Metals Heat treat and welding driven by quality
• New applications
• Opto-electronics (optical fiber, LED)
• Food Wine Inerting
• Battery and Solar Panel manufacture

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Availability

• Typically argon effective capacity is 90 of
  nameplate
• Due to higher downtime
• Longer time to purity after start-ups
• Production variation due to O2 demand
• When O2 demand is down, argon production is lost
• Long supply chains
• Capacity on the Gulf and Northeast is railed long
  distances
• Effective capacity utilization (demand/effective
  capacity) is estimated to be in the high 80s
• By 2006, utilization will be in the high 90s
• In summary, availability will be tight
• However, Air Liquide has the ability to bring on
  additional capacity
• This will be a function of argon price