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Nitrogen is one of the most widely used industrial gases in manufacturing, processing, packaging, metal fabrication, and energy production. Historically, facilities have relied on bulk liquid nitrogen, dewars, or high-pressure cylinders supplied by third-party suppliers.

However, that model is quickly changing.
 
On-site nitrogen generation allows industrial facilities to produce nitrogen directly from compressed air, achieving the required purity and pressure without relying on recurring deliveries. For many operations, this shift provides measurable cost savings, improved safety, and greater operational control.
 
For plant managers, maintenance leaders, and financial decision-makers, the question is no longer “Can we generate nitrogen on site?
 
The real question now is: “Why are we still paying to have it delivered?
 

Nitrogen generation skid

What Is On-Site Nitrogen Generation?

On-site nitrogen generation systems separate nitrogen from compressed air using one of two primary technologies:

Pressure Swing Absorption (PSA) Nitrogen Generators

PSA systems utilize carbon molecular sieve media to selectively adsorb oxygen molecules while allowing nitrogen to pass through. This process produces high-purity nitrogen suitable for demanding industrial applications.

Typical capabilities:

  • Purity ranges up to 99.999% depending on system design

  • Flow ranges suitable for small to large industrial demands

  • Ideal for applications requiring tight purity control

The high-purity nitrogen produced by PSA systems is ideal for food processing, electronics manufacturing, heat treating, and other operations sensitive to oxygen.

Membrane Nitrogen Generators

Membrane systems use selective permeation through hollow fiber membranes. Oxygen and water vapor diffuse out of the membrane, while nitrogen remains in the product stream.

Typical capabilities:

  • Purity ranges generally up to 99.5%

  • Scalable for continuous industrial flow

  • Fewer moving parts and simple operation

Membrane nitrogen generators are commonly used in blanketing, tire inflation, fire prevention systems, and applications where ultra-high purity is not a requirement.

Why Facilities Are Replacing Bulk Nitrogen Supply with On-Site Generation

Many organizations are transitioning from recurring bulk nitrogen purchases to installing systems that allow for on-site nitrogen generation. Below, we will highlight four key benefits for facilities making this change.

1. Cost Control and Payback

Having nitrogen delivered to your business involves more than just the cost of the gas.

Facilities also pay for:

• Delivery charges • Tank or cylinder rental fees
• Fuel surcharges • Hazmat handling
• Long-term supply contracts • Evaporation and vent losses in cryogenic systems

 

On-site nitrogen generation turns a recurring operational expense into a manageable utility cost, primarily associated with compressed air and electricity.

When properly engineered and sized, many facilities find that on-site systems can provide a relatively quick payback period compared to bulk supply. The greater and more consistent the nitrogen demand, the stronger the economic rationale for this approach will be.
 
For procurement and finance teams, the shift to on-site nitrogen generation means:
  • Predictable operating costs
  • Reduced vendor dependency
  • Elimination of contract escalation risk
  • Improved long-term margin stability
 

2. Elimination of Delivery Logistics Risk

Using supplied bulk nitrogen introduces operational variables that plant teams cannot control, potentially leading to production disruptions. 

This includes:
• Delivery scheduling
• Weather disruptions
• Driver shortages
• Tank refill timing
• Supply chain volatility
 
On-site gas generation eliminates these variables and puts supply reliability back within the facility. Nitrogen is produced continuously from the industrial compressed air system already supporting plant operations.
 
Compressed air and gas systems can also be designed with:
• Redundancy
• Storage buffering
• Remote monitoring
• Integration into building management systems
 
For operations leaders, this translates to increased uptime stability and fewer external dependencies.
 

3. Improved Facility Safety and Reduced Handling Risk

High-pressure cylinders and cryogenic liquid systems present several important safety considerations. One key concern is the handling of heavy cylinders, which can pose physical risks to personnel. Additionally, frequent connections and disconnections of these systems can pose hazards if not managed carefully. Other potential risks include exposure to cryogenic liquids, venting losses from bulk tanks, and the inherent risks of high-pressure storage, which must be addressed to ensure safe operation.
 
On-site nitrogen systems can reduce or eliminate routine cylinder handling and cryogenic storage concerns.
 
Additionally, modern nitrogen systems come equipped with the following:
  • Oxygen analyzers for monitoring gas purity
  • Automated alarms
  • Continuous system diagnostics
These features enhance both process reliability and safety oversight.
 

4. Purity Control and Process Consistency

In many industrial applications, oxygen can be a problematic factor that causes decay, contamination and even combustion. While bulk nitrogen is a standard solution, on-site generation allows facilities to customize and maintain the precise purity levels required for their specific processes.
 
Nitrogen is used for:
  • Preventing oxidation and chemical breakdown
  • Reducing fire and explosion risks
  • Displacing moisture to prevent corrosion
  • Improve the integrity of welds and laser cuts
  • Extending product shelf life
 

Mechanical wear in these areas can lead to vibration issues, bearing damage, and reliability problems even after a rebuild.

Precision You Can Monitor

Unlike delivered bulk nitrogen supply, which can have variable purity, on-site systems use integrated sensors to monitor performance in real time. If purity levels shift, the system adjusts instantly to protect your line.

This level of control and precision leads to:

  • Better product quality and consistency
  • Reduced waste and less scrap
  • Operation confidence, knowing your gas always meets your exact specs 

Newly installed nitrogen generation compressed gas systems

Expand Capabilities with High-Pressure Nitrogen Skids

Some applications require nitrogen at elevated pressures beyond standard generator output.

Rasmussen Air & Gas Energy engineers high-pressure nitrogen skids designed to integrate with PSA nitrogen generation or membrane systems.

High-pressure nitrogen skid packages can include:

  • Boosters
  • Storage vessels
  • Filtration
  • Controls integration
  • Safety systems 

These high-pressure systems are commonly used in various industries, including oil and gas, pressure testing, laser cutting, and other specialized industrial processes. When designing these systems, it's essential to consider factors such as flow, pressure, duty cycle, and redundancy requirements. This is where engineering expertise plays a crucial role, and Rasmussen Air & Gas Energy can provide the necessary knowledge and support.

Is On-Site Nitrogen Generation the Right Choice for Your Facility?


On-site nitrogen generation is most beneficial when:

  • Nitrogen demand is continuous or predictable

  • Bulk delivery costs are high

  • Downtime risk is unacceptable

  • Safety and logistics are significant operational concerns

  • Purity control directly impacts product quality

Each facility is unique, and proper sizing of the nitrogen system requires understanding the following:

  • Required purity level

  • Flow rate (scfh or Nm³/hr)

  • Pressure requirements

  • Compressed air system capacity

  • Redundancy expectations

An engineered approach ensures that your entire air and gas system efficiently supports the plant, rather than disrupting it.

Partner With Experts in Industrial Air and Gas System Engineering

On-site nitrogen generation is not just about installing a generator. It requires integration with your compressed air system, controls strategy, pressure requirements, and long-term operational goals.

Rasmussen Air & Gas Energy offers comprehensive solutions for air and gas. We design and support on-site nitrogen gas systems including:

• PSA nitrogen generators

• Membrane nitrogen generators

• High-pressure nitrogen skids

• Complete system integration with compressed air infrastructure

Our team works with plant managers, engineers, and procurement teams to assess current nitrogen costs, logistics risk, and long-term operational objectives.

If you are considering replacing your bulk nitrogen supply or simply want to understand the economics for your facility better, our team can help you evaluate the opportunity with clarity and precision.

Contact Rasmussen Air & Gas Energy to discuss how on-site nitrogen generation can reduce cost, improve reliability, and put your nitrogen supply fully under your control.

 


Rasmussen Air and Gas Energy manufactures, rents, sells, and services industrial air compressor systems and compressed gas equipment. We support food and beverage, healthcare, manufacturing, agriculture, and other energy intensive industries with engineered compressed air system design, deployment, and lifecycle solutions that maximize productivity and manage flow for measurable financial performance.

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