How long does it take for a nitrogen generator to pay for itself?

Millomat's system recovered about 97% of its $330,000 cost in its first 25 months. At that savings rate, full payback lands at about 2.2 years from commissioning. Payback for any shop depends on how much nitrogen it uses and what it currently pays for delivered gas.

Why do laser cutting shops use nitrogen?

Nitrogen is used as an assist gas that keeps oxygen away from the cut, so the laser leaves clean, oxidation-free edges. Because it's needed on every job, nitrogen becomes a utility a laser shop depends on every shift.

How long does an on-site nitrogen generation system last?

A nitrogen generation system is built for about a 15-year life. Millomat's system reached near-full payback in about two years, which leaves 13 or more years of useful life in which every cubic metre saves about $0.49 against delivered gas.

What costs come with delivered nitrogen besides the gas itself?

Delivered nitrogen can carry rental, transportation, fuel surcharges and delivery charges on top of the price per cubic metre. The shop has no control over those costs, and any increase in them widens the gap in favour of on-site generation.

What goes into the operating cost of an on-site nitrogen system?

The two operating costs are electricity and maintenance. Over 25 months at Millomat’s total operating cost of $75,397.77 against 659,297 m³ produced.

How do I find out whether on-site nitrogen makes sense for my shop?

Book a free on-site nitrogen audit. We'll visit your facility, measure your actual usage and work out your payback before you commit to anything. Our team is local to Ontario, so you'll always know who to call.

Millomat Stampings cut its nitrogen operating cost by 81%

How a Mississauga laser cutting manufacturer reduced its nitrogen operating cost by 81%

Overview

Millomat Stampings was using approximately 26,000 m³ of nitrogen each month for its laser cutting operations. To reduce the ongoing cost of delivered nitrogen, Specialty Gas Canada designed and installed an on-site nitrogen generation system tailored to the company’s needs. In its first 25 months, the system generated more than 659,000 m³ of nitrogen, delivering approximately $320,000 in savings compared with purchasing the same volume of delivered gas. By August 28, 2026, these savings had recovered approximately 97% of Millomat’s initial investment. With an expected system lifespan of 15 years or more, Millomat is on track to enjoy more than a decade of nitrogen supply at virtually no net cost after recovering its initial investment, significantly reducing its long-term operating expenses.

About Millomat Stampings

Millomat Stampings Inc. is a family-owned custom fabrication company in Mississauga with more than 40 years of experience. Founded as a tool and die shop, it has grown into a fabrication operation driven by laser cutting. Millomat takes projects from design and prototyping through production for a range of industries.

The company specializes in burners, boilers, and manifolds for Canadian and U.S. customers. It also fabricates food service equipment, hospital chair structures, military-grade pipe, and custom automotive parts.

Nitrogen is an essential production utility here. It is used as an assist gas to produce clean, oxidation-free cuts, so the cost of nitrogen directly affects the cost of production.

The Challenge: The Nitrogen Bill that Scaled with Every Job

At about 26,000 m³ a month, nitrogen was one of Millomat's largest recurring utility costs. Even a modest reduction in what each cubic metre cost to supply would add up to substantial savings over a year. Millomat needed to know whether producing nitrogen on site could cut that operating cost enough to justify the upfront investment.

The Solution

Specialty Gas Canada evaluated Millomat's nitrogen requirements and designed an on-site generation system around its actual production needs. The system went live on July 15, 2024, with a total investment of $330,000.

Since commissioning, Millomat has produced nitrogen directly on site instead of relying entirely on delivered supply. Specialty Gas continues to maintain the system and provides local support after installation.

Two gray industrial units with digital displays and metal pipes in a brick-walled utility room

The Results

We tracked actual performance from commissioning through August 28, 2026. Over that period Millomat produced 659,297 m³ of nitrogen while spending $75,397.77 on electricity and maintenance.

Bar chart comparing delivered vs on-site nitrogen costs, highlighting 81% savings and $320,180 lower cost

Capital recovered by Aug 28, 2026

Capital recovered by August 20, 2026 bar chart with 97% margin and 2.2 years payback on dark panel

By August 28, 2026, the savings had recovered about 97% of the original $330,000 investment, leaving about $9,820 before full payback. At the savings recorded over the first 25 months, the system was on track to pay for itself in approximately 2.2 years from commissioning.

What the Economics Could look like Over 15 Years

The first 25 months show how quickly Millomat recovered its capital cost. The longer-term opportunity comes after payback. If Millomat keeps the same production rate and operating cost measured so far, the system would produce approximately 4.67 million m³ of nitrogen over 15 years.

15-year projection chart: on-site nitrogen cuts costs from $2.80M to $1.94M, with 69% lower total cost.

A $330,000 investment could return about $1.9 million in net savings over 15 years. Any rise in delivered gas pricing or surcharges would widen that gap.

What Millomat Says About SGCI!

“Specialty Gas Canada installed a nitrogen generator system in my shop, and I’ve been extremely happy with it. The system has performed flawlessly, and on the rare occasions I had an issue (which was usually my own doing), they were right on it and very helpful. Their customer support is excellent — organized, professional, and punctual. Their technicians are knowledgeable and well chosen for the job.

Jatinder T has been my rep, and he’s very knowledgeable and great to work with. He always follows up to make sure everything is running smoothly. The team also checks in on our system from time to time, which really shows that they care about their customers and stand behind their product. I would highly recommend having Specialty Gas Canada analyze your existing system — they truly know what they’re doing.”

Mani Sehmbi

President, Millomat Stampings INC.

Book your Free Nitrogen Audit

What could on-site nitrogen save your facility? Millomat's results are specific to its nitrogen demand, operating requirements, and previous gas costs. Your numbers will be different.

Specialty Gas will assess your current nitrogen usage and supply costs, then calculate the potential operating cost and estimated payback of an on-site system before you invest. Our Ontario-based team designs, installs, and maintains the system, so you have one local partner for the life of the equipment.

FAQ's

How long does it take for a nitrogen generator to pay for itself?

Millomat's system recovered about 97% of its $330,000 cost in its first 25 months. At that savings rate, full payback lands at about 2.2 years from commissioning. Payback for any shop depends on how much nitrogen it uses and what it currently pays for delivered gas.
Why do laser cutting shops use nitrogen?

Nitrogen is used as an assist gas that keeps oxygen away from the cut, so the laser leaves clean, oxidation-free edges. Because it's needed on every job, nitrogen becomes a utility a laser shop depends on every shift.
How long does an on-site nitrogen generation system last?

A nitrogen generation system is built for about a 15-year life. Millomat's system reached near-full payback in about two years, which leaves 13 or more years of useful life in which every cubic metre saves about $0.49 against delivered gas.
What costs come with delivered nitrogen besides the gas itself?

Delivered nitrogen can carry rental, transportation, fuel surcharges and delivery charges on top of the price per cubic metre. The shop has no control over those costs, and any increase in them widens the gap in favour of on-site generation.
What goes into the operating cost of an on-site nitrogen system?

The two operating costs are electricity and maintenance. Over 25 months at Millomat’s total operating cost of $75,397.77 against 659,297 m³ produced.
How do I find out whether on-site nitrogen makes sense for my shop?

Book a free on-site nitrogen audit. We'll visit your facility, measure your actual usage and work out your payback before you commit to anything. Our team is local to Ontario, so you'll always know who to call.