The $650 Million Facility Will Be the First to Be Built by Air Products Including Proven, Recently Acquired Gasification Technology
August 20, 2018 Lehigh Valley, Pa.
Air Products (NYSE: APD) announced today it has been awarded a long-term onsite contract to supply syngas to Jiutai New Material Co. Ltd for their multi-billion dollar mono-ethylene glycol project in Hohhot, China. Air Products will build, own and operate the air separation, gasification, and gas clean up processing facility that will include its proven and recently acquired Shell gasification technology. The project is expected to come onstream in the fourth quarter of Air Products’ fiscal year 2021 and is expected to add over $0.20 to Air Products’ earnings per share beginning in fiscal year 2022.
“Air Products is very pleased to have been awarded this very important gasification project by Jiutai. This facility will be the first plant 100 percent owned by Air Products and is a prime example of our gasification strategy focused on building, owning and operating the facilities and supplying syngas under long-term onsite contracts. We continue to build our credibility when it comes to gasification around the world. We acquired the Shell gasification technology, we executed at Lu’An in China, signed an agreement with Yankuang in China, just announced the world-class $8 billion project building on our success in Saudi Arabia, and now we have won this project for Jiutai. I repeat what I have said earlier, Air Products is by far, the premier gasification company in the world,” said Air Products Chairman, President and Chief Executive Officer Seifi Ghasemi.
Air Products will invest about $650 million to build, own and operate the facility, and will receive a fixed monthly fee under the long-term contract. The facility will be designed to produce over 500,000Nm3/hr of syngas, and will be comprised of five gasifiers, two approximately 100,000nm3/hr air separation units (ASU), with syngas purification and processing, as well as associated infrastructure and utilities. Jiutai will supply the coal feedstock and take all output from the plant.
Mr. Cui Lianguo, CEO of Jiutai, emphasized that, “Air Products is a world leading industrial gas company with great experience. In the past several months working with Air Products, the team showed excellent technical expertise and very high speed and efficiency. We are looking forward to working with Air Products very closely to build and operate a first-class coal-to-chemicals plant.”
Building on the Lu’An and Yankuang gasifier projects, this will be Air Products’ third opportunity to extend its industrial gas supply scope in China to include coal gasification and syngas supply. “The coal gasification market in China is expected to grow significantly over the next 10 years. This project will allow Air Products to further demonstrate our gasification capabilities to expand our presence in China, and position the company for future projects. Owning and operating coal gasifiers and syngas purification units is a logical extension of our global hydrogen and syngas business and builds on our decades of operating experience we have developed,” said Phil Sproger, vice president, Global Gasification and Asia Large Onsites Business Development, at Air Products.
The Jiutai Group was established in 2002 and is a large scale private enterprise engaged in the production of Methanol, Olefins, and other chemical products. Jiutai is headquartered in Beijing, China, with manufacturing bases in Shangdong, Inner Mongolia, the Yangtze River Delta, and the Pearl River Delta.
Continuing its leadership in gasification projects, last week Air Products announced that Saudi Aramco, Air Products, and ACWA Power signed a Term Sheet to form an over $8 billion gasification/power joint venture located at Jazan Economic City (JEC) in Saudi Arabia. In November 2017, Air Products announced a $3.5 billion coal-to-syngas joint venture with Yankuang Group in China’s Shaanxi Province. In April 2018, Air Products closed on a previously announced coal-to-syngas project joint venture with Lu’An Clean Energy Company in China’s Shanxi Province. Earlier this year, Air Products acquired Shell’s coal gasification technology and patents.
About Air Products
Air Products (NYSE:APD) is a world-leading Industrial Gases company in operation for over 75 years. The Company’s core industrial gases business provides atmospheric and process gases and related equipment to manufacturing markets, including refining and petrochemical, metals, electronics, and food and beverage. Air Products is also the world’s leading supplier of liquefied natural gas process technology and equipment.
The Company had fiscal 2017 sales of $8.2 billion from continuing operations in 50 countries and has a current market capitalization of about $35 billion. Approximately 15,000 passionate, talented and committed employees from a diversity of backgrounds are driven by Air Products’ higher purpose to create innovative solutions that benefit the environment, enhance sustainability and address the challenges facing customers, communities and the world. For more information, visit www.airproducts.com.
NOTE: This release contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about future earnings, business outlook and investment opportunities. These forward-looking statements are based on management’s reasonable expectations and assumptions as of the date this release is furnished. Actual performance and financial results may differ materially from projections and estimates expressed in the forward-looking statements because of many factors not anticipated by management, including, without limitation, global or regional economic conditions and supply and demand dynamics in market segments into which the Company sells; political risks, including the risks of unanticipated government actions; acts of war or terrorism; significant fluctuations in interest rates and foreign currencies from that currently anticipated; future financial and operating performance of major customers; unanticipated contract terminations or customer cancellations or postponement of projects and sales; our ability to execute the projects in our backlog; the impact of price fluctuations in natural gas and disruptions in markets and the economy due to oil price volatility; the Company’s ability to implement and operate with new technologies; the impact of changes in environmental, tax or other legislation, economic sanctions and regulatory activities in jurisdictions in which the Company and its affiliates operate; and other risk factors described in the Company’s Form 10-K for its fiscal year ended September 30, 2017. The Company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this release to reflect any change in the Company’s assumptions, beliefs or expectations or any change in events, conditions, or circumstances upon which any such forward-looking statements are based.