Energy

Air Products is a leading global provider of products, technology and equipment used to help meet the world's growing energy processing and distribution needs. The company is a major supplier of hydrogen to oil refineries, which use hydrogen to make cleaner burning fuels, and with over 30 hydrogen fueling stations located in the U.S. and around the world, it is at the forefront of research for hydrogen-powered fuel cells. In addition, Air Products is playing a pivotal role in helping the world effectively access its abundant natural gas reserves in some of the most remote areas of the world. The company is a leader in supplying the technology and equipment used to produce liquefied natural gas (LNG), as well as a key supplier for gas-to-liquids (GTL) facilities, which convert natural gas into high purity transportation fuels that are free from pollutants and greatly reduce harmful chemical emissions.

AIR PRODUCTS AND HYDROGEN
No company knows refinery hydrogen like Air Products, nor has any company spent as much time as Air Products developing hydrogen as a fuel. With over 50 plants and approximately 500 miles of pipeline, Air Products is the world's largest producer of outsourced hydrogen. Today the company is leveraging its vast hydrogen experience and resources to advance hydrogen fuel cell technology and make the hydrogen economy a reality.

Refinery Hydrogen
Air Products, with close to a 50 percent share of the global market for outsourced hydrogen, is the world's leading supplier of hydrogen. Hydrogen is used in a variety of industries, but the largest use is by refineries to process cleaner burning gasoline and diesel fuels to meet environmental regulations. Here's how it works:

Since the average barrel of processed crude oil has become heavier (a higher carbon-to-hydrogen ratio) and more sour (more sulfur), hydrogen has become increasingly important in oil refineries to mitigate these issues. Through a chemical reaction, hydrogen lightens heavier crude and enables the removal of sulfur. This allows refineries to produce higher value product mixes, such as gasoline, and meet increasingly stringent U.S. and European low-sulfur fuel specifications.

Air Products has five new hydrogen facilities under construction and scheduled to come on-stream in late 2005, early 2006. The new facilities will be located in Convent, Louisiana; Sarnia, Ontario, Canada; Edmonton, Alberta, Canada; Baytown, Texas and Port Arthur, Texas. The new plants will represent about 450 million standard cubic feet per day of additional hydrogen capacity, a 35 percent increase across Air Products' system.

Energy from Hydrogen
The use of hydrogen as a commercial energy source may be in its early stages, however great strides are being made everyday. Challenges to the hydrogen economy include, integrating systems, creating a fueling infrastructure and gaining consumer acceptance. Air Products is helping to meet these challenges. Its contributions include:

� Air Products is the leader with over 30 hydrogen fueling stations worldwide, and is a leading developer of hydrogen energy services and equipment.

� Air Products is already working with original equipment manufacturers (OEMs) for automotive and other consumer products, equipment manufacturers, and commercial users to demonstrate and test hydrogen's benefits.

� Air Products is actively involved in fuel cell and internal combustion applications and demonstration projects by partnering with industry and government.

� Air Products is a principal participant in initiatives to make direct hydrogen economically viable; e.g., hydrogen reforming and generation, storage technologies, fueling components, and infrastructure.

� Air Products is an active and knowledgeable member of codes and standards development committees, which are key to furthering the hydrogen economy.

� Air Products has an unsurpassed safety record in the production, storage, handling, and distribution of hydrogen and other gases. The company has earned more safety-related awards than any other industrial gas company and has enthusiastically assumed a leadership role in supporting the hydrogen fuel technology community in the safe use of hydrogen.

Air Products and Natural Gas
Natural gas is one of the most abundant natural resources on Earth. It currently supplies about 25 percent of the energy required to power the world's homes, businesses, vehicles and industries. Geologists say that natural gas reserves are plentiful and will last for several hundred years―long after crude oil reserves have been exhausted. This makes natural gas an extremely attractive energy source to meet ever increasing global energy demand. The difficulty with natural gas is that about half of the world's reserves are considered remote or stranded and natural gas has been economically challenging to transport due to its mass in its gaseous state.

Liquefied Natural Gas (LNG)
Traditionally natural gas has been transported via pipelines, making it a regional energy source. However, when chilled to -162� C (-260� F) natural gas converts to a liquid form―liquefied natural gas (LNG)―and takes up only 1/600 the space as natural gas in its gaseous form. This physical change makes LNG an economical energy source to transport worldwide for varied use.

Air Products, the world's leading supplier of technology and equipment used to produce LNG, is playing a pivotal, global role in helping to transform the Earth's abundant natural gas reserves to a liquid state and make this energy source economical to transport where it is needed. Air Products designs the LNG liquefaction process technology and manufactures the main heat exchangers, which are used to liquefy natural gas. The company has designed, manufactured and exported over 75 LNG heat exchangers in the last 35 years.

Air Products' support of the LNG industry worldwide goes beyond providing the process license and equipment for the baseload liquefaction process. Air Products' proprietary technology capabilities are provided throughout the LNG value chain. In shipping, it provides dry inert gas generators for LNG carriers and shipboard membrane nitrogen systems. Offshore, it provides membrane nitrogen and natural gas dehydration membrane systems. For LNG production and import terminals, it provides nitrogen plants for inerting and Btu (British thermal unit) adjustment, respectively. The company also provides LNG peak shavers for the distribution portion of the LNG value chain.

AP-X Liquefaction Process Technology
Air Products recently introduced an exciting, new patented technology called AP-X Liquefaction Process Technology, which is expected to significantly lower LNG production costs. AP-X (X stands for expandable) allows LNG production trains to produce approximately eight million tons of product per year (mtpa), over a 50 percent increase from today's five mtpa standard. This new patent marries Air Products' standard LNG technology with the company's nitrogen technology. Air Products' AP-X LNG supports a continuing market trend toward larger LNG process trains that increase economies of scale.

Gas-to-Liquids (GTL) Facilities
Another key benefit of natural gas is that it can be converted to clean, liquid fuels. In the gas-to-liquids (GTL) process, natural gas is converted to synthesis gas, a mixture of hydrogen and carbon monoxide. This in turn is converted to synthetic crude, which is then converted to high purity transportation fuels. These fuels are free from sulphur, nitrogen and other pollutants, and drastically reduce emissions.

Air Products is a major supplier of massive oxygen plants to GTL facilities. It is one of only a few companies in the world with the technical and operating experience to provide the high degree of reliability, safety and performance required for world scale GTL plants. Air Products has built oxygen plants for customers in the United States, the Americas, Europe, Asia, South Africa and in the Middle East.

About Air Products
Air Products (NYSE:APD) serves customers in technology, energy, healthcare and industrial markets worldwide with a unique portfolio of products, services and solutions, providing atmospheric gases, process and specialty gases, performance materials and chemical intermediates. Founded in 1940, Air Products has built leading positions in key growth markets such as semiconductor materials, refinery hydrogen, home healthcare services, natural gas liquefaction, and advanced coatings and adhesives. The company is recognized for its innovative culture, operational excellence and commitment to safety and the environment and is listed in the Dow Jones Sustainability and FTSE4Good Indices. The company has annual revenues of $8.1 billion, operations in over 30 countries, and more than 20,000 employees around the globe. For more information, visit www.airproducts.com.

November 2005