LNG

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 only difficulty with natural gas is that it has been economically challenging to transport due to its mass in its gaseous state. 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. In the United States, for example, less than three percent of U.S. natural gas consumption in 2004 resulted from LNG imports. This number is expected to rise to more than 21 percent by 2025.

President Bush Speaks about LNG
"Technology is allowing us to make better use of natural gas. Technology is also helping us to get at reserves of natural gas that cannot be easily reached by pipelines. Today, we're able to super cool natural gas into liquid form so it can be transported on tankers and stored more easily. Thanks to this technology, our imports of liquefied natural gas nearly doubled in 2003. Last year, imports rose another 29 percent."

                                                                                    President George W. Bush
                                                                                    Washington, D.C.
                                                                                    April 27, 2005

Air Products technology is key in making these stranded natural gas reserves found in remote areas available for use domestically and on a global basis.

The Basics
� LNG is simply natural gas that has been changed to a liquid by reducing its temperature to -162� C (-260� F) at atmospheric pressure.

� Liquid conversion is done for economical transport, as LNG takes up only 1/600 the space as natural gas in its gaseous state.

� The key in converting natural gas to LNG effectively is to minimize the loss of product during the production process. Air Products has established itself as a world leader in this area.

Air Products and LNG
A vast majority of total worldwide LNG capacity is produced using Air Products' technology. Air Products designs the LNG process technology and manufactures the main heat exchangers, which are used to liquefy natural gas at major gas processing facilities around the world. The company has designed, manufactured and exported over 75 LNG heat exchangers in the last 35 years.

A typical LNG heat exchanger, or unit, spans about 190 feet in length, stretches over 15 feet in diameter, weighs 300 tons, and takes about 18 to 24 months to build. Air Products has exported this equipment to destinations such as Abu Dhabi, Australia, Brunei, Malaysia, Qatar, Oman, Nigeria and other regions. LNG produced with Air Products equipment has been shipped to Japan, Korea, Taiwan, Europe, the United States, and China, an important growing market.

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.

"This novel AP-X liquefaction process combines proven Air Products process technologies and key liquefaction equipment to provide the industry with low spigot cost, reliable production, bankable projects and flexible operation as new markets develop," said Mark Modjeska, director, LNG at Air Products.

TechnologyCenter in Wilkes-Barre, Pa.
Air Products' LNG operations are based out of its 160,000-square-foot cryogenic equipment manufacturing plant in Wilkes-Barre, Pennsylvania, where the company has conducted operations since 1955. About 250 team members operate the facility. Nearly all of the equipment manufactured by this highly-skilled labor force is exported to industrial customers around the world. Air Products continues to invest significant capital in this facility, spending over $10 million in the last several years alone to upgrade manufacturing processes and rail lines serving the plant, as well as to purchase special equipment to transport super-loads from the plant. In August 2005, the company announced yet another expansion to its Wilkes-Barre facility to meet growing customer demand.

Air Products and Energy
Air Products is a leading global provider of products, technology and equipment used to 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 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. 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.

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