Air Products (NYSE: APD) today announced an agreement to acquire Royal Dutch Shell plc’s (Shell’s) Coal Gasification Technology business as well as Shell’s patent portfolio for Liquids (Residue) Gasification. Financial terms are not being disclosed, and the acquisition is expected to close in the coming months.
As a leading industrial gas company, Air Products has extended its onsite supply model to use coal gasification to generate synthesis gas (syngas) for major projects. Acquiring Shell’s coal gasification process capabilities will further support previously announced projects by Air Products, such as Lu’An in Changzhi, Shanxi Province, China, and future projects.
Shell has been at the forefront of gasification innovation over the past 50 years. Gasification technologies offer a way to take varied lower-value feedstocks and convert them in a lower-emission manner into syngas. Air Products can then provide this syngas to customers to make higher-value products.
“The acquisition of Shell’s technology, already in operation at more than 20 coal gasification plants, gives us access and opportunities to fully explore outsourcing options to produce and supply syngas for customers planning to use gasification,” said Seifi Ghasemi, chairman, president and chief executive officer at Air Products. Ghasemi emphasized this acquisition supports Air Products’ continued focus on providing a full scope of industrial gases, rather than a strategic shift into technology licensing.
In addition, the two companies also have formed a strategic alliance in Liquids Gasification to provide a range of solutions to the market, including engineering, procurement and construction activities and plant operations, as well as technology licensing. Ghasemi said Air Products looks forward to an important role as a project operating partner for the supply of industrial gases in the strategic alliance and leveraging Shell’s technology lead in the liquids gasification area, as demonstrated at the world-scale Jazan combined Gasification/Refinery project in Jazan Economic City, Saudi Arabia.