Air Products forms US$1.3 bn jv with Chinese company
US-based industrial gases company Air Products and Lu’An Clean Energy Company have formed a US$1.3 billion joint venture for Coal-to-Syngas Project in China’s Shanxi Province.
The company says it will significantly expand its scope of supply serving Lu’An Mining (Group)’s syngas-to-liquids production in China. Air Products has already invested US$300 million to build, own and operate four large air separation units (ASUs) to supply the Changzhi City site.
Under the new agreement, Air Products will contribute the ASUs and invest a further US$500 million for a 60% ownership in the new joint venture. With this majority position, Air Products will fully consolidate the jv financial results.
Lu’An will contribute the gasification and syngas clean-up system, will receive US$500 million of cash and will have a 40% ownership in the new jv. The new joint venture, to be called Air Products Lu’an (Changzhi) Co., will own and operate the ASUs and gasification and syngas clean-up system. The jv will receive coal, steam and power from Lu’An and will supply syngas to Lu’An under a long-term, onsite contract.
Closing is expected as soon as possible, pending initial operational start-up and government and regulatory approvals.
Seifi Ghasemi, Chairman/President/CEO of Air Products said, “We are delighted to have Lu’An, a leading clean energy company in China, as our joint venture partner. The creation of this world-class JV is perfectly in line with our stated strategy of deploying our significant cash to grow by acquiring existing assets and expanding our scope of supply to include syngas.”
“Extending our strong partnership/relationship with Air Products through this new joint venture enables us to take advantage of world-leading project management and operational expertise to deliver syngas for this landmark energy project,” said Li Jinping, Chairman of Lu’An.
Air Products says it has been helping manufacturers in China improve productivity, efficiency, quality and environmental performance through its strong local position, as well as innovative and sustainable solutions for 30 years.
Air Products has been 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 2016 sales of US$7.5 billion from continuing operations in 50 countries and has a current market capitalisation of approximately US$30 billion and approximately 16,000 employees.