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Researched by Industrial Info Resources (Sugar Land, Texas)--Industrial gases company Air Products and Chemicals Incorporated (NYSE:APD) (Lehigh Valley, Pennsylvania) is keeping its head above water as many of the industries it serves, such as refining, metals and manufacturing, struggle to stay afloat amid the COVID-19 pandemic. Although the company's recently ended fiscal fourth-quarter net income was down 5% year-over-year at $495 million, sales of $2.3 billion were up 2% and executives were looking forward to a post-pandemic resurgence in demand. Industrial Info is tracking nearly $60 billion in active Air Products projects worldwide, including $2.3 billion worth in the U.S.
Click on the image at right for a graph detailing Air Products' active U.S.-based projects, by project type.
Air Products is avoiding economic headwinds as it pursues its largest-ever U.S. investment: an estimated $500 million steam methane reformer (SMR) in Texas City, Texas, which will produce hydrogen for Gulf Coast Ammonia LLC's (Miami Beach, Florida) world-scale anhydrous ammonia plant, also planned for Texas City, via its existing hydrogen pipeline system in the Gulf Coast. The facility also will feature an air separation unit that will supply nitrogen to GCA under a 20-year contract. For more information, see Industrial Info's project report.
SMR units account for much of Air Products' major activity in 2020. In spring, the company acquired five SMR hydrogen-production plants from PBF Energy Incorporated (NYSE:PBF) (Parsippany, New Jersey), with a combined production capacity of almost 300 million standard cubic feet per day, to supply hydrogen to PBF-owned refineries. Air Products also is weighing a proposed SMR addition at a hydrogen complex in Geismar, Louisiana, which will provide a large but currently unspecified amount of hydrogen to support two proposed projects at Nutrien Limited's (NYSE:NTR) (Saskatoon, Saskatchewan) fertilizer plant in Geismar. For more information, see Industrial Info's project report.
PBF chose to sell the hydrogen assets before recently announcing plans to idle several units at its Paulsboro Refinery in New Jersey by the end of this year in response to low fuel demand. PBF's refineries ran at just 70% capacity during the most recent quarter, and the company already has made more than 25 major initiatives to cut costs this year. For more information, see October 30, 2020, article - PBF Energy to Idle Paulsboro Refining Units, Looks for More Cost Reductions.
"When you look at the U.S. refining capacity of somewhere between 18 million and 19 million barrels a day, you have already had announcements about shutdowns of about 800,000 barrels, which is about 4%," said Seifi Ghasemi, the chief executive officer of Air Products, in an earnings-related conference call. "Has there been enough of a demand destruction to justify that? Or is that going to come back and create shortages? Or is more needed? I really don't know. But the main thing is that what we have seen up to now hasn't had any material effect on our business. And as we go forward, we do not expect any material effect on our business, based on what we know today."
When asked about Royal Dutch Shell plc's (NYSE:RDS.A) (The Hague, Netherlands) recent decision to close eight of its refineries, including two in California and Louisiana with which Air Products held supply contracts, Ghasemi shrugged off concerns: "Quite frankly, we don't make that much money selling hydrogen to Shell anyway."
But Air Products' biggest project-related announcement from the past quarter comes from the Middle East. The company announced it is working with ACWA Power (Riyadh, Saudi Arabia) to develop a world-scale hydrogen-based ammonia production facility in the Neom development in Tabuk, Saudi Arabia. The new plant is designed to produce and store 650 tons per day of hydrogen of "green" hydrogen and 1.2 million tons per year of "green" ammonia from electrolysis, using 4 gigawatts of offshore solar and wind energy. For more information, see Industrial Info's project report.
The project is well-suited for Neom, a massive undertaking by Saudi Arabia to develop an entire city using "smart grid" technology and renewable energy sources. The total price tag is estimated at $500 billion, which is expected to be covered by the Public Investment Fund of Saudi Arabia and international investors. The first phase of the project, which includes the ammonia production facility, is currently set to wrap up toward the end of 2025.
"We continue to create and win mega-projects around the world that help our customers meet their most pressing needs, for cleaner energy and environmental solutions, and we expect these projects to drive our growth for decades to come," Ghasemi said.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
Click on the image at right for a graph detailing Air Products' active U.S.-based projects, by project type.Air Products is avoiding economic headwinds as it pursues its largest-ever U.S. investment: an estimated $500 million steam methane reformer (SMR) in Texas City, Texas, which will produce hydrogen for Gulf Coast Ammonia LLC's (Miami Beach, Florida) world-scale anhydrous ammonia plant, also planned for Texas City, via its existing hydrogen pipeline system in the Gulf Coast. The facility also will feature an air separation unit that will supply nitrogen to GCA under a 20-year contract. For more information, see Industrial Info's project report.
SMR units account for much of Air Products' major activity in 2020. In spring, the company acquired five SMR hydrogen-production plants from PBF Energy Incorporated (NYSE:PBF) (Parsippany, New Jersey), with a combined production capacity of almost 300 million standard cubic feet per day, to supply hydrogen to PBF-owned refineries. Air Products also is weighing a proposed SMR addition at a hydrogen complex in Geismar, Louisiana, which will provide a large but currently unspecified amount of hydrogen to support two proposed projects at Nutrien Limited's (NYSE:NTR) (Saskatoon, Saskatchewan) fertilizer plant in Geismar. For more information, see Industrial Info's project report.
PBF chose to sell the hydrogen assets before recently announcing plans to idle several units at its Paulsboro Refinery in New Jersey by the end of this year in response to low fuel demand. PBF's refineries ran at just 70% capacity during the most recent quarter, and the company already has made more than 25 major initiatives to cut costs this year. For more information, see October 30, 2020, article - PBF Energy to Idle Paulsboro Refining Units, Looks for More Cost Reductions.
"When you look at the U.S. refining capacity of somewhere between 18 million and 19 million barrels a day, you have already had announcements about shutdowns of about 800,000 barrels, which is about 4%," said Seifi Ghasemi, the chief executive officer of Air Products, in an earnings-related conference call. "Has there been enough of a demand destruction to justify that? Or is that going to come back and create shortages? Or is more needed? I really don't know. But the main thing is that what we have seen up to now hasn't had any material effect on our business. And as we go forward, we do not expect any material effect on our business, based on what we know today."
When asked about Royal Dutch Shell plc's (NYSE:RDS.A) (The Hague, Netherlands) recent decision to close eight of its refineries, including two in California and Louisiana with which Air Products held supply contracts, Ghasemi shrugged off concerns: "Quite frankly, we don't make that much money selling hydrogen to Shell anyway."
But Air Products' biggest project-related announcement from the past quarter comes from the Middle East. The company announced it is working with ACWA Power (Riyadh, Saudi Arabia) to develop a world-scale hydrogen-based ammonia production facility in the Neom development in Tabuk, Saudi Arabia. The new plant is designed to produce and store 650 tons per day of hydrogen of "green" hydrogen and 1.2 million tons per year of "green" ammonia from electrolysis, using 4 gigawatts of offshore solar and wind energy. For more information, see Industrial Info's project report.
The project is well-suited for Neom, a massive undertaking by Saudi Arabia to develop an entire city using "smart grid" technology and renewable energy sources. The total price tag is estimated at $500 billion, which is expected to be covered by the Public Investment Fund of Saudi Arabia and international investors. The first phase of the project, which includes the ammonia production facility, is currently set to wrap up toward the end of 2025.
"We continue to create and win mega-projects around the world that help our customers meet their most pressing needs, for cleaner energy and environmental solutions, and we expect these projects to drive our growth for decades to come," Ghasemi said.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
