Air Products' Blue Hydrogen Project in Louisiana Moves Forward with Heftier Price Tag

Researched by Industrial Info Resources (Sugar Land, Texas)-- Industrial gas producer Air Products and Chemicals Incorporated's (NYSE:APD) (Lehigh Valley, Pennsylvania) board of directors is pressing forward with plans to build a blue hydrogen/blue ammonia plant in Louisiana, but with a $2.5 billion increase in the project's price tag, the company's chief executive officer said Tuesday.

Speaking during the company's fiscal fourth-quarter earnings conference call, Chief Executive Officer Seifi Ghasemi announced the expanded project. Air Products first announced the project in 2021, with an estimated cost of $4.5 billion. The new cost is $7 billion. Ghasemi attributed part of the cost increase to inflation and tight labor availability, but also to additional infrastructure in anticipation of an expansion of the facility.

Located in Geismar, Louisiana, the complex would produce as much as 750 million standard cubic feet per day of blue hydrogen, as well as blue ammonia. Carbon dioxide (CO2) from the process will be sequestered. Construction is tentatively planned to kick off in the second quarter of 2024, with completion in second-quarter 2027. Subscribers to Industrial Info's Global Market Intelligence (GMI) Chemical Processing project and plant databases can click here for a detailed project report and click here for the related plant profile.

Blue hydrogen is produced when natural gas is split into hydrogen and CO2: the CO2 is captured and then stored. The hydrogen then can be combined with nitrogen to produce blue ammonia.

Ghasemi said passage of the U.S. Inflation Reduction Act of 2022 and its tax benefits aimed at reducing carbon emissions was another reason to move the project forward.

Growing demand for hydrogen was another factor in the expansion.

"We're not going to leave any money on the table--we will price the product right from the start," Ghasemi said. He added, "We should not be in a hurry to sell this stuff cheap just because it will make everybody happier."

Industrial Info is tracking 131 Air Products projects, with a total investment value of $11.43 billion. Subscribers to Industrial Info's Global Market Intelligence (GMI) Chemical Processing Project Database can click here for a list of detailed project reports. For related information, see June 7, 2023, article - Air Products Pours Capital into U.S., Canadian Hydrogen Growth.

For Air Products' just-ended fiscal fourth quarter, net income attributable to the company totaled $692.6 million, compared with $583.1 million in fourth-quarter 2022. Sales for the just-ended quarter totaled $3.19 billion, compared with $3.57 billion a year earlier.

Air Products expects capital expenditures for fiscal year 2024 to be $5 billion to $5.5 billion, compared to $5.2 billion for the current fiscal year.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).