Praxair to Build Plant and Pipeline in Memphis

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Researched by Industrial Info Resources (Sugar Land, Texas)--Praxair Incorporated (NYSE:PX) (Danbury, Connecticut) and Valero Refining, a division Valero Energy Corporation (NYSE:VLO) (San Antonio, Texas), finalized a supply agreement in January 2010 in which Praxair will supply Valero's refinery in Memphis, Tennessee, with oxygen and nitrogen.

Praxair has made permit application to construct a 450-ton-per-day combined-capacity air-separation plant to provide oxygen and nitrogen via a planned pair of pipelines. The grassroot air separation plant will be built at the Frank C. Pidgeon Industrial Park in Memphis, and the two pipelines will run from there to the refinery.

Engineering for the project will be handled by Praxair's engineering and technical group out of Tonawanda, New York. Construction preparation for the plant and two 6.5-mile pipelines are under way. Ordering of some long-lead equipment has commenced, but Praxair is awaiting final permit approval, which is expected in June 2010.

The combined total investment value of the two projects amounts to $50 million, with the largest portion being the construction of the air separation plant. Plant startup is targeted for late 2011. The Memphis and Shelby County Industrial Development Board estimates that the two projects will have a positive economic impact on the area, amounting to approximately $99 million over the next 10 years. The pot was sweetened to attract Praxair to the chosen location by offering a 10-year PILOT (payment-in-lieu-of taxes) abatement worth $2.9 million.

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