20-08-2018

Air Products to build own and operate coal-to-syngas plant in China

Air Products announced today it has been awarded a long-term onsite contract to supply syngas to Jiutai New Material Co. Ltd for their multi-billion dollar mono-ethylene glycol project in Hohhot, China. Air Products will build, own and operate the air separation, gasification, and gas clean up processing facility that will include its proven and recently acquired Shell gasification technology. The project is expected to come onstream in the fourth quarter of Air Products’ fiscal year 2021 and is expected to add over $0.20 to Air Products’ earnings per share beginning in fiscal year 2022. 

“Air Products is very pleased to have been awarded this very important gasification project by Jiutai. This facility will be the first plant 100 percent owned by Air Products and is a prime example of our gasification strategy focused on building, owning and operating the facilities and supplying syngas under long-term onsite contracts. We continue to build our credibility when it comes to gasification around the world. We acquired the Shell gasification technology, we executed at Lu’An in China, signed an agreement with Yankuang in China, just announced the world-class $8 billion project building on our success in Saudi Arabia, and now we have won this project for Jiutai. I repeat what I have said earlier, Air Products is by far, the premier gasification company in the world,” said Air Products Chairman, President and Chief Executive Officer Seifi Ghasemi.

Air Products will invest about $650 million to build, own and operate the facility, and will receive a fixed monthly fee under the long-term contract. The facility will be designed to produce over 500,000Nm3/hr of syngas, and will be comprised of five gasifiers, two approximately 100,000nm3/hr air separation units (ASU), with syngas purification and processing, as well as associated infrastructure and utilities. Jiutai will supply the coal feedstock and take all output from the plant. 

Mr. Cui Lianguo, CEO of Jiutai, emphasized that, “Air Products is a world leading industrial gas company with great experience. In the past several months working with Air Products, the team showed excellent technical expertise and very high speed and efficiency. We are looking forward to working with Air Products very closely to build and operate a first-class coal-to-chemicals plant.” 

Building on the Lu’An and Yankuang gasifier projects, this will be Air Products’ third opportunity to extend its industrial gas supply scope in China to include coal gasification and syngas supply. “The coal gasification market in China is expected to grow significantly over the next 10 years.  This project will allow Air Products to further demonstrate our gasification capabilities to expand our presence in China, and position the company for future projects. Owning and operating coal gasifiers and syngas purification units is a logical extension of our global hydrogen and syngas business and builds on our decades of operating experience we have developed,” said Phil Sproger, vice president, Global Gasification and Asia Large Onsites Business Development, at Air Products.

The Jiutai Group was established in 2002 and is a large scale private enterprise engaged in the production of Methanol, Olefins, and other chemical products. Jiutai is headquartered in Beijing, China, with manufacturing bases in Shangdong, Inner Mongolia, the Yangtze River Delta, and the Pearl River Delta. 

Continuing its leadership in gasification projects, last week Air Products announced that Saudi Aramco, Air Products, and ACWA Power signed a Term Sheet to form an over $8 billion gasification/power joint venture located at Jazan Economic City (JEC) in Saudi Arabia. In November 2017, Air Products announced a $3.5 billion coal-to-syngas joint venture with Yankuang Group in China’s Shaanxi Province. In April 2018, Air Products closed on a previously announced coal-to-syngas project joint venture with Lu’An Clean Energy Company in China’s Shanxi Province. Earlier this year, Air Products acquired Shell’s coal gasification technology and patents.