Air Products and Chemicals Inc.
) has inked a deal with Enterprise Products Operating LLC, a
fully-owned subsidiary of Enterprise Products Partners L.P., to
increase hydrogen supply for refinery and petrochemical customers
connected to Air Products' vast Gulf Coast Connection Pipeline
Under the long-term agreement, Air Products will build, own
and operate a 40 million standard cubic feet per day hydrogen
production facility. The facility will process a hydrogen-rich
off-gas stream from a new propane dehydrogenation (PDH) facility
which Enterprise is currently building in Mont Belvieu, TX. The
PDH facility is expected come on line in the third quarter of
Air Products already processes off-gas at Enterprise's Mont
Belvieu complex servicing an existing facility and the deal
expands its long-term relationship with Enterprise.
With the agreement in place, Air Products can cater to the
increasing demand of its customers as well as increase the supply
reliability and flexibility of its system. It also enables the
company to purchase more off-gas during the life of the
Air Products benefits from a diverse customer base, sustained
pricing power and cost-reduction measures. New business deals and
strategic investments are expected to support results in fiscal
Air Products is also seeing incremental opportunities in the
liquefied natural gas (LNG) space. Moreover, it is making
significant progress in its hydrogen business and is constructing
a new world-scale hydrogen production plant in Canada.
However, Air Products' tonnage gases business continues to
face challenges due to maintenance outages. Moreover, higher
energy costs pose a threat to margin expansion.
Air Products is a Zacks Rank #4 (Sell) stock.
Other companies in the chemical industry with favorable Zacks
LyondellBasell Industries NV
). All of them hold a Zacks Rank #2 (Buy).
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