Industrial gas giant
Air Products and Chemicals Inc
) has announced the launch of Phase One of its two-stage carbon
capture project in Port Arthur, Tex. Phase One has been designed
to capture carbon dioxide (CO2) from one of the company's steam
methane reformers (SMR) located in the Valero Port Arthur
Refinery. The Phase Two of the project, which involves a second
SMR at the location, is expected to be completed by Apr 2013.
The project is estimated to capture roughly one million tons of
CO2 annually. The captured carbon dioxide will then be restored,
purified and transported by Air Products through a pipeline to an
oil recovery project (West Hastings Unit) in Texas operated by
The Port Arthur project came into existence with the initiation
of the Industrial Carbon Capture and Storage (ICCS) program by
the U.S. Department of Energy (DOE). The program was introduced
mainly with an aim to mitigate the effects of climate change
through carbon capture, utilization and storage.
The DOE has financed roughly 66% of the over $400 million carbon
capture project. Air Products received $253 million from DOE in
Jun 2010 under the ICCS program, which is funded by the American
Recovery and Reinvestment Act (ARRA). The company has also
received an additional $30 million funding for final engineering,
design, construction and project operation through Sep 2015. The
company is expected to help in the recovery of 1.6 million to 3.1
million of additional barrels of domestic oil annually.
A few days ago, Air Product came out with its first-quarter
fiscal 2013 (ended Dec 31, 2012) results. The results were
impressive as both revenues and adjusted earnings outpaced the
Zacks Consensus Estimates. The company's adjusted earnings from
continued operations of $1.30 a share beat the Zacks Consensus
Estimate by a penny. Consolidated net income from continuing
operation increased 22.6% year over year to $276.9 million
Revenues rose 10.4% year over year to $2,562.4 million, beating
the Zacks Consensus Estimate of $2,471 million. Sales were aided
by higher volumes in the Tonnage Gases, Equipment and Energy
divisions and acquisitions.
For fiscal 2013, Air Products plans to take a number of steps
including cost control measures, restructuring actions, price
improvements and volume growth. The company expects that its
recent strategic moves will position it for future growth and
profitability despite the modest economic backdrop.
Air Products retains a short-term (1 to 3 months) Zacks Rank
Other companies in the chemical industry worth considering are
E. I. du Pont de Nemours
and Company (
). While Arkema retains a Zacks Rank #1 (Strong Buy), both BASF
and DuPont hold a Zacks Rank #2 (Buy).
AIR PRODS & CHE (APD): Free Stock Analysis
(ARKAY): ETF Research Reports
BASF SE (BASFY): Free Stock Analysis Report
DU PONT (EI) DE (DD): Free Stock Analysis
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