Air Products and Chemicals Inc.
) announced its plans to build, own and operate a new world-scale
hydrogen production plant in Canada. The market reacted
positively to the news and Air Products' shares rose as much as
1.5% following the announcement.
The plant will be located adjacent to Shell Canada's Scotford
facility located northeast of Edmonton, Alberta. The plant is
expected to produce over 150 million standard cubic feet per day
(MMSCFD) of hydrogen. The facility will be connected to Air
Products Canada's existing Heartland Hydrogen Pipeline system,
which supplies refiners, upgraders, chemical processors and other
industries in the Alberta Industrial Heartland region.
The Canadian plant will be built under a long term agreement,
according to which, Air Products will supply hydrogen and steam
to Shell Scotford. This contract represents the first such award
under a recently signed Enterprise Framework Agreement (EFA)
between Shell and Air Products.
The Shell Scotford industrial location will get an advantage
of supply reliability with the contract. Air Products' 30-mile
hydrogen pipeline is fed by two existing hydrogen production
plants in Edmonton that produce over 180 MMSCFD of hydrogen. The
company's hydrogen pipeline system will provide a reliable source
of hydrogen to the refineries, upgraders, and other customers in
the Heartland region where the demand for hydrogen is high.
The new hydrogen plant will be built through the global
hydrogen alliance between Air Products and Technip. The plant
will have up-to-date technologies installed for reduction of
energy consumption and also emissions. The plant will also
include optimal heat integration which lowers feedstock
consumption during production.
The hydrogen plant is expected to be commissioned in the
second half of 2015 after receiving regulatory approval.
Recently, Air Products also entered into a long-term
industrial gas supply contract with India-based Bharat Petroleum
Corporation Limited. The deal holds significant potential of
growth for the company.
Per the contract, Air Products will supply hydrogen, syngas (a
mixture of purified hydrogen and carbon monoxide), nitrogen and
oxygen to BPCL's Kochi Refinery and its proposed petrochemicals
complex by constructing and operating several new industrial gas
production facilities in Kochi, India.
Air Products currently holds a Zacks Rank #2 (Buy).
Other companies in the chemical industry worth considering are
). All of them hold a Zacks Rank #2 (Buy).
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