Industrial gas producer and supplier,
) recently announced the commencement of operations at a new
hydrogen plant located at Valero's St. Charles refinery in Norco,
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The new state-of-the-art plant has a production capacity of 135
million standard cubic feet per day (scfd) of hydrogen. Praxair's
plant start-up is a result of a long-term contract, signed in Jun
2011, to supply 270 million standard cubic feet per day (scfd) of
hydrogen to Valero Energy Corporation.
Additionally, Praxair is working towards expanding its Louisiana
pipeline by an additional 50 miles and connect its new plant at
St. Charles with its existing plant in Geismar. The extension is
expected to consummate in the fourth quarter of 2013. These
expansions will enable Praxair satisfy Valero's as well as other
customers' hydrogen needs.
It is evident from the present scenario that the growth prospects
of industrial gas producers are very bright going forward, with
demand for gases expected to increase manifold due to their wide
application areas. Hydrogen for refining; oxygen for healthcare;
and nitrogen and carbon dioxide for oil and gas production are
being increasingly used.
The current Zacks Consensus Estimate for Praxair for years 2013
and 2014 are pegged at $5.95 and $6.70, reflecting annual growth
of 6.8% and 12.7%, respectively. Estimated 3-5 years earnings
growth rate for the company is 11.6% as compared with just 9.6%
for the peer group.
Praxair has a market capitalization of roughly $35.5 billion and
bears a Zacks Rank #3 (Hold). Other stocks to watch out for in
the industry are
Eastman Chemical Co.
LSB Industries Inc.
), each with a Zacks Rank #2 (Buy).