Joint Venture to Invest ~$250 Million in Project Strategically Located in Xuwei National Petrochemical Park While Also Establishing New Air Products Merchant Supply Capability in the Area
Lehigh Valley, PA /PRNewswire/ - Air Products (NYSE: APD) today announced a new joint venture (JV) with Debang Xinghua Technology Co., Ltd., a subsidiary of Jiangsu Debang Chemical Industrial Group Co., Ltd. ("Debang Group"), to build, own and operate a coal-to-syngas processing facility in Xuwei National Petrochemical Park, Lianyungang City, Jiangsu Province, China.
Air Products will own 80 percent of the JV, and Debang Group will own 20 percent. The JV will own and operate the air separation unit, gasification and purification assets under a 20-year contract for a fixed monthly fee, supplying syngas to support Debang Group's 350,000 tons-per-year chemicals facilities. The project is expected to be onstream in 2023.
In addition, Air Products will be the exclusive purchaser of merchant liquid products from the JV facility, establishing a strong supply position to serve the high-growth chemical, opto-electronics and general manufacturing industries in the Lianyungang area and key surrounding cities north of Jiangsu and south of Shandong in East China.
Seifi Ghasemi, Air Products' chairman, president and chief executive officer, said, "This new project furthers our gasification growth strategy in the Xuwei National Petroleum Park—one of seven national integrated oil refining and petrochemical parks in China—while also creating new merchant supply capability for us to serve a high density manufacturing base in the region. We are honored to form this JV with Debang Group to own and operate the gasification facilities and supply the syngas that will enable Debang Group to produce needed ammonia and other products for their customers."
Zhao Xiang Hai, Debang Group's chairman, said, "This project is an important action for Debang Group to follow 'China's East, Central, and West Regional Cooperation Demonstration Zone' strategy, accelerate the pace of scientific and technological innovation, eliminate outdated production capacity, and build a competitive and innovative green chemical enterprise group. This project received strong support from the municipal government and the Xuwei Park's management committee, and we believe this is only the beginning. We look forward to our strong collaboration with Air Products to provide quality, value, and high efficiency through this strategic project."
Continuing its leadership in gasification projects, Air Products most recently announced the completion of an asset buyback and long-term gas supply agreement for Jinmei Huayu's coal-to-clean fuels project in Jincheng City, Shanxi Province, China. Additional large-scale, multi-billion-dollar gasification projects include the Lu'An, Jiutai and Yankuang Group projects in China, as well as the Jazan project in Saudi Arabia.
About Air Products
Air Products (NYSE:APD) is a world-leading industrial gases company in operation for over 75 years. The company provides industrial gases and related equipment to dozens of industries, including refining, chemical, metals, electronics, manufacturing, and food and beverage. Air Products is also the world's leading supplier of liquefied natural gas process technology and equipment.
The Company had fiscal 2018 sales of $8.9 billion from operations in 50 countries and has a current market capitalization of about $50 billion. Approximately 16,000 passionate, talented and committed employees from diverse backgrounds are driven by Air Products' higher purpose to create innovative solutions that benefit the environment, enhance sustainability and address the challenges facing customers, communities, and the world. For more information, visit www.airproducts.com.
NOTE: This release may contain forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's reasonable expectations and assumptions as of the date of this release regarding important risk factors. Actual performance and financial results may differ materially from projections and estimates expressed in the forward-looking statements because of many factors not anticipated by management, including risk factors described in the company's Form 10K for its fiscal year ended September 30, 2018.