Long-term Industrial Gases Supply Agreement and Planned Asset Buyback Represent Another Major Air Products Project Supporting China's Energy Industry
Lehigh Valley, PA /PRNewswire/ - Air Products (NYSE: APD), a world-leading industrial gases company, today announced it has signed an agreement with a subsidiary of Shanxi Jincheng Anthracite Coal Mining Group, China's leading coal mining conglomerate, for the supply of industrial gases to Phase One of Shanxi Jinmei Huayu Coal Chemical Co Ltd.'s (Jinmei Huayu's) coal-to-clean-fuels project in Jincheng City, Shanxi Province.
Previously, Air Products signed a sale of equipment agreement with Jinmei Huayu to supply two air separation units (ASUs)—with a total capacity of over 4,000 tons per day—for this project, which uses coal to produce clean fuels.
Now, Air Products intends to buy back the two ASUs for approximately $100 million and supply industrial gases via pipelines to Jinmei Huayu under a long-term supply agreement, subject to finalization of a buy-back agreement and any government and regulatory approvals. The ASUs are expected to be onstream in mid-2018.
Seifi Ghasemi, Air Products' chairman, president and chief executive officer, and Li Hongshuang, Party secretary and chairman of Shanxi Jincheng Anthracite Coal Mining Group, witnessed the contract signing.
Ghasemi said, "We are delighted to deepen our cooperation with one of China's leading energy groups, Shanxi Jincheng Anthracite Coal Mining, on this significant coal-to-clean energy project. This is another great example of our strategic focus to deploy capital on high-quality industrial gas projects for growth. Our valued customer has entrusted the ASU operation and supply of safe and reliable industrial gases to us. We appreciate their confidence in us and look forward to broader cooperation with the group in future."
Li said, "Air Products is a leading global industrial gases supplier and a most ideal partner for us. This strategic cooperation leverages both parties' advantages and positions us well for further development."
This agreement follows Air Products' recent major investments with Lu'An in Changzhi, Shanxi Province and Yankuang in Yulin, Shaanxi Province to support China's ongoing transformation and upgrade of its coal chemical industry that targets products with higher added-value and sustainability.
About Shanxi Jincheng Anthracite Coal Mining Group
Shanxi Jincheng Anthracite Mining Group Co., Ltd. (Jinmei Group) is an important, high-quality anthracite producer, the largest CBM extraction and utilization group, the largest coal chemical industry group and CMM-fired power group in China, and the most energetic coal mining machinery manufacturing group in Shanxi Province. Currently, Jinmei Group has 68 subsidiaries and 10 branches in 19 provinces, municipalities and autonomous regions, 72 cities and counties. In 2017, it ranked 476th among top global 500 companies and 108th among top China companies. In recent years, basing on the resource advantages of Anthracite and CBM, Jinmei Group has changed the mode of development actively, upgraded industry levels steadily, and built the industrial pattern called "one focus four directions," which takes the coal industry as the fundamental and also develops Coal and CBM Co-mining, Coal and Chemical linkage, Coal electricity integration and Coal equipment manufacturing. It has formed the cross-regional, cross-industrial and cross-trade modern integrated energy enterprise group.
About Air Products in China
Air Products was one of the first multinational industrial gas companies to enter the China market when it set up its first plant in Shenzhen in 1987. Following 30 years of continuous
growth and investment, it has today around 2,700 employees, about 70 entities and more than 140 production facilities in the country, and continues to represent a key growth focus for Air Products. Most recently, the company announced a signed agreement to form a $1.3 billion joint venture, significantly expanding its scope of supply serving Lu'An Mining (Group) Co., Ltd.'s syngas-to-liquids production in Changzhi City, Shanxi Province. It also signed an agreement for a $3.5 billion coal-to-syngas production facility to be built in Yulin City, Shaanxi Province.
About Air Products
Air Products (NYSE: APD) is a world-leading Industrial Gases company in operation for over 75 years. The Company's core industrial gases business provides atmospheric and process gases and related equipment to manufacturing markets, including refining and petrochemical, metals, electronics, 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 2017 sales of $8.2 billion from continuing operations in 50 countries and has a current market capitalization of about $35 billion. Approximately 15,000 passionate, talented and committed employees from a diversity of 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, including finalization of all agreements and regulatory approvals. 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, 2017.
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