Air Products and Chemicals Inc. (APD) 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).Read the Full Research Report on BASFY
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