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Air Products to Supply Nitrogen Plants in the Netherlands

Zacks Equity Research

Air Products and Chemicals, Inc. APD inked an industrial gas equipment agreement with N.V. Nederlandse Gasunie. The move is aimed to address the importance of national energy in the Netherlands.

Per the deal, Air Products will supply three generation plants to Gasunie that will produce required nitrogen to condition imported natural gas. The production will adhere to the specification of commercial and consumer applications prevalent in the country.

Moreover, the equipment that will be supplied by Air Products is in line with natural gas extraction issues faced by the Netherlands. Previously, the country used to source natural gas from the domestic Groningen Field. However, the seismic activity stemming from the extraction has triggered the need to switch to imported gas.

Notably, the imported natural gas is incompatible with the applications followed by the domestic Groningen source. Air Products will build and supply necessary solution through a facility that will produce the nitrogen required to condition the imported natural gas. The company will build three plants near Groningen, which will produce a total 180,000 cubic meters per hour of nitrogen after they are brought onstream in October 2021.

The company has vast experience in the natural gas supply chain with its world-leading liquefied natural gas (LNG) technology. Also, majority of LNG across the world is produced with Air Products' technology. It has been operating in the Netherlands for five decades. The company’s world-scale facilities are critical to the country's largest port, Rotterdam. It supports the economic and efficient operation of key manufacturing industries. Moreover, hydrogen supplied from the Rotterdam facilities is also used in the fueling of hydrogen-powered fuel cell electric vehicles.

Shares of Air Products have inched down 1.5% in the past six months compared with the industry’s decline of 20%.

Air Products projects adjusted earnings per share (EPS) of $8.05-$8.30 for fiscal 2019, reflecting a 10% increase at the midpoint year over year. Moreover, it expects adjusted EPS of $1.85-$1.90 for first-quarter fiscal 2019, reflecting a rise of 5% at the midpoint year over year.  

Air Products has the capacity to deploy at least $14 billion in high-return investments in the next four years, which will boost shareholders’ value. Acquisitions and new business deals are also expected to drive results in the near term.

Air Products and Chemicals, Inc. Price and Consensus


Air Products and Chemicals, Inc. Price and Consensus | Air Products and Chemicals, Inc. Quote


Zacks Rank & Stocks to Consider

Air Products currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space are CF Industries Holdings, Inc. CF, The Mosaic Company MOS and Cameco Corporation CCJ, all carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CF Industries has an expected earnings growth rate of 748% for the current year. The company’s shares have inched 1.6% in the past year.

Mosaic has an expected earnings growth rate of 75.2% for the current year. The company’s shares have rallied 17.2% in the past year.

Cameco has an expected earnings growth rate of 66.7% for the current year. Its shares have gained 12% in a year’s time.

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