Air Products has announced that it has signed an agreement to form a US$1.3 billion joint venture (JV) with Lu'An Clean Energy Co.
Air Products believes that the deal will expand its scope of supply serving Lu'An Mining (Group) Co., Ltd's syngas-to-liquids production in Changzhi City, Shanxi Province, China.
The company has previously invested US$300 million to build, own and operate four large air separation units (ASUs) to supply the Changzhi City site. Under the new agreement, Air Products will contribute the ASUs and invest a further US$500 million for a 60% ownership in the new JV.
Lu'An will contribute the gasification and syngas clean-up system, will receive US$500 million of cash and will have a 40% ownership in the new JV.
The new JV, to be called Air Products Lu'an (Changzhi) Co. Ltd, will own and operate the ASUs and gasification and syngas clean-up system. The JV will receive coal, steam and power from Lu'An and will supply syngas to Lu'An under a long-term, onsite contract. Closing is expected soon, pending initial operational start-up and government and regulatory approvals.
Seifi Ghasemi, Chairman, President and Chief Executive Officer of Air Products, said: "We are delighted to have Lu'An, a leading clean energy company in China, as our joint venture partner. The creation of this world-class JV is perfectly in line with our stated strategy of deploying our significant cash to grow by acquiring existing assets and expanding our scope of supply to include syngas."
Li Jinping, Chairman of Lu'An, added: "Extending our strong partnership/relationship with Air Products through this new joint venture enables us to take advantage of world-leading project management and operational expertise to deliver syngas for this landmark energy project."
The agreement is subject to government and regulatory approval.
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/11092017/air-products-and-luan-to-form-jv/