04 February 2003, PR Newswire
LEHIGH VALLEY, Pa. Speaking yesterday at the Lehman Brothers Industrial Select Conference (South Beach, Fla.) about growth opportunities in refinery hydrogen and energy solutions, Scott Sherman, vice president and general manager, Chemical and Process Industries and Energy Systems for Air Products (NYSE: APD), said that three major trends in the energy sector are presenting significant opportunities for the company.
"In the near term, there is a high growth market for supplying high-purity hydrogen to help U.S. and European refiners meet increasingly strict environmental legislation to produce cleaner transportation fuels from heavier feedstocks," Mr. Sherman said. "In the near to medium term, there are opportunities to help recover large volumes of stranded natural gas in very remote locations. And in the longer term, with the ongoing drive to create clean power, we expect there will be an increasing demand for hydrogen for fuel cell energy and for large quantities of oxygen needed to gasify coal for producing clean electricity."
First discussing the large and growing market for hydrogen, Mr. Sherman said that Air Products supplies more than 1.1 billion standard cubic feet of product globally, with over 80 percent of that capacity distributed to customers via pipelines. "As refineries process more heavy and sour crude, deal with increasingly stringent environmental legislation and continue to make more high-value products, we are well positioned to serve their growing hydrogen capacity requirements," he said.
He noted that about 90 percent of the market growth is in the U.S. and Europe, and that the company's major pipeline franchises in the Texas and Louisiana Gulf Coasts, California and Rotterdam will be key to Air Products' supply reliability. "Our recently- awarded long-term hydrogen supply agreement to serve ConocoPhillips and another local refiner in Lake Charles, Louisiana is a good example of the value we bring in helping our customers stay ahead of their processing challenges," he said.
In the near to middle term, Air Products also has significant opportunities to participate in the recovery of large volumes of stranded natural gas. "Once recovered, the natural gas can either be liquefied and transported via liquid natural gas (LNG) heat exchangers or converted into methanol or diesel fuel," Mr. Sherman said. He noted that Air Products is the world's leading supplier of LNG heat exchangers, designing, manufacturing and exporting more than 60 LNG units from its Wilkes-Barre, Pa. manufacturing facility over the past 30 years. "And for converting recovered natural gas into methanol or diesel fuel, large volumes of oxygen and synthesis gas are required, typically 3,000 to 4,000 tons-per-day per train. The project we announced last year to supply Atlas in the Caribbean Republic of Trinidad and Tobago employs this technology," he said.
Finally, Mr. Sherman noted that over the next decade, he expects hydrogen fuel cells to become an increasingly important part of energy infrastructure in industrial distributed power, small portable devices, domestic power and transportation. "As the world's leading industrial hydrogen supplier, we want to play an active leadership role in the emerging field of hydrogen energy to achieve significant commercial opportunities in the future," Mr. Sherman said.
As an example, he highlighted the company's partnership project with the United States Department of Energy, Plug Power, Inc. and the City of Las Vegas in starting-up the world's first hydrogen energy station featuring the co- production of hydrogen fuel and electric power.
During his presentation, Mr. Sherman also referenced coal gasification as another viable clean energy source for the future. "Large oxygen volumes are required for this process, and we look forward to being an important player in meeting the growing demand for cost-effective, environmentally sound electricity."
Air Products' Refinery Hydrogen and Energy Solutions business is one of its four growth platforms, along with Electronics, Healthcare and Performance Materials. In presenting at Lehman Brothers Industrial Select Conference, Mr. Sherman was joined by senior management from more than 30 companies in the aerospace and defense, automotive, capital goods, chemicals, containers and packaging, electrical equipment, environmental services and multi-industry categories. To access the audio Webcast replay, go to Air Products' Investor Relations site: .
Air Products and Chemicals, Inc. is the world's only combined gases and chemicals company. Founded more than 60 years ago, the company has revenues of $5.5 billion and operations in 30 countries. Air Products is a market leader in the global electronics and chemical processing industries, and a longstanding innovator in many industrial markets, including coatings, adhesives and polyurethanes. The company distinguishes itself through its 17,500 employees around the world, who build lasting relationships with their customers and communities based on understanding, integrity and passion.