Air Products & Debang Group Form Syngas Project JV In China
Zacks Investment Research | Sep 10, 2019 10:00PM ET
Air Products and Chemicals, Inc. (NYSE:APD) recently announced that it has entered into a new joint venture (JV) with Debang Group’s subsidiary — Debang Xinghua Technology Co., Ltd. The JV will build, own and operate a coal-to-syngas processing plant in Xuwei National Petrochemical Park, Lianyungang City, Jiangsu Province, China.
Air Products will own 80% of the JV and Debang Group will own the remaining 20%. The JV will own and operate the air separation unit, purification and gasification assets through a 20-year contract for a fixed monthly fee. It will supply syngas to support Debang Group's 350,000 tons per annum chemicals facilities. The project is slated to come onstream in 2023.
Additionally, Air Products will be the exclusive buyer of merchant liquid products from the JV facility. This will enable the company to establish a strong supply position to serve the high-growth chemical, general manufacturing and opto-electronics industries in the Lianyungang area along with south of Shandong in East China and key surrounding cities north of Jiangsu.
The JV is expected to invest nearly $250 million in the project. Per Air Products, the new project furthers its gasification growth strategy in the Xuwei National Petroleum Park. It will also create new merchant supply capability for the company and enable it to serve a high-density manufacturing base in the region.
Air Products’ shares have rallied 28.6% in the past year against the Original post
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