Air Products and Chemicals Inc (APD) has signed an agreement to form a $1.3 billion joint venture (JV) with Lu’An Clean Energy Company. This will significantly expand Air Products’ scope of supply serving Lu’An Mining (Group) Co, Ltd’s syngas-to-liquids production in Changzhi City, Shanxi Province, China.
Air Products has already invested $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 $500 million for a 60 percent ownership in the new JV.
With this majority position, Air Products will fully consolidate the JV financial results. Lu’An will contribute the gasification and syngas cleanup system, will receive $500 million of cash and will have a 40 percent ownership in the new JV.
The new joint venture, 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 as soon as possible, pending initial operational start-up and government and regulatory approvals.
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