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Leading industrial gas company Air Products and Chemicals Inc. (
- Analyst Report
has achieved another key milestone for its liquefied natural gas (LNG) technology and equipment as it has been chosen for a major off-shore LNG project in Malaysia.
The Pennsylvania-based company has landed an equipment and process license agreement with PETRONAS Floating LNG 1 Ltd., a fully-owned unit of Malaysia’s national oil and gas company Petroliam Nasional Berhad. This marks the second global off-shore floating LNG project contract for Air Products joining a separate project in Western Australia.
Under the pact, the company will supply LNG technology and equipment for the PETRONAS Floating LNG Project 1 (PFLNG 1). Roughly 1.2 million tons of LNG is expected to be produced annually from the PETRONAS LNG Project when it comes online in late 2015.
The news follows Air Products’ announcement last week that it has manufactured the 100th LNG heat exchanger at its Wilkes-Barre facility in Pennsylvania. The milestone unit is slated to be placed for the “Donggi-Senoro” LNG Project in Indonesia in 2014.
Located off the coast of Bintulu, Malaysia, PFLNG 1 will leverage Air Products’ AP-N LNG process and equipment. The AP-N process is the most efficient nitrogen recycle LNG process in the industry and is a perfect fit for small scale floating LNG applications.
The AP-N LNG equipment includes heat exchangers to be made in the Wilkes-Barre facility, compressor-expanders to be assembled in Fogelsville, Pennsylvania, and economizer cold boxes to be manufactured in Malaysia. The equipment will be dispatched from these facilities for assembly and installation on the PFLNG 1 vessel.
The deal builds on Air Products’ long association with PETRONAS. Earlier, the company has supplied its LNG technology and equipment for PETRONAS’ land-based Bintulu facility for LNG trains.
Air Products’ proprietary LNG technology, which is available across 15 nations globally, processes and cryogenically liquefies natural gas for consumer and industrial application. This industry-leading technology has been designed to address the growing energy needs across the globe.
Air Products provides process technology and key equipment to the LNG industry for natural gas liquefaction process as well as small and middle-level LNG facilities. The LNG technology is gaining importance as it meets the increasing global need for cleaner energy.
Most of the LNG manufactured globally leverages Air Products’ technology. The company has shipped its LNG heat exchangers to remote places, including locations in Indonesia, Algeria, Nigeria, Peru, Malaysia, Egypt, Oman, Yemen and Qatar. Air Products has placed more than 80 heat exchangers for LNG projects from its Wilkes-Barre plant over the last 40 years.
We currently have a long-term Neutral recommendation on Air Products. The company, which competes with Praxair Inc. ( PX - Analyst Report ) , holds a short-term Zacks #3 Rank (Hold).
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