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Industrial gas giant Air Products & Chemicals Inc. (APD - Analyst Report) has received an LNG heat exchanger order from Malaysian integrated oil and gas company Petroliam Nasional Berhad (PETRONAS) for a major LNG Train 9 project at the Bintulu facility in Malaysia. As per the deal, Air Products’ SplitMR liquefaction process and technology will be supplied to the PETRONAS LNG Train 9 Project.

The PETRONAS LNG Train 9 Project is an extension of an already existing PETRONAS LNG Complex in Bintulu, Sarawak, Malaysia. The project is expected to produce 3.6 million tons per year (MTPY) of LNG. The company targets to start its operations by end of 2015.

The collaboration between Air Products and PETRONAS dates back to 1983 with PETRONAS first train becoming operational. The collaboration continued for 20 years where Air Products’ has provided multiple LNG trains, technology and equipment to PETRONAS.   

In total, Air Products' LNG technology and equipment is used in PETRONAS’s eight existing production trains designed to produce 25.7 MTPY of LNG. LNG production is expected to be 29.3 MTPY with the addition of the ninth train incorporated with Air Products involvement at the Bintulu facility by the end of 2015.

Air Products' LNG heat exchanger order represents the second order coming in a year from PETRONAS. This first order one was for an AP-N LNG process for PETRONAS' Floating LNG Project 1 (PFLNG 1) in Jul 2012.

The AP-N LNG process used will be the most efficient of all nitrogen recycle LNG processes in the LNG industry as it can be ideally suited for FLNG applications. PFLNG 1 is a floating LNG production platform that will operate 180 kilometers off the coast of Malaysia. This project is anticipated to produce 1.2 million tons per year of LNG when it is operational in late 2015.

When both the new projects are operational at PETRONAS’ two operated locations, Air Products’ technology and equipment will play an integral part in the production of an additional 4.8 MTPY of LNG in Malaysia.

Air Products currently holds a short-term Zacks Rank #3 (Hold).

Other companies in the chemical industry that are worth considering include Eastman Chemical Co. (EMN - Analyst Report), Olin Corp. (OLN - Snapshot Report) and LyondellBasell Industries NV (LYB - Analyst Report). All of them carry a Zacks Rank #2 (Buy).
 

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