Back to top

Image: Bigstock

Air Products (APD) to Buy Uzbekistan Gas-to-Syngas Plant for $1B

Read MoreHide Full Article

Air Products and Chemicals, Inc. (APD - Free Report) recently announced a $1 billion investment deal with the Government of the Republic of Uzbekistan and Uzbekneftegaz JSC ("UNG") to acquire, own and manage a natural gas-to-syngas processing facility in Qashqadaryo Province, Uzbekistan.

The state-owned energy company UNG’s multibillion-dollar gas-to-liquid (GTL) facility is one of the most cutting-edge energy plants in the world. It includes a natural gas-to-syngas industrial complex that converts natural gas into synthetic fuels with a high added value for domestic use and possibly export.

Air Products will purchase, own and operate two large-scale air separation units, two large-scale auto-thermal reforming units and a hydrogen production unit within the Uzbekistan GTL complex under the terms of the purchase agreement, which is fully aligned with Air Products' leading on-site business model. Air Products will additionally provide oxygen, nitrogen, hydrogen and syngas to UNG under a long-term, take-or-pay/fixed fee contract. The natural gas and utilities besides all product offtake will be provided by UNG.

The company will use its best-in-class operational and supply expertise for this strategic acquisition in Uzbekistan, a country with a high pace of economic growth and strong government support. The Republic will be able to meet its expanding energy production and societal needs by leveraging UNG's seamless manufacturing of low-cost, high-purity fuels. APD is optimistic about the potential opportunities in Uzbekistan and the Central Asian area and looks forward to capitalizing on this long-term, sustainable collaboration.

Shares of APD have gained 9.2% over the past year against 13.9% decline of its industry.

Zacks Investment Research
Image Source: Zacks Investment Research

Air Products expects full-year fiscal 2023 adjusted earnings per share of $11.30-$11.50, indicating 10-12% year-over-year growth. For the third quarter of fiscal 2023, the company expects adjusted earnings per share in the range of $2.85-$2.95, suggesting a rise of 10-14% from the year-ago quarter.

Zacks Rank & Key Picks

Air Products currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks to consider in the basic materials space include Koppers Holdings Inc. (KOP - Free Report) , AngloGold Ashanti Limited (AU - Free Report) and Linde plc (LIN - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Koppers currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for current-year earnings for KOP is currently pegged at $4.40, implying year-over-year growth of 6.3%. It has a trailing four-quarter earnings surprise of roughly 13.64%, on average. KOP has gained around 10.8% in a year.

AngloGold Ashanti currently carries a Zacks Rank #1. The Zacks Consensus Estimate for AU’s current-year earnings has been revised 22% upward in the past 60 days. The consensus estimate for current-year earnings for AU is currently pegged at $1.94, suggesting year-over-year growth of 50.4%. AngloGold Ashanti’s shares have surged roughly 31.8% in the past year.

Linde currently carries a Zacks Rank #2. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 3.8% upward in the past 60 days. Linde beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 6.9% on average. LIN’s shares have gained roughly 8% in the past year.


Published in