Air Products & Chemicals Inc. (APD - Free Report) and Technip recently celebrated the completion of two decades of their alliance - the longest and most productive alliance supplying hydrogen to the global oil and gas industry.
Hydrogen is a critical component in the production of cleaner fuels as it helps eliminate impurities found in crude oil such as sulfur, olefins and aromatics to fulfill the product’s fuel specifications.
Air Products and Technip joined forces in 1992 to capitalize on the shift in the refining industry toward outsourcing and buying hydrogen instead of producing it. Following its success, the agreement between Air Products and Technip was renewed in 2009, extending the relationship beyond 2020.
Technip provides design and construction expertise for steam reformers while Air Products provides the gas separation technology. During the course of their alliance, Air Products and Technip have put up 35 steam methane reformer (SMR) hydrogen production plants encompassing 11 countries. These facilities supply more than two billion standard cubic feet of hydrogen daily to the refining and petrochemical industry.
Throughout the tenure, Air Products and Technip have unrelentingly worked on productivity improvements as well as reducing energy consumption and emissions. One of the notable plant onstream sustainability successes of the alliance is the new hydrogen facility located in Rotterdam, The Netherlands. This facility improved energy efficiency over the previous hydrogen supply by over 15% and also reduced carbon dioxide emissions by over 200,000 tons annually.
The Air Products-Technip alliance is scheduled to bring onstream its largest world-scale capacity SMR in 2014 to meet the increased demand for hydrogen. Located in St. Charles, La., the facility will feature the latest technology advancements to maximize energy efficiency and emissions reduction.
Air Products and Technip have also increased their geographic presence in the emerging markets of China, India and the Middle East. In 2013, the alliance's first SMR in China is due onstream. With an estimated capacity of over 90 million standard cubic feet per day, it will be the first time a state-owned refinery has outsourced its hydrogen refinery requirement.
To celebrate the 20-year milestone of the alliance, Air Products and Technip awarded a total of $200,000 in scholarships to four colleges and universities in regions where the two companies have collaborated to bring onstream world-class projects as well as in new areas.
Air Products currently holds a short-term Zacks Rank #3 (Hold). Other companies in the chemical industry that are worth considering include Axiall Corporation , Eastman Chemical Co. (EMN - Free Report) and Olin Corp. (OLN - Free Report) , which carry Zacks Rank #2 (Buy).