Air Products and Lu’An Clean Energy Company Form Joint Venture

On September 10, Air Products announced it has signed an agreement to form a US$1.3 billion joint venture (JV) with Lu’An Clean Energy Company, which 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 US$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 US$500 million for a 60% 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 clean-up system, receive US$500 million of cash and have a 40% 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.