Air Products & Chemicals Inc. (APD) recently inked an agreement to supply two sets of its patent LNG technology along with its necessary apparatus and the process license to Freeport LNG for its liquefaction and export projects. Air Products will supply two of its main cryogenic coil wound heat exchangers with the LNG C3MR liquefaction technology and equipments for the LNG export terminal. The heat exchangers will be installed at the centre of the patent propane pre-cooled mixed refrigerant liquefaction process.
Air Product’s shares rose 2.6% in the trading session following the announcement. The stock is up around 19% so far this year.
According to Air Products, these heat exchangers were the first of their kind to operate in the U.S. market and the company plans to expand its reach further.
Along with Freeport, Air Products will be supplying its set of LNG technology to Dominion's liquefaction project at its Cove Point LNG facility at Lusby, MD. The LNG technology makes underground natural gases accessible by liquefying it. It is transported at low costs around the world and can be turned back to a gaseous form during its use.
Air Products’ LNG technology, operating in 15 nations, has helped the world to cope with the increasing demand for clean energy by processing and liquefying natural valuable gases for industrial and consumer use. It has become one of the major global suppliers of LNG.
Over the last four decades, Air Products has produced, designed and exported more than 100 coil wound heat exchangers. Moreover, in Jan 2014, the company started a second LNG manufacturing unit in Port Manatee, FL, doubling its production capacity. The company also offers its technology to large export plants, small and mid-sized LNG plants, floating LNG plants as well as LNG peak shavers.
Air Products expects its strategic actions, including productivity improvement, better asset utilization, disciplined project execution and cost management initiatives to drive earnings growth in fiscal 2014. Moreover, it remains committed to maximizing its shareholder return. The company anticipates stronger momentum in the second half of the year.
Air Products currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the chemical space worth considering include LyondellBasell Industries NV (LYB), Valhi, Inc. (VHI) and PPG Industries Inc. (PPG). While LyondellBasell sports a Zacks Rank #1 (Strong Buy), Valhi and PPG carry a Zacks Rank #2 (Buy).
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