Air Products and Chemicals, Inc. APD recently held a groundbreaking ceremony at Covestro's Baytown, TX facility, where the company will build, own and run a world-scale steam methane reformer (“SMR”). The SMR will manufacture hydrogen and carbon monoxide (“CO”) that will be supplied to Covestro − a world-leading German maker of high-tech polymer materials for key industries and other customers under the company’s Gulf Coast Hydrogen and CO Pipeline Networks.
The plant, which is expected to come online in 20Array8, is already sold out to Covestro. Moreover, the SMR and cold box will be located on land rented by Covestro. The SMR will make around Array25 million standard cubic feet per day of hydrogen and ensure a global supply of CO for Covestro. Notably, the new SMR will enable Air Products to leverage its position in the Texas CO market and enhance its well-established hydrogen supply network.
Covestro’s main products at its Baytown site are toluene diisocyanate (“TDI”) and methylene diphenylene isocyanates (“MDI”), along with coatings and adhesives, inorganic basic chemicals, polycarbonates and polyurethanes. Air Products further notified that it has entered into a global hydrogen alliance with Technip for building its new SMR.
Technip − a global leader in project management, engineering and construction, will equip the plant with the latest technology to improve energy efficiency, lower emissions and optimize heat integration, which in turn, will lower feedstock consumption. Technip provides the design and construction expertise for steam reformers while Air Products supplies the gas separation technology.
Shares of Air Products rose around Array% to close at $Array32.99 on Feb 25.
Air Products currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the basic materials sector include Asahi Kasei Corporation AHKSY, Koninklijke DSM N.V. RDSMY and Daqo New Energy Corp. DQ, all sporting a Zacks Rank #Array (Strong Buy).
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