MOSCOW (MRC) -- Air Products has reached an agreement with PBF Energy Inc. that include the acquisition of USD530 million of five hydrogen steam methane reformers (SMR) hydrogen production plants and the long-term supply of hydrogen to PBF refiners from those already operating plants, according to Kemicalinfo.
Located in Torrance and Martinez, California and Delaware City, the SMRs have a combined production capacity of nearly 300 million standard cubic feet per day.
The deal is expected to close during the third quarter of 2020 fiscal year.
"This puts us in an outstanding financial position to execute our strategy of investing in long-term onsite deals, which includes asset acquisitions like the one we are announcing today. With this acquisition, not only do we gain five SMR plants, but we also secure a long-term hydrogen sale of gas agreement with an existing customer who is one of the largest independent refiners in North America," said Seifi Ghasemi, Chairman, President and Chief Executive Officer at Air Products.
Air Products is known as a leader in the supply of hydrogen to refineries in order to make cleaner burning transportation fuels.
The company also operates one of the most successful carbon capture projects in the world in Port Arthur, Texas, where the captured carbon dioxide (CO2) is injected into the ground and used for enhanced oil recovery in the state. Since 2013, Air Products has captured nearly 10 million tons of CO2 at Port Arthur that has been put to beneficial use.
Air Products currently operates 12 industrial gas facilities in California, which includes five hydrogen production plants.
The SMR being purchased in Delaware City would be Air Products’ first major asset operating in Delaware.
As MRC wrote before, US refiner PBF Energy has completed its acquisition of Shell’s 157,000 bbl/day Martinez refinery near San Francisco, California. The USD1bn deal, agreed in June 2019, was completed effective 1 February 2020.
Besides, in late March 2020, PBF Energy Inc said it was operating its refineries at minimum rates, with throughput about 30% lower than the refiner’s expectations, as coronavirus-driven travel curbs hit fuel demand.
We also remind that Shell Singapore restarted its naphtha cracker in Bukom Island in early December 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 215,390 tonnes in the first month of 2020, up by 23% year on year. Shipments of all grades of high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) increased due to higher capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 127,240 tonnes in January 2020, up by 33% year on year. ZapSibNeftekhim's homopolymer PP accounted for the main increase in shipments.
MRC