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Air Products Halts Louisiana Clean Energy Project, Advances Yara Ammonia Deal

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Air Products and Chemicals (APD) said Tuesday it will exit its Louisiana Clean Energy Complex, take up to a $2.9 billion pre-tax charge and move ahead with a renewable ammonia agreement involving Yara International.

Air Products decided to stop developing the Louisiana project after determining that the expected returns no longer satisfied its investment criteria.

It said the decision will not affect its broader Louisiana operations, where it runs 18 industrial gas facilities and the world's largest hydrogen pipeline network serving refineries along the US Gulf Coast.

The company expects to recognize pre-tax charges of up to $2.9 billion, equivalent to roughly $2.2 billion after tax, during its fiscal third quarter. Asset impairments and costs tied to ending contractual commitments will account for most of the charge.

Air Products also decided to halt construction of its zero-carbon liquid hydrogen plant in Casa Grande, Arizona, together with several smaller clean energy distribution initiatives.

The company cited weaker commercial prospects, project economics and slower adoption of hydrogen for mobility as key factors behind the move.

The company plans to redirect equipment and other assets to existing or future projects wherever possible while reducing liabilities under current commercial agreements. The company said it will disclose additional financial details when it reports Q3 earnings.

Air Products is completing a marketing and distribution agreement with Yara International covering renewable ammonia from the NEOM Green Hydrogen Project in Saudi Arabia, it added.

The Louisiana project decision does not affect the Yara agreement. Under the arrangement, Yara will use its global logistics and marketing network to distribute renewable ammonia produced by the NEOM project to customers worldwide, Air Products said.

Price: $295.37, Change: $+24.02, Percent Change: +8.85%

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