US-based LNG equipment maker, Air Products has signed an agreement to form a $1.3 billion joint venture with Lu’An Clean Energy Company.
The new JV, to be called Air Products Lu’an (Changzhi) Co., Ltd., will 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 $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 $500 million for a 60 percent ownership in the new JV.
On the other side, Lu’An will get $500 million of cash and will have a 40% ownership in the JV. It will also contribute the gasification and syngas clean-up system.
The new joint venture 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.