gasworld Yearbook 2018/19 Sample

NEWS HIGHLIGHTS – AMERICAS

Largest helium facility set to be launched in Canada JANUARY/FEBRUARY

The Weil Group Canada, a subsidiary of Weil Group Resources headquartered in Richmond, Virginia, will soon be launching the first ever helium liquefaction facility in Canada.

The explorative company which sets out to seek, develop and produce untapped energy, has identified nearly two billion cubic feet of proven reserves of helium and is moving to commission a central helium liquefaction facility called

the CryoHub™ in the city of Medicine Hat, Alberta as soon as within the next 20 months.

The company has been in discussion with officials from Medicine Hat, to locate its new CryoHub facility in the city and

to develop helium resources in the region. The proposed facility would be a central hub to receive helium production from the company’s other current projects which are located in Alberta and Saskatchewan.

Weil was the first company in 60 years to bring commercial grade helium on-stream in Canada when it began operations in its Mankota, Saskatchewan helium purification facility in early 2016. Weil has been active in Canada since 2012 and has

continued extensive exploration and development in search of the increasingly rare element.

The global helium business is seldom far from the next fear of shortage, such is its fragile (sourcing) nature, and one of the worlds biggest resources, the BLM-operated Federal Helium Reserve, is on a countdown to closure.

RELATED ARTICLES

2017 global helium market Market report gasworld.com/2013724.article

Air Liquide opens unique new CO2 plant in Canada APRIL

Air Liquide Canada has officially inaugurated its new carbon dioxide (CO2) recovery plant in Johnstown, Ontario.

This unique plant is the only one in Canada with a Health Canada drug establishment license authorising the fabrication, testing, packaging and labelling of medical grade CO2 in accordance with the requirements of the Canadian Food and Drugs Act, as well as the Good Manufacturing Practices (GMP) requirements of the Canadian Food and Drug Regulations.

Boasting a 300+ tonnes per day (tpd) capacity no less, this latest addition to Air Liquide’s facilities in Canada is now in full operational mode and delivers premium CO2 product that is also FSSC (Food Safety System Certification) and NSF (National Sanitation Foundation) certified.

“With its state-of-the-art design and latest technology, the 170,000 sq ft facility 08 gasworld Yearbook • 2018/19

© Air Liquide

“With its state-of-the-art design and technology, the 170,000 sq ft facility enables us to capture the raw CO2 waste feed from Greenfield, leading Canadian ethanol supplier, and transform it into liquefied CO2 gas” enables us to capture the raw CO2 waste feed from Greenfield, leading Canadian ethanol supplier, and transform it (thus preserving the environment) into liquefied CO2 gas, which is then delivered to Air Liquide Central Canada customers who will use it mainly in the

food, water treatment and manufacturing industries,” explained Bertrand Masselot, President and CEO of Air Liquide in Canada, at the ribbon-cutting ceremony (pictured above).

Ross Fuller, Vice-President of Process Industries, added,

“After just four months of tests, audits and certifications, the results are astonishing: major industrial customers in Quebec and Ontario benefit from a nearby high quality gas supply source and Air Liquide makes a significant contribution to the local economy.” gasworld.com/northamerica

NEWS HIGHLIGHTS

Airgas to build new ASU in North Carolina JANUARY/FEBRUARY

Airgas USA, LLC, an Air Liquide company, has revealed its plans to build a new air separation unit (ASU) in North Carolina. gasworld reported back in August 2017 that the company was considering building an ASU, large storage facility, and also a distribution terminal in Mebane, North Carolina.

As part of a presentation to the Alamance County Board of Commissioners, Airgas discussed the plans and told the board it sees North Carolina as a growing market and it has no similar facilities in the state.

The company has now confirmed the plans and expects the facility, which will produce oxygen, nitrogen

and argon for use in customer applications such as metal fabrication, blanketing and purging, combustion, chilling and freezing, to be on-stream in 2019. In addition, the ASU will produce medical grade oxygen to supply to hospitals, nursing homes and research laboratories as well as food and pharmaceutical grade nitrogen.

The ASU will support the region’s bulk gas market and enhance the company’s gas supply chain, to help ensure long-term reliability of supply for its merchant, packaged and on-site gas customers.

Airgas CEO and Air Liquide Executive Committee VicePresident, Pascal Vinet, said Airgas is continuing to expand its gas production

© Airgas

“We look forward to working closely with the Mebane community and the state of North Carolina...” and distribution capabilities throughout the US, adding, “Airgas looks forward to meeting the growing needs of gas customers in the thriving North

Carolina market and throughout the region. We look forward to working closely with the Mebane community and the state of North Carolina to bring new opportunities and growth for many years to come.”

RELATED ARTICLES

2018 air gases market report Steady business Page 46

Chart in LNG regasification first in Mexico MARCH

Chart’s latest compact LNG regasification station is fully operational on-site in Mexico – a first for the country.

Located around 45 minutes away from Queretaro, the site lacked connection to the pipeline grid, hence the LNG satellite station is a perfect solution enabling a local business to use green and economical natural gas for power, instead of more expensive and polluting LPG, in its greenhouse operations.

The regasification station mimics the familiar fuelling model of diesel, propane and other LPGs, whereby an external provider delivers the liquid fuel via truck for storage on-site in a horizontal tank.

Chart’s complete system then vaporizes the LNG to supply gasworld.com/northamerica

“Located around 45 minutes away from Queretaro, the site lacked connection to the pipeline grid, hence the LNG satellite station is a perfect solution...”

© Chart

the end-user with natural gas at the point of use, exactly as if it was connected to the pipeline grid.

The station was supplied as a skid mounted, fully factory assembled and tested package.

This meant minimal ground

preparation, civil work, single truck transport, crane lift, installation and commissioning was completed within two days.

Full automation with Bluetooth monitoring and controls complete the picture for the seamless transition to natural gas.

MORE INFORMATION

AOC Mexico celebrates 25 years of business gasworld.com/2015189.article 2018/19 • gasworld Yearbook 09

M&A ZONE

SPECIAL FEATURE – M&A

A new leader crowned Praxair-Linde complete $90bn merger of equals

By Rob Cockerill, Global Managing Editor

I

t’s official: Praxair, Inc. and The Linde Group have completed their $90bn merger of equals, creating the single biggest player in the global industrial gases business.

Linde and Praxair announced the closure of their Business Combination following long-awaited approval from the US Federal Trade Commission (FTC) and European Commission approval of the buyer of Praxair’s divested businesses in Europe. FTC approval had essentially been the final piece in the merger’s jigsaw.

The combined entity will become a global industrial gas leader, generating 2017 pro forma revenues of approximately $27bn, a market capitalisation of approximately $90bn (€78bn), and over 80,000 employees across more than 100 countries – serving over two million customers.

Steve Angel, Praxair’s Chairman and CEO, who also becomes CEO of the new holding company, enthused, “Today marks an

important milestone in the formation of our new company.”

“It is a privilege for me to lead the talented people of two world-class organisations as we come together to form the undisputed leader in our industry. I am confident this team will create long-term value for all Linde plc stakeholders.”

Echoing those sentiments, current Chairman of the Supervisory Board of Linde AG, Professor Dr. Wolfgang Reitzle, who will now become Chairman of the new company’s Board, added, “The merger of Linde and Praxair is a compelling and transformative combination and an unparalleled opportunity for the customers, shareholders and employees of our combined company.”

“I wish to thank the employees of Linde and Praxair for their efforts in making this merger possible.”

The deal changes the face of the industry for the second time in as many years,

Praxair-Linde Merger Timeline Source: gasworld

7th December 2016 Talks resume: Linde CEO Mr Büchele departs, Prof. Dr. Aldo Belloni returns as CEO

29th November 2017 Final exchange offer results for Linde AG – 92% shareholders tender

2017 20th December 2016 Agreement in principle announced 12th September 2016 Talks terminate over lack of mutual understanding

34 gasworld Yearbook • 2018/19

27th September 2017 Praxair shareholder approval – 83% of total shares approve combination 1st June 2017 Confirmation of definitive agreement – a $70bn merger of equals

30th November Praxair moves to revive talks

2016

August 2016 Reports break of merger talks

following Air Liquide’s mega acquisition of fellow Tier One company Airgas, Inc. in 2016. Air Liquide became the leading player in the North American market, while complementing global leadership positions in Europe, Africa/Middle East and the AsiaPacific region when it completed the $13.4bn takeover of Airgas on 23rd May 2016.

The $90bn merger of Praxair and Linde, however, creates a combined entity that usurps Air Liquide as the leading force in the global gases business. gasworld Business Intelligence had previously estimated a combined market share of 33%, pre-divestment.

Based on 2017 reported results, the combination will create a company with pro forma revenues of approximately $27bn, and a market capitalisation of approximately $90bn. The combined company is set to enjoy strong positions in all key geographies and end markets, and create a more diverse and balanced global portfolio, while approximately

14th October 2017 Regional antitrust approvals begin to come in 14th August 2017 Registration of Linde plc effective with US SEC

M&A

Closing the transaction The Business Combination underwent the final stages of the shareholder process over the seven days following the news of its completion, with the transaction officially closing on 31st October 2018.

The closing process occured in two steps.

Firstly, there was the settlement of the Linde plc exchange offer to Linde AG shareholders,

“The merger of Linde and Praxair is a compelling and transformative combination...” which had been accepted for approximately 92% of Linde AG’s outstanding shares. Linde AG tendered shares ceased trading at the close of the Frankfurt Stock Exchange on Friday 26th October 2018, with Linde plc share commencing trade on the Frankfurt Stock Exchange under the stock ticker symbol ’LIN’ on Monday 29th October 2018.

Concurrent to the delisting of Linde AG tendered shares, the stock ticker symbol for Linde AG shares that had not accepted the exchange offer changed to ’LNA’ and continue to be listed on the Frankfurt Stock Exchange.

Shares of Praxair, meanwhile, ceased trading at the close of the New York Stock Exchange (NYSE) on Tuesday 30th October 2018 and trading in Linde plc shares commenced on the New York Stock Exchange on 31st October 2018 under the stock ticker symbol ‘LIN’.

As part of the business combination agreement, Praxair shareholders will receive one share of Linde plc for each Praxair share they hold. Linde AG shareholders who

22nd August 2018 Linde confirm divestments will exceed threshold after FTC asks for more sales

Full circle The merger also marks something of an entangled history between Praxair and Linde going full circle.

The roots to this date back to World War I when Linde AG was forced to exit the US gases market – having entered in the early 1890s. Following the war, Linde assets were confiscated and sold to Union Carbide in 1919 – which included the rights to use the Linde name in the US. Since 1963, the industrial gases arm of Union Carbide was known as ‘the Linde division’.

In 1992, when Union Carbide decided to spin-off the gases division, the company that we know today as Praxair was formed.

Meanwhile, it was only in 1998 that The Linde Group bought back the licence to use the Linde name again in the US. gw

28th October 2018 Linde plc shares commence trading on Frankfurt Stock Exchange

22nd October 2018 FTC approval received; European Commission approval of European buyer’s approval received; merger completion imminent

2018

16th July 2018 Linde announces MesserCVC consortium to acquire Linde assets in US, Brazil, Canada and Colombia

accepted the exchange offer will receive 1.54 shares of Linde plc for each Linde AG share tendered. Fractional shares will be aggregated and sold in accordance with the terms of the exchange offer document and the business combination agreement. Shareholders with fractional shares will receive cash in an amount representing such holder’s proportionate interest in the net proceeds from the sale.

February 2018 5th July 2018 26th October 2018 EU opens Praxair announces Linde AG shares cease investigations proposed sale of majority trading on Frankfurt in merger of European businesses Stock Exchange to TNSC th 20 August 2018 European Commission approval (conditional) received

30th October 2018 Praxair shares cease trading on New York Stock Exchange (NYSE)

2019

$1.2bn (€1.1bn) in annual synergies are to be achieved over the next three years, driven by scale benefits, cost savings and efficiency improvements.

The new holding company will be listed on both the New York Stock Exchange (NYSE) and the Frankfurt Stock Exchange. Likewise, membership in the management board of the combined company will be split 50:50 between Linde and Praxair, with current Praxair Chairman and CEO Steve Angel becoming CEO of the new holding company.

The new holding company will be incorporated in Ireland while its principal governance activities, including board meetings, will primarily be based in the UK. Corporate functions will be split between Danbury, Connecticut and Munich, Germany accordingly, to help achieve efficiencies for the combined company.

31st October 2018 Linde plc shares commence trading on New York Stock Exchange (NYSE)

2018/19 • gasworld Yearbook 35

CO2 ZONE

SPECIAL FEATURE – M&A

The CO2 paradox

Plenty in the atmosphere, but not enough in our beer?

By Rob Cockerill

I

t’s almost an annual occurrence, but this summer it became more evident than ever before. The CO2 paradox: plenty of it in the atmosphere, and yet not enough of it to carbonate our beer.

Due to its role as a greenhouse gas (GHG), and arguably the most renowned GHG of all in the public domain, carbon dioxide (CO2) not only gets a bad press but is also perceived to be present in our atmosphere in huge volumes. This is not strictly true. Though it is the gas with by far the highest levels of emissions by volume, CO2 is technically not the worst offender of all the GHG’s; it is in fact 22,800 times less harmful than sulfur hexafluoride, and 300 times less harmful

52 gasworld Yearbook • 2018/19

22,800

CO2 is in fact 22,800 times less harmful than sulfur hexafluoride

than nitrous oxide.

There is also less understanding of the differences between CO2 as a GHG and its concentration in the atmosphere, which are two very different things. Despite the widespread perception, the level of CO2 in the atmosphere is actually very minimal – it can be pegged at around 500 parts-per-million (ppm), which is less than 0.05%. And there’s good reason to be thankful for that – levels anywhere near 1-2% would present an intoxication hazard to us all.

So when a CO2 supply crisis erupted in Europe and Mexico this summer, the idea that it was available in abundance all

around us was largely unfounded.

Nonetheless, there is a certain sense of paradox that exists, and here’s why.

The shortage – tight supply in some regions CO2 is apparently all around us, and yet gasworld unexpectedly ended up leading mainstream media coverage when it broke news of a European CO2 shortage in June.

The ultimate reason for this was – and is – an inherently fragile supply chain.

The region’s CO2 supply position had tightened in April, driven by the usual turnaround of maintenance procedures in ammonia plants, but this position became critical when other plants associated with

gasworld.com/specialfeatures

CO2 SHORTAGE

bio-ethanol and chemical production were also shut down for maintenance or other technical issues. Ammonia plants have traditionally been one of the largest sources of food-grade CO2 in Europe and while in the past decade other sources of CO2 have been invested in, including those raw gas streams from chemical operations and bio-ethanol plants, ammonia still remains one of the largest sources – especially in Western Europe. Major ammonia plants exist in the UK, Norway, the Netherlands and France.

However, this is very much a seasonal feedstock and leaves Europe, which is more vulnerable to this source than other regions around the world, at annual risk of supply chain challenges; ammonia is used in fertiliser production and the peak production output for fertilisers is generally from August to March or winter months.

Fertiliser companies then plan maintenance or shutdowns in April through to June on a regular basis – but this is coincidently the peak time for production of soft and alcoholic drinks.

What compounded the situation this year was not only the timing of all the maintenance procedures, but that ammonia market prices had fallen to a low and imports are available from outside of Western Europe, leading to European producers prolonging the downtime of the ammonia plants within the region. The margins in the ammonia business had not been particularly attractive either, due to the higher pricing of natural gas – a major raw material for ammonia production.

What we experienced, therefore, was a perfect storm of supply chain conditions that were largely beyond the control of the CO2 business itself and created a lack of raw gas sourcing for CO2. This was further compounded by the extreme heatwave that hit Northern Europe in May – creating an unprecedented demand for CO2 from the food & beverage sector.

It was described as the “worst supply situation to hit the European CO2 business

in decades” and left many consumers of CO2 desperate for supplies of the product. All major suppliers of liquid CO2 were affected by the raw gas sourcing issues – including Praxair, Messer, Linde and Air Liquide. Even ACP (recently acquired by Air Products) had been impacted by the downturn in CO2 output.

It appeared that most of Northern and Continental Europe were struggling for product at that time, which only worsened when two large and important plants went offline. Additional planned maintenance shutdowns then occurred in bio-ethanol plants, while one major source in Scandinavia also went offline. The UK market appeared the hardest hit at the peak of the shortage, with only one major CO2 plant operating at one point. Very reliant on imports from Scandinavia and also the Netherlands, the UK was doubly impacted in that there were limited movements across the Channel due to plant shutdowns in the Benelux and France limiting product to ship.

The story saw CO2 hit the headlines like never before, and drew sharp attention not only to its array of applications in industry and everyday life, but also to the need for greater supply chain diversification. It demonstrated the perceived paradox and lack of understanding for the gas’ role in GHG emissions, too.

Within just 48 hours of the story breaking in Europe, gasworld also went on to reveal that Mexico had become the latest country to be affected by a CO2 shortage. The problem was also described as ‘significant’ and in part borne out of similar issues being experienced in Europe – a problem with the ammonia plants and production reliability – which is the main source of CO2 in Mexico. However, the difference there is the cost and reliability of natural gas supplies to the ammonia plants.

Diversification If this summer’s shortages did nothing else, they perhaps created a very public platform for calls for greater investment in CO2

“A relatively nascent CO2 recovery market does exist, but we are still scratching the surface in this area...” recovery – as evidenced over the coming pages of this month’s edition.

A relatively nascent CO2 recovery market does already exist, but we are still scratching the surface in this area and what the technology might be capable of, with evolution expected in terms of cost and capacity (see interview with TPI, page 40).

And such CO2 recovery systems generally need the right kind of waste gas stream (or the right conditions for that stream) to make recovery feasible.

Another alternative is Direct Air Capture (DAC) technology, which Switzerlandbased company Climeworks has pioneered and launched, featuring a patented technology that filters CO2 from ambient air. In comparison to other carbon capture technologies, a modular Climeworks plant can be employed almost anywhere and is capable of capturing CO2 from ambient air wherever atmospheric air is available and the gas is needed (see Direct Air Capture: A solution in self-sufficiency? Page 42).

Herein lies the paradox. Though public perceptions of CO2 in the atmosphere are not strictly true, it is available to be recovered from waste gas streams and companies like Climeworks believe it’s ‘an inevitable truth’ that there is now so much CO2 in the atmosphere that the only way to limit global warming to save levels is by sucking it out of the air and not only undo our past emissions, but diversify the supply chain to ensure there is enough of the gas in our food and beverages. gw

PUBLICATION DATE Originally published in the October 2018 edition of gasworld magazine.

2018/19 • gasworld Yearbook 53

HELIUM ZONE

SPECIAL FEATURE – HELIUM HEATMAP

The helium heatmap: revisited gasworld explores where’s hot and getting hotter in the evolving global helium heatmap As we enter the New Year, the helium business continues to find itself in a state of equilibrium, if not over-supply at times. How long for, is a perennial question. Here, gasworld looks at some of the notable helium plants and some of those that may just be warming up.

SW Saskatchewan/SE Alberta, Canada Weil Group’s Mankota, SK plant producing 40 MMCF/ yr of helium gas since June 2016. Weil recently announced its intention to build a 150 MMCF/ yr helium liquefier in Medicine Hat, Alberta, with a handful of other companies engaged in helium exploration.

Doe Canyon, Colorado Shute Creek, Wyoming ExxonMobil operates the world’s largest helium plant in Shute Creek, Wyoming (US), producing 1,450 million standard cubic feet per year of helium.

On-stream in 2015, Air Products’ Doe Canyon facility in Colorado was the first-ever example of helium extraction from a stream of naturally occurring CO2. Capable of 230 million standard cubic feet per year rate of bulk liquid helium extracted from a stream of CO2 otherwise utilised for enhanced oil recovery (EOR), however production has reportedly been below full capacity due a lack of feedgas.

US Southwest – Four Corners area Nacogdoches Oil & Gas is expected to double production of high purity crude helium to 140 MMCF/yr in early 2018, while several other small companies are understood to be actively working to develop new helium production from non-hydrocarbon gas.

BLM Pipeline & Storage System, Amarillo, Texas Installation of central compression scheduled for March 2018 will provide an uptick in deliverable capacity and a temporary respite from the long-term decline of the BLM System.

The BLM is in the early stages of exploring privatisation of the BLM System, which must be completed by 30th September 2021.

68 gasworld Yearbook • 2018/19

gasworld.com/europe

SPECIAL FEATURE

Orenburg, Russia Odolanow, Poland Helios, Arzew, Algeria • On-stream 1994 • 600 million standard cubic feet per year capacity

• On-stream 1980 • 100 million standard cubic feet per year capacity • Operated by Polish Oil and Gas company

• On-stream 1977, new liquefier added in 2014 • 100 MMCF/yr production capacity • Operated by Gazprom Dobycha Orenburg

Gazprom’s Amur Project, Eastern Siberia

Helison, Skikda, Algeria • On-stream 2007 • Expansion to 600 MMCF capacity in late 2013 after installation of LNG mega-train

Gazprom planning to build 2.1 BCF/yr of liquid helium capacity in three 700 MMCF/ yr increments, with the initial 700 MMCF/ yr liquefier aiming for May 2021 start-up, followed by additional 700 MMCF additions in 2022 and 2024.

RasGas Helium 1, Ras Laffan, Qatar On-stream in 2005, the Helium 1 plant in Qatar reached full utilisation in 2008 and derives its helium feedstock from eight LNG processing trains, with a capacity of 700 million standard cubic feet per year.

RasGas Helium 2, Ras Laffan, Qatar Brought on-stream 2013, production capacity at the unit – the world’s largest helium purification and liquefaction unit – is approximately 38 million cubic metres of helium per year at full capacity. Between them, RasGas’ Helium 1&2 plants meet around 25% of global helium demand.

RasGas Helium 3, Ras Laffan, Qatar The 425 MMCF/yr Helium 3 project is reportedly delayed until at least 2019 due to problems with the pipeline that will transport feedgas to the Barzan Gas Processing Plant.

Tanzania Helium One and at least one other company are in the early stages of exploring for helium in the Lake Rukwa area.

Darwin, Australia The only liquid helium processing plant in the Southern Hemisphere, Linde-BOC’s Darwin plant in Australia has the capacity to produce 150 million standard cubic feet of helium per year.

Virginia, Free State province, South Africa With proven reserves of 25 billion cubic feet of both natural gas and helium, the field boasts a high concentration of the latter – up to 3-4% by volume. Set to commence operations in 2018, gasworld estimates a capacity of 100-150 million standard cubic feet per year.

2018/19 • gasworld Yearbook 69

EVENTS 2019 1

30th - 31st January EIGA Winter Seminar

2

12 - 13 March th

th

11th - 14th March

gasworld CO2 Summit Innsbruck, Austria

Brussels, Belgium www.eiga.eu

AIIGMA 41st Seminar on Industrial Gases

www.gasworldconferences. com/conference

4 11 - April th

3

Istanbul, Turkey www.aiigma.org

5

5th - 6th May

GAWDA Spring Management Conference Minneapolis, Minnesota www.gawda.org

BCGA Annual Conference 2018 Manchester, England www.bcga.co.uk

6

29th May - 1st June

4th - 6th May

7

GAWDA Regional Seven Springs, Pennsylvania www.gawda.org/activities/ regional-meetings/

10

19th -20th September IG China 2019 Hangzhou, China

8

June TBC

gasworld South America Industrial Gas Conference 2019 Colombia/Peru www.gasworldconferences. com/conference

19th -20th September

11

IOMA Annual Meeting Bangkok, Thailand www.ioma.wildapricot.org

www.china-gases.com/ home.php December TBC 11th -14th November FABTECH Chigago, Illinois www.fabtechexpo.com

178 gasworld Yearbook • 2018/19

13

gasworld MENA RAK, UAE www.gasworldconferences. com/conference

14

EIGA Summer Session Malta www.eiga.eu

9

September TBC gasworld South East Asia Summit Vietnam www.gasworldconferences.com/ conference

28th September– October 1st

12

2019 GAWDA ANNUAL CONVENTION – WASHINGTON, DC Marriott Marquis Washington DC 901 Massachusetts Avenue NW Washington, DC 2000

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