GAS COMPANIES

PLAYERS EXTEND REACH

AIR LIQUIDE PURCHASES SCOTT SPECIALTY GASES
American Air Liquide Holdings, Inc., announced an agreement to purchase the assets of Scott Specialty Gases, Inc., a leading privately held international producer and supplier of value-added mixed and pure high specialty gases to the analytical, medical and electronics sectors, and of high-performance gas handling equipment and specialty gas delivery systems. The transaction is pending clearance from the US antitrust authorities.

Headquartered in Plumsteadville, PA, Scott employs approximately 450 people with annual sales of approximately $88 million. In the US, Scott has operations centers in the Northeast, Midwest, Gulf Coast, Rocky Mountain, and Pacific markets. Internationally, Scott develops business from the UKNetherlands to Europe, India, Africa the Middle East and Taiwan.

The combined Air Liquide and Scott operations in the high growth market for specialty gases will provide Air Liquide with a new platform for growth, a stronger US presence, notably in the Mid Atlantic and North Central areas, and reinforces AL’s important business in Europe, Taiwan and the Middle East.

A NEW PRAXAIR JOINT VENTURE

Praxair Distribution Inc. (PDI), its JV business, Welco-CGI Gas Technologies, LLC and GT&S, Inc., have agreed to form an industrial gases distribution JV. Specific terms of the agreement were not disclosed. The intention is to establish the new company during the fourth quarter of 2007, with completion of the transaction subject to satisfaction of certain conditions and obtaining of regulatory approvals.

Welco-CGI and GT&S will contribute their current businesses and PDI will contribute certain production-related assets including its Bethlehem, PA, specialty gases manufacturing facility.

The new company, with estimated annual sales of $180 million, will have about 700 employees and serve approximately 34,000 customers in the healthcare, pharmaceutical, environmental, chemical, bio-technology, university research and metal fabrication industries. The venture will operate 46 production and distribution facilities and retail outlets in the US.

AL SUPPLIES SUNFILM
Air Liquide Deutschland GmbH has concluded a contract for the complete gas management of the newly founded photovoltaic company, Sunfilm AG whose stockholders are Norsun AG and Good Energies, a business of the Dutch COFRA Group, one of the world leading investors in renewable energies.

At Großröhrsdorf, east of Dresden in Saxony, Sunfilm will be the first company to manufacture tandem thin-layered photovoltaic modules on glass carrier materials of approximately six square meters. The first of the production lines is currently being built. The ten year-contract with Air Liquide includes the supply of industrial and specialty gases as well as all related services regarding gas management by an Air Liquide dedicated team.

With annual growth rates of more than 30 percent, the photovoltaic industry is one of the booming lines of business in the world. The production of solar cells requires large quantities of industrial gases. One production line alone consumes several million cubic meters of nitrogen per year. Air Liquide will notably provide nitrogen, hydrogen, silane, NF3 and helium. For the new plant at Großröhrsdorf, Air Liquide will construct a nitrogen on-site production unit and all the facilities required to safely manage bulk specialty gases containers directly on the customer’s premises.

AL ACQUIRES TEAM ONE

Air Liquide Healthcare America Corporation acquired Team One Technologies Inc., an independent producer and distributor of medical and specialty gases located in Romeoville, IL, on August 31, 2007. Air Liquide Healthcare America, which has had along and successful business relationship with Team One in the greater Chicago area, will own and operate Team One’s medical and specialty gas facility to support its strong growth initiatives in the Midwest medical gas market. The newly acquired facility will also supply Air Liquide’s non-medical packaged and specialty gas business, with an additional geographic base for direct and distributor sales.

The acquisition strengthens Air Liquide Healthcare America’s position as a major supplier in the greater Chicago area, a region that represents approximately six percent of the overall USBurlington, WI and Mapleton, IL. Air Liquide supplies bulk and cylinder medical gases and related services to more than 3,000 hospitals, surgery centers, clinics and physicians throughout the US.

AL INVESTS IN WELDING
Based on positive perspectives for the future development of welding technology in Europe, the Middle East and Asia, the Air Liquide Welding Group has decided to invest further in its Cittadella, Italy, and Eisenberg, Germany, production sites. Since mid 2007, the capacity of the flux cored wire facility in Cittadella has been increased by over 20 percent. Beginning January ’08, the production capacity of the submerged arc flux plant in Eisenberg will be increased by over 65 percent. The total amount of these investments is around €5 million.

AP EXPANDS LIQUID CAPACITY
A new liquefier to be built by Air Products will generate an additional 400 tons per day (TPD) of industrial gases to meet fast growing demand in Polish manufacturing sectors. The new liquefier will be located at the company’s Kedzierzyn facility in the south of Poland, taking the total capacity there for oxygen and nitrogen products to 800 TPD. The facility is scheduled to be on-stream early in 2009, subject to approvals from the authorities.

Manufacturing in Poland grew by 7.4 percent in the past six years. Nearly 30 percent of the total Polish manufacturing output and approximately 25 percent of new manufacturing investment are located within 150km of Air Products’ Kedzierzyn facility. It is expected that the Polish gases market will become severely short of capacity in 2008 as demand continues to rise and will increasingly rely on imports.

The company says it also expects to generate distribution synergies, given Kedzierzyn’s proximity to existing Air Products business clusters in the Czech and Slovak Republics. In April, Air Products completed the acquisition of the BOC Gazy industrial gas business from The Linde Group, making Air Products the leading industrial gas supplier in Central Europe’s fastest growing economy.

FUEL CELLS GET A LIFT
Air Products mobile hydrogen fuel technology is proving to be up to the challenge in Columbia, SC where it is participating in a six-location Fuel Cell Lift Truck Demonstration Project (See CGI, October 2007, GENH2 for related news). AP mobile fueling technology is providing hydrogen for two H2 powered lift trucks that have been equipped with fuel cell power packs manufactured by Hydrogenics. These packs are installed by LiftOne in electric lift trucks manufactured in Summersville, SC and are being used for deployment at six different commercial warehouse facilities. Daily performance evaluations will conclude in December.

This multiple site demonstration project is the most ambitious initiative to date funded under the sponsorship of the Greater Columbia Fuel Cell Challenge. The Challenge is a collaborative effort between the City of Columbia, the University of South Carolina, EngenuitySC and SCRA, whose collective mission is to accelerate the deployment and adoption of a wide array of hydrogen and fuel cell technologies within the Midlands region of SC. Launched in the summer of 2006, the Challenge has awarded 10 projects to date.

AP SIGNS HYNIX
Air Products through its subsidiary in Korea, has signed a long-term contract to supply nitrogen to Hynix Semiconductor Inc., a memory chip manufacturer. The nitrogen will be supplied to a new back-end test and packaging fab that Hynix is building in the Cheongju Industrial Complex, in Korea. AP will build, own and operate the nitrogen air separation plant (ASU), which is scheduled to come on-stream in mid-2008.

Hynix has two wafer fabrication plants producing flash memory chips, and one backend test and packaging fab in Cheongju. It is now adding a second back-end unit to support the current production lines in the complex. The strong growth in demand of memory chips is being driven by new applications in mobile communications, automobiles, game systems, portable multimedia players, and personal computer operating systems.

IT’S NOW ALL LINDE
The integration of BOC Gases and Linde in North America has reached a new milestone. As of October 1 the Linde logo will make its appearance on Linde plants, trucks and bulk gas tanks throughout the US, Canada and the Caribbean. The branding conversion process is expected to take several years to complete.

Linde AG acquired The BOC Group, PLC in September 2006 to form The Linde Group, which consists of a group of over 100 companies in more than 70 countries.

FIBA RECEIVES PERMIT
FIBA Technologies, Inc. announced that the US Department of Transportation has granted the company a special permit DOT-SP 14453, which authorizes a 10-year requalification cycle on certain, compressed gas tube trailers and ISO skid containers. This special permit requires state-of-the-art, ultrasonic examination (UE) to assess the integrity of the cylinders and tubes. The permit works in conjunction with the recent DOT requirement to perform inspection of the OD neck threads on tubes that are mounted in a tube trailer or ISO frame bundle. This superior test method coupled with regular monitoring of the operating conditions of the equipment (e.g. fill cycle counting, gas quality integrity, and visual examinations) will improve fleet safety. Extended retest cycles reduce the cost of fleet operations.

GLOBAL GASES SUPPLIES HELIUM TO MRI
Global Gases Dubai has begun to supply helium from Matheson Tri-Gas in bulk liquid form. The company is targeting the healthcare business, supplying liquid helium used to cool down the superconducting magnets that are an integral component of MRI systems. and the medical gases market. In addition to the Romeoville, IL facility,Air Liquide also supports its medical and non-medical businesses in this region with bulk products from facilities in

 

Global Gases Dubai, established in 2002, has previously focused on the supply of argon and services to oil & gas exploration and drilling companies in the Middle East, the Caspian Sea and African offshore fields. Deepak Mehta, founder, has high expectations for the new helium business. “Helium was my first love in the gases business,” he said. “It’s the business I grew up in and I am so happy to be back in it, especially with the brand name and global capabilities of Matheson Tri-Gas and Taiyo Nippon Sanso behind me.”

NEW JV FOR CO2 CAPTURE
RWE Power, BASF, and The Linde Group have agreed on the development of new processes for CO2 capture from combustion gases in coal-fired power plants. The group will work together on the construction and operation of a pilot facility at the lignitefired power plant of RWE Power AG in Niederaussem. The pilot facility tests new developments and solvents from BASF for the capture of CO2, a process known as CO2 scrubbing. Linde will be responsible for the engineering and the construction of the pilot facility.

The pilot facility will serve as the longterm testing plant for new solvents with a view to gaining an understanding of processes and plant engineering to improve CO2 capture technology. The goal is to apply CO2 capture commercially in lignite-fired power plants by 2020. The new technology is being designed to remove more than 90 percent of CO2 from the combustion gas of a power plant and then subsequently to store this gas underground. Once successful pilot tests are complete, the group will decide on a subsequent demonstration plant in 2010 that will be designed to provide a reliable basis for the commercialization of the new process. RWE Power has earmarked a budget of approximately €80 million for the development project, including the construction and operation of the pilot facility and demonstration plant.

RWE and BASF have been involved in the CASTOR project since early 2004, a research project that is sponsored by the European Union (EU) and which seeks to find methods to remove CO2 from combustion gases and to store it. The project is also supported by a number of other public and private enterprises.

LINDE SUPPLIES STEEL
The Linde Group has entered into a longterm supply agreement with the Austrian steel producer Voestalpine to deliver industrial gases to its Linz production site. The contract, which involves the construction of an additional on-site ASU, calls for an investment of €62 million and will extend and supplement existing supply agreements.

It will be managed by Linde Gas Austria. The new ASU is due to come on stream in January 2010 and will supply the Voestalpine steelworks in Linz by pipeline with up to 30,000 cubic meters per hour of gaseous oxygen and nitrogen. The plant is also expected to produce LOX, LIN and LAR, as well as smaller quantities of krypton and xenon for the open market.

LINDE ALLIES WITH SBM

Linde has formed a global alliance with Single Buoying Mooring Inc. (SBM) to develop and market Floating Production, Storage and Offloading units (FPSO) for the growing Liquid Natural Gas (LNG) industry, based on Linde’s proprietary natural gas liquefaction technology.

SBM, based in the Netherlands, is a market leader in the field of FPSOs for the offshore oil and gas industry. They currently own and operate 16 world scale and ownbuild FPSO-units for crude oil and LPG production worldwide. After having finalized a generic concept for a LNG FPSO with a yearly capacity of approximately 2.5 million metric tons of LNG, global marketing efforts are already in effect. The FPSO is designed for any conventional natural gas composition and aims at offshore natural gas fields with recoverable reserves of one trillion cubic feet or more.

Under terms of the alliance, Linde will contribute the FPSO topsides including gas pretreatment, C3+ fractionation and natural gas liquefaction based on Linde’s proprietary Multi-Stage-Mixed-Refrigerant process (LiMuM). SBM will provide marine technology, including hull and LNG storage tanks system, power generation system, mooring system, cryogenic offloading systems and FPSO operational experience.

While all process units of a LNG FPSO are proven on-shore technology, the integration of multiple large and heavy process modules with the hull structure and on a limited deck space requires innovative solutions. LNG processing, utility supply, cryogenic offloading and mooring systems are designed to reliably operate under severe marine conditions and with minimal maintenance. The design also incorporates Linde’s experience with Europe’s first base load LNG plant (4.2 million metric tons of LNG per year) for Statoil’s “Snohvit” project, which Linde erected on a small island in the Norwegian Arctic Circle utilizing a unique 35,000 ton, bargemounted process unit.

It is Linde and SBM’s intention to sell LNG-FPSO’s turn-key or to offer liquefaction services in a build-own-operate model to the LNG industry. Start of LNG production from the first unit is envisaged for 2012.

MAJOR LNG PROJECT BEGINS
The Norwegian oil and gas company, Statoil ASA, the operator of the Snøhvit gas field in the Barents Sea, announced that production of liquefied natural gas (LNG) has started from Europe’s largest LNG plant at Melkøya island near Hammerfest, Norway. Linde has been responsible for engineering, procurement and construction assistance of the plant for the last five and a half years. The entire contract is worth approximately € 900 million for Linde.

The gas is delivered to the plant through a 143 km long subsea pipeline from production wells located on the seabed 300 meters below the sea level. The feed gas first flows through a pipe assembly called a slug catcher where gas, condensate, water and glycol are separated. The gas stream is further treated to eliminate CO2, water and mercury prior to entering the liquefaction process. The LNG is then transferred to storage tanks awaiting transport by LNG tankers to customers in the US and Europe. The CO2 separated from the wells stream is compressed and transported back to the Snøhvit field via pipeline, where it is injected in a separate reservoir for storage, thus minimizing the emission of CO2 from the plant. The LNG process plant at Melkøya is said to be one of the most energy efficient plants of its kind in the world.

LINDE INSTALLS ON-SITE FLOURINE
Linde Electronics has installed the electronics industry’s first on-site fluorine blending module at UMC Singapore, helping UMC to improve safety and lower operating costs in its fab production line. In UMC’s Singapore fab, cylinder fluorine was replaced with two new, Linde Generation-F® on-site fluorine generators, which combine proven technology with intrinsically safe design. The generator and blending module are backed up by dedicated on-site support to provide semiconductor manufacturers with a safe and highly reliable source of pure fluorine for chemical vapor deposition chamber cleaning.

The Linde fluorine generators provide UMC Singapore’s manufacturing line with a fully redundant supply of high purity, 100 percent fluorine on demand. The fluorine is delivered to the process tools through the blending module, which creates an 80-20 nitrogen-fluorine blend. Linde’s blending capability enables a seamless transition at sites where cylinders are already established, with no changes required for the process tools or existing supply pipework.

MESSER BREAKS GROUND IN POLAND

In October, Messer broke ground on an air separation plant in the Upper Silesian city of Rybnik in Poland’s industrial heartland. Beginning in 2009, the plant will produce technical and medical gases for the Polish, Slovakian, and Czech Markets.

In addition to liquid technical gases, the plant in Rybnik will also produce medical oxygen for both the institutional and homecare markets. In Hungary, the number of patients receiving homecare has risen from 2,300 to almost 4,000 since 2004. Messer distributes oxygen concentrators to providers of respiratory services. The new ASU will also supply high purity nitrogen for use in the food industry.

The Rybnik plant is being built by Cryogenic Engineering, a joint venture between Messer and HangYang Ltd., the largest Chinese manufacturer of air separation plants. The construction of this ASU in Poland gives Messer its own, independent product supply for the largest industrial gas market in Central Europe.

GAS.DE GETS LIN CONTRACT
The Hessen-based industrial gas producer Gase.de Vertriebs-GmbH has signed a contract with the Institute for Aircraft Propulsion Systems (ILA) at the University of Stuttgartbeing tested under arctic conditions to check their reliability for takeoffs at the North and South Pole. In addition to the nitrogen, Gase.de is also supplying the on-site tank system and piping.

With this contract, Stefan Messer continues the family tradition of serving the gas industry in Germany. Messer sold his shares in the German company Messer Griesheim GmbH in 2004. Since May of this year, he has been operating in the German industrial gas market with Gase.de Vertriebs-GmbH.

PRAXAIR IS BUSY ABROAD

Praxair China will build a new state-of-the- art specialty gases facility in the Nanjing Science Park, in Nanjing, China. The facility, scheduled to start up in August 2008, will consist of a specialty gases laboratory, calibration equipment and gas analyzers, and high purity cylinder filling operations. Markets served will include the petrochemical, automobile, lighting, and pollution control industries, as well as numerous laboratories and research centers. It will also enhance Praxair’s capability to develop new applications technologies specifically for Chinese customers. In a second phase, the facility will process electronics-grade gases and mixtures to serve the semiconductor industry.

In Spain, Praxair, Inc. announced it will work with Fundación Ciudad de la Energía (CIUDEN), a Spanish government agency, to develop a pilot facility incorporating advanced technologies for carbon dioxide abatement and capture from coal-fired electricity generating plants. To be located in El Bierzo, in northern Spain, the initial phase of the project is scheduled to be completed by mid-2009. It will conduct tests using anthracite coal and petroleum coke fuels in both pulverized-coal and circulating fluidized bed (CFB) boilers under a wide range of operating conditions and with different degrees of oxy-coal combustion. Biomass fuel may be tested at a later stage.

In oxy-coal combustion technology, pure oxygen instead of air is introduced to the boiler, creating a highly concentrated stream of carbon dioxide, which is more economical to capture. Praxair will provide the upstream oxygen supply facilities; the oxygen mixing and injection technology; the downstream carbon dioxide capture and gasprocessing technologies and equipment; and the overall control systems integration for the power systems.

Praxair India, the largest industrial gas producer in India, has been selected to supply JSW Steel with its industrial gas needs for the expansion of its steel plant in Vijaynagar from 6.8 million tons to 10 million tons per year by 2010. Praxair will build and operate a state-of-the-art, 1,800-tons-per-day (1,984 tons) ASU equipped with advanced process controls and energy-efficient process cycles. Praxair will also install significant storage capacity for LOX, LIN and LAR, primarily to meet JSW’s requirements and to supply merchant liquids to the fast growing region of southern India.

Jindal Praxair Oxygen Company Limited (JPOCL) currently supplies JSW’s highly efficient Corex process. JPOCL is a joint venture between JSW Steel and Praxair, which operates two of the largest air separation plants in India with a combined oxygen capacity of 5,000 tons per day.

Mergers and Acquisitions for the supply of a million kilograms of nitrogen per year over a period of five years. The nitrogen is needed for the operation of an air cooler that produces cold dry air chilled to a temperature of minus 90 degrees Celsius for use in a turbine test rig. Almost 30 tons of LIN an hour is needed in order to fill the test rig with freezing cold air. The turbines are

HARSCO TO DIVEST GASSERVE

The Harsco Corporation announced its intentions to pursue the divestiture of the Harsco GasServ business in January 2007, consistent with the Company’s overall strategic focus on industrial services, and reports progress is being made toward this end.

Harsco Chairman and CEO Derek C. Hathaway said, “We have made significant progress and are at an advanced stage in the sale process. We now anticipate that the transaction will be completed within the fourth quarter of this year, and we continue to take all appropriate actions to ensure a transaction that is in the best interests of Harsco stockholders.”

LINDE ACQUIRES BERTRAMS HEATEC
The Linde Group has bought the Swiss plant engineering and construction company Bertrams Heatec AG. Terms of the transaction were not disclosed. Bertrams Heatec AG, headquartered in Pratteln, Switzerland, is a specialist in the construction of systems for the safe transfer of process heat, mainly for the chemical and petrochemical industries. These systems are used for the manufacture of artificial fibers, synthetic resins (melamine), aluminum oxide and dyestuffs, together with applications in the textile and food industries aswell as solar power plants. In fiscal year 2006, the company employed 35 employees and had sales of approximately €15 million. Linde will operate Bertrams Heatec as a wholly-ownedsubsidiary. The closing of the transaction is subject to regulatory approval and customary conditions.

PRAXAIR TO SELL ISRAELI BUSINESS
Praxair, Inc. has signed an agreement to sell its majority interest in Maxima Air Separation Center Ltd., based in Ramat Gan, Israel, to Discount Investment Corporation Ltd. (DIC), one of Israel’s largest holding companies, a part of the IDB Group. DIC already holds an interest in Maxima. Completion of the transaction is subject to obtaining regulatory and other approvals. Maxima has two air separation plants and had sales of $23 million in 2006. Following the sale, Maxima will continue to serve as a distributor of Praxair’s products in Israel and will continue to have access to certain Praxair technology. Under the agreement, Maxima will be defined as a Praxair technology associate.