China: major oxygen contract for gasification unit

China owns the world's third largest coal reserves, and naturally looks into ways of valuing them in order to reduce its growing dependency on foreign energy sources and feedstock.

Several technologies based on coal gasification allow the transformation of coal into liquid petroleum or chemical products. These gasification processes require huge quantities of oxygen.

In this context, Air Liquide announces it has signed a long-term contract with Yutianhua, Shaanxi Yulin Natural Gas Chemical Industry. Under the terms of the agreement, Air Liquide will invest about €60 million in a new large Air Separation Unit (ASU) - with a production capacity of 2,700 tonnes of oxygen per day - to supply oxygen and nitrogen to Yutianhua. The ASU, designed and built by Air Liquide Hangzhou, the Air Liquide engineering center in China, will use Air Liquide's latest technologies providing both high reliability and energy efficiency.

Yutianhua, a natural gas based methanol player in China, has a current production capacity of 510 thousand tonnes per year. In 2008, Yutianhua launched an additional 600 thousand tonnes per year methanol coal-based project with a total investment of 3 billion RMB. This is the first phase of a major methanol project. Its unit is located in Yuheng Chemical Industrial Park of Yulin City, Shaanxi Province. Air Liquide's new ASU will be located next to the Yutianhua site.

Jean-Pierre Duprieu, Vice President Asia-Pacific and a member of the Air Liquide's Executive Committee, said, "We want to thank Yutianhua for its trust in us, as well as the Yulin authorities for their continuous support. This success illustrates Air Liquide's ability to develop leading edge technologies and high value-added solutions for this industry as well as the Group's commitment in China. This investment offers further illustration of the acceleration of our development in emerging economies, with a share of Group revenue that will have doubled over 6 years."

Mr. Han Delin, Chairman of Yutianhua, added, "Yutianhua's methanol project is one of the key projects in Shaanxi, and is strongly supported by the local and provincial governments. After fruitful discussions, we have decided to entrust Air Liquide with our industrial gas needs. Air Liquide has demonstrated that it understands our needs and is competitive. We are happy to outsource our industrial gas needs and to enter into a long-term partnership with Air Liquide that enables us to benefit from its worldwide expertise."