Air Products South Africa and Sasol Chemical Industries have signed a landmark agreement, which will see Air Products purchase the Sasolburg A2100 air separation unit (ASU), and simultaneously commence with a new long-term supply agreement.
The agreement brings the ownership of this facility ‘full circle’: it was originally designed and constructed by Air Products in 1997, and has to date been operated and maintained by Air Products for Sasol on a contract basis.
Going forward, Air Products will continue to generate oxygen and nitrogen for the Sasolburg chemical complex. However, the company will be able to extract further value for both parties via the integration of the plant into its wider supply chain.
This will include the generation and sale of by-products such as liquid nitrogen and liquid argon, according to Mike Hellyar, Managing Director of Air Products South Africa.
“Our purchase of the A2100 from Sasol will have numerous benefits for both parties, and for other key customers. The A2100 is linked via pipeline to our flagship production facility at Vanderbijlpark - including our new state-of-the-art ‘G-Plant’ - which will also supply a significant portion of Sasol’s industrial gas requirements,” says Hellyar.
“Changing from contract operator to owner of the plant creates synergies which will provide a better balance of supply and demand of gaseous product. These synergies will not only provide opportunities to improve energy efficiency, but also create a solid platform for Air Products to continue to ensure optimal customer service levels and long-term security of supply to the merchant industrial gas market.”
In line with the agreement, Sasol Chemicals Industries will effectively outsource its industrial gas production at the Sasolburg site, while ensuring the continuation of the long-term supply relationship it has enjoyed with Air Products South Africa for many years.
“This transaction supports our approach of outsourcing critical activities, which are not our core competency, to specialist technology and service providers such as Air Products South Africa,” says Bernard Klingenberg, Sasol Executive Vice President: Southern Africa Operations.
“This agreement and the commencement of the long-term supply contract with Air Products is further testimony to our confidence in their supply chain and customer service capacity and expertise,” Klingenberg adds.
Throughout the purchase agreement process, Air Products has ensured compliance with national competition legislation, obtaining the official approval from the Competition Commission in August this year.
“Gaining approval from the Commission was a major milestone, and we are very pleased to have been given the opportunity to leverage our existing network to create further value within our long-term gas supply agreement with Sasol,” Hellyar remarked, adding, “As the leading producer of industrial gas in South Africa, and as a supplier of air separation technology and services, our relationship with Sasol goes back a long way.”