Air Products has signed an agreement to form a $1.3bn joint venture (JV) with Lu’An Clean Energy Company, which will significantly expand Air Products’ scope of supply serving Lu’An Mining Group Co., Ltd’s syngas-to-liquids production in Changzhi City, Shanxi Province in China.

The new JV, to be called Air Products Lu’an (Changzhi) Co., Ltd., 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. Closing is expected as soon as possible, pending initial operational start-up and government and regulatory approvals.

Seifi Ghasemi, Chairman, President and CEO of Air Products said, “We are delighted to have Lu’An, a leading clean energy company in China, as our JV partner. The creation of this world-class JV is perfectly in line with our stated strategy of deploying our significant cash to grow by acquiring existing assets and expanding our scope of supply to include syngas.”

Lu’An’s Chairman, Li Jinping added, “Extending our strong partnership/relationship with Air Products through this new JV enables us to take advantage of world-leading project management and operational expertise to deliver syngas for this landmark energy project.”

The agreement is subject to government and regulatory approval.