Praxair and BASF have signed a long-term agreement for the Tier One company to design, build, own and operate a new syngas processing plant at BASF’s facility in Geismar, Louisiana.

The new plant, which will start up in 2020, will produce high-purity carbon monoxide (CO) and hydrogen (H2) from a stream of crude synthesis gas. CO is a raw material in the production of a range of specialty chemicals used in the housing and auto industries.

H2 is used to produce several chemical intermediates and clean fuels from refineries.

Coupled with an earlier investment that Praxair announced in April 2016, this will bring the company’s total new investment in the Geismar area to approximately $250m. These investments, including pipeline expansions, are examples of Praxair’s ongoing commitment to supporting growing customer demand and further increasing supply reliability in the Mississippi River chemical corridor.

Dan Yankowski, President of Global Hydrogen at Praxair, said, “I am very pleased to announce this new value-creating project in Geismar as we continue to expand our operations in the U.S. Gulf Coast. We understand the important role that this new plant will play in BASF’s growth and are committed to supporting that success by reliably supplying their operations over the long term.”