From the very first month of the year, 2017 proved to be a strong year for the industrial gases industry – full of project announcements, capacity investments, and breaking M&A news from around the globe.
Indeed, mergers and acquisitions activity continued to surprise in 2017 (think Pentair’s acquisition of Union Engineering or Nikkiso’s purchase of Cryogenic Industries), while one story in particular dominated headlines throughout the year – the proposed merger of Praxair and Linde.
Just as Praxair-Linde proceeded to unfold throughout the year, so too did a positive streak running through the financials of the industry’s major players, all of which appeared to point to a tempered confidence in the industry’s growth prospects for the year ahead – and perhaps the most positive year yet for the industry since its gradual recovery from the financial crisis of 2008/9.
This positivity is widely expected to continue into 2018 – assuming major external headwinds do not become a factor in the industry’s growth – along with further capacity expansions and plant additions, particularly in the fast-growing Asia-Pacific market. As we look ahead to the year ahead, here are some of gasworld’s highlights of global project developments in the next 12 months.
Here you can find gasworld’s edited highlights, in the Europe region.
One of a number of clean energy projects also comes to fruition in Europe the year ahead, with the Jupiter 1000’ Power-to-Gas plant in Fos-sur-Mer (Bouches-du-Rhône), France – involving McPhy – set to be commissioned in 2018 and effectively setting the stage for the deployment of the French Power-to-Gas sector.
McPhy will supply GRTgaz with hydrogen production equipment with a total power of 1 MW (megawatt); as key components of this project, electrolysers will transform surplus energy originating from renewable sources into hydrogen. This green hydrogen will be injected into the natural gas network either directly or after transformation into methane, the principal constituent of natural gas.
June 2018 is anticipated to see carbon dioxide (CO2) company ACP Group start operations at a new multi-million-euro CO2 purification line in Włocławek, Poland. Under a €10m ($11m) expansion investment, the Belgium-based business will add a third food-grade recovery and purification line to two other units already in operation at chemical company Anwil S.A.’s site in the Polish city.
Under this new investment, ACP’s three CO2 liquefaction and purification lines will reach a total capacity of 37.5 tonnes per hour – a potential recovery of 300,000 tonnes of CO2 per year overall. The addition will also allow uninterrupted, continuous production to cover the growing demand for pure liquid CO2 across Europe.
gasworld Business Intelligence understands that two captive plants are due to be delivered in Grodno, Belarus in 2018 for JSC Grodno Azot, a modern, highly automated petrochemical complex enterprise and part of the country’s state concern on petroleum and chemistry. It is understand that Linde Engineering is the company behind the plants.
As announced back in 2012, this could be the year for the East Siberia gas fields to come to fruition as a major new source of helium. The Chayandinskoye field, together with other resources owned by Gazprom in the East Siberian region, forms one of the largest reservoirs of helium in the world. By using the appropriate facilities – originally anticipated to be commissioned in 2018 – the helium production levels will be set to enable balancing of world supplies and demand for decades.
The volume of helium produced by Gazprom will replace the volumes produced by the US Bureau of Land Management (BLM) system for decades to come, as the BLM system depletes. Linde intends to act as a strategic buyer of significant volumes of helium from the new facility in the town of Belogorsk, pursuant to a Memorandum of Understanding (MOU) signed and revealed six years ago.
2018 – The dawn of Linde plc?
One of the biggest stories of the industrial gas year now and next is the planned $70bn merger of equals between Praxair, Inc. and The Linde Group.
The deal was first mooted in August 2016, revived in November 2016 and a deal-in-the-making for much of 2017. As of 1st June 2017, the definitive agreement was signed on the deal, which sees two of the biggest players in the global industrial gases business come together. The ‘compelling and transformative opportunity’ has been awaiting various stages of approval ever since, including shareholder approval from both parties and necessary anti-trust approvals.
Praxair announced in late September 2017 that its shareholders had approved the business combination with Linde AG at a special meeting of shareholders, with approximately 83% of the total issued and outstanding shares of Praxair common stock voting to approve the business combination – exceeding the required vote of a majority of the issued and outstanding shares, and representing approximately 99% of the total votes cast.
On 27th September (2017), the Linde Acceptance ratio for the voluntary public takeover offer (exchange offer) of Linde plc (Praxair-Linde) to the shareholders of Linde AG had reached a 90% threshold.
The deal looks set to move into a critical concluding phase in 2018, should it materialise as planned, and will lead to the combined entity that usurps Air Liquide as the leading force in the global gases business. gasworld Business Intelligence estimates a combined market share of 33% pre-divestment; much of 2018 is widely anticipated to be about the extensive divestment process in progress.
The deal promises to change the face of the industry once again, following Air Liquide’s mega acquisition of fellow Tier One company Airgas, Inc. in 2015/16. Air Liquide had become the leading player in the North American market, while complementing global leadership positions in Europe, Africa/Middle East and Asia-Pacific when it completed the $13.4bn takeover of Airgas on in May 2016.
Praxair-Linde (or Linde plc as the combined company will be known going forward) will usurp this position, with the deal now subject only to the approval of competent regulatory authorities, including first and foremost the Federal Trade Commission (FTC) and the European Commission (EC).
All projects, timelines and capacities correct at the time of writing and according to original press releases.