Air Products (NYSE: APD) has reached an agreement with PBF Energy Inc. (NYSE: PBF) that include the acquisition of $530 million of five hydrogen steam methane reformers (SMR) hydrogen production plants and the long-term supply of hydrogen to PBF refiners from those already operating plants.
Located in Torrance and Martinez, California and Delaware City, the SMRs have a combined production capacity of nearly 300 million standard cubic feet per day.
The deal is expected to close during the third quarter of 2020 fiscal year.
“This puts us in an outstanding financial position to execute our strategy of investing in long-term onsite deals, which includes asset acquisitions like the one we are announcing today. With this acquisition, not only do we gain five SMR plants, but we also secure a long-term hydrogen sale of gas agreement with an existing customer who is one of the largest independent refiners in North America,” said Seifi Ghasemi, Chairman, President and Chief Executive Officer at Air Products.
Air Products is known as a leader in the supply of hydrogen to refineries in order to make cleaner burning transportation fuels.
The company also operates one of the most successful carbon capture projects in the world in Port Arthur, Texas, where the captured carbon dioxide (CO2) is injected into the ground and used for enhanced oil recovery in the state. Since 2013, Air Products has captured nearly 10 million tons of CO2 at Port Arthur that has been put to beneficial use.
Air Products currently operates 12 industrial gas facilities in California, which includes five hydrogen production plants.
The SMR being purchased in Delaware City would be Air Products’ first major asset operating in Delaware.