Air Products Korea sale to fund blue hydrogen business | Power
Air Products and Chemicals has put its South Korean unit up for sale for an estimated $3.6bn which will be used to back its blue hydrogen business, according to reports.
The industrial gas giant selected Citigroup Global Markets to lead the transaction, which H2 View understands is scheduled to be completed by the end of the year (2024).
The US headquarters and its affiliates, Air Products Manufacturing and Air Products International, own 33.9%, 24.5% and 41.6%, respectively. The Korean unit refines and supplies various elements including nitrogen, helium and oxygen to factories owned by companies such as Samsung Electronics.
Sources have suggested that Korean steel firm, POSCO Group, may join the bid to acquire Air Products Korea.
In May (2024), Air Products’ CEO, Seifi Ghasemi said that he expects blue hydrogen to take over from grey hydrogen within the next decade. “I don’t think anybody will be using grey hydrogen,” he said. “Everybody will be using blue.”
Read more:Air Products CEO predicts end of grey hydrogen era within the next decade
Ghasemi added, “In the long-term, we are going to make only blue. 15 years from now, we will not have any steam methane reformers (SMRs) running.”
Just last month (July), Saudi Aramco agreed to buy a 50% stake in Air Products Qudra’s (APQ) Saudi-based blue hydrogen subsidiary, Blue Hydrogen Industrial Gases Company (BHIG).
Read more:Aramco to buy 50% stake in Air Products Qudra’s blue hydrogen business
The two companies agreed to share ownership of the blue hydrogen business, with plans to supply the methane and carbon capture-based hydrogen through a pipeline network in Saudi Arabia’s eastern province.
Air Products is also set to retrofit its grey hydrogen production plant in Rotterdam, the Netherlands, to produce blue hydrogen. The facility is anticipated to have a capacity of 300 tonnes per day, with carbon capture technology to come online in 2026.
Read more:From grey to blue: Air Products plans Europe’s ‘largest’ blue hydrogen plant
Analysis: Why blue hydrogen prevailed in the battle for the 2020s
After all the peaks and troughs of interest in hydrogen as a potential climate solution over recent decades, the 2020s have delivered a sharper focus on the energy carrier’s potential.
With a growing number of national strategies, billions-of-dollars’ worth of subsidies are now being thrown at boosting production, and increasingly stringent carbon policies are encouraging hydrogen’s uptake.
And while much of that energy, momentum and money has gone into green hydrogen, to the delight of some and the dismay of others, blue hydrogen’s role continues to endure as economies attempt to drive towards a green-tinted future.
But blue hydrogen remains contentious. Proponents say it significantly reduces carbon emissions compared with unabated production, while critics argue it extends the life of oil and gas systems. But one way or another it is a production pathway that is now getting serious attention.
Debates surrounding blue hydrogen are multifaceted – reflecting the challenges and uncertainties in the global energy transition. Aside from the potential emissions benefits, the conversations range from economic viability to technological readiness.
But as challenges stack up against green hydrogen and the need to rapidly decarbonise increases, the case for blue is becoming more compelling to a number of large players.
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