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Air Products, Yankuang team up for $3.5bn coal-to-syngas production facility in China

US-based Air Products has signed an agreement with Yankuang Group, a China-based state-owned-enterprise, to jointly invest and develop $3.5bn coal-to-syngas production facility in Yulin City, Shaanxi Province, China.

Under the terms investment cooperation agreement, Air Products and Yankuang Group subsidiary Shaanxi Future Energy Group (SFEC) will form a joint venture company for the development of the facility, which will have production capacity of 4 million tons/year of liquid fuels and downstream chemicals.

Signed in the Great Hall of the People, the agreement is part of the Trade Mission to China led by the US Department of Commerce.

The joint venture, which will be majority owned by Air Products, will be responsible for the construction and operation of an air separation, gasification and syngas clean-up system to supply the SFEC site.

The air separation units will be designed to produce approximately 40,000 tons-per-day (TPD) of oxygen, which will support the production of about 2.5 million nm3/hour of syngas.

SFEC will be responsible for the supply of coal, steam and power. It will also receive syngas under a long-term contract.

The project's phase 2 will be an addition to the SFEC’s phase 1 project in Yulin. The phase 1 project currently receives 12,000 TPD of oxygen from Air Products as part of a deal signed earlier.

Air Products chairman, president and CEO Seifi Ghasemi said: “Air Products is delighted to announce this significant expansion of our already strong relationship with one of China’s largest energy companies.

“It is another excellent example of Air Products’ strategy to grow profitably by deploying capital into world-scale industrial gas projects.”

Air Products said that the new project will make the complex one of the largest coal to fuel and chemicals facilities in China.

The coal-to-syngas production facility is scheduled to be commissioned in 2021.

In 2016, Air Products said it will close its struggling energy-from-waste (EfW) business, following the company’s failure to fix operational and design issues.

Image: Air Products' corporate headquarters located in Pennsylvania, US. Photo: Image courtesy of Air Products and Chemicals, Inc.