LNG

Swiss company Burckhardt Compression, a specialist provider of LNG sector equipment and energy industry technology, has increased annual profits and sales to record levels as the order intake surged to the equivalent of US$1.4 billion from rising demand to meet the energy transition.

Chart Industries, the US maker of LNG and industrial gases equipment for the energy transition, has just been awarded four liquefaction project orders from four different customers.

Chart said the orders for the smaller scale sector were worth more than $120 million.

Additionally, the Atlanta, Georgia-based company has received releases on engineering work, amounting to limited notice to proceed, on two of the “Big LNG” export plant projects which are expected to proceed to final investment decision in 2022.

Highlights of the four liquefaction project awards include a hydrogen liquefier.

The 15-ton-per-day liquefier will be built in North America with a new hydrogen liquefaction customer.

“This is our fourth hydrogen-helium liquefaction order of the year in 2021 and with those four orders totalling approximately $150M, covering three different geographies and three different customers,” Chart explained.

Liquefaction

The orders also include a 60,000-ton BioLNG liquefaction train and associated equipment.

Chart added that the third order is for a BioLNG facility and associated station infrastructure for 20 BioLNG stations with an established European customer, Verbio.

The fourth order is for a utility-scale LNG liquefaction plant which is an integrated facility and the first in the nation with a hybrid (gas-electric) drive and for a customer in the Northeast US.

Chart added that this customer plans to utilize both natural gas and renewable natural gas (RNG) in this long-duration energy storage solution meeting reliability and environmental targets.

“We are pleased that our hydrogen and LNG liquefaction process technology and equipment capabilities are recognized and utilized globally and across industries,” stated Jill Evanko, Chart’s Chief Executive and President.

“We view this past week’s awards and overall continued broad-based demand as strong indicators that the energy transition is accelerating,” added Evanko.

“These orders give further support to our previously announced 2022 outlook,” stated the CEO. 

French industrial gases company Air Liquide, plans to build an air separation unit (ASU) in the Lingang Economic District of Tianjin Port, the growing centre of Chinese LNG imports for use in the domestic market and by industry.

Air Liquide, whose latest China plans were announced in a statement to the Euronext stock exchange in Paris, has been supplying industrial gases to the Chinese Tianjin industrial basin for many years and operates seven Chinese production facilities.

“With an oxygen production capacity of more than 2,000 tons per day, this ASU will notably allow Air Liquide to support the growth of the chemical and steel industries in the Tianjin basin, secured by a new long-term supply agreement with a major customer,” said the company.

Air Liquide will build, own and operate this new ASU, which has been designed leveraging the group’s latest state-of-the-art technology, for the low-carbon and energy-efficient production of oxygen, nitrogen and argon.

One Air Liquide’s main competitors in China is Air Products, the US company based in Pennsylvania which combines its industrial gas business with its LNG equipment making.

Air Products is the world’s leader in LNG technology and equipment, but is also investing in industrial gas provision in various Chinese provinces.

Air Liquide’s main LNG sector sales are linked to its Turbo-Brayton cryogenic equipment, with around 50 units sold over the last two years.

The technology, developed by Air Liquide and based on the Turbo-Brayton principle, reliquefies LNG boil-off gas on vessels transporting the product, thereby significantly reducing greenhouse-gas emissions during transportation.

Air Liquide now operates nearly 100 industrial gas facilities in China and employs close to 5,000 people with a strong presence in the key coastal industrial areas.

The latest Air Liquide investment in Tianjin, which borders Hebei Province and the Beijing municipality, will incorporate a dedicated capacity to support small-and-medium sized customers of liquid and packaged gases. It is planned to be operational in 2022.

The latest investment will amount to around €60 million ($70M), added the company.

The Chinese operator Beijng Gas is developing more LNG import capacity in Tianjin, which already has two import facilities.

The company’s Nangang import project at Tianjin is currently scheduled to come on line in 2022 with 10 tanks and up to 2 million tonnes of storage.

The Beijing Gas terminal will have an initial 5 million tonnes per annum of LNG capacity and adds to the supply available from Sinopec’s Tianjin North import terminal and the Floating Storage and Regasification Unit (FSRU) capacity deployed in recent years by China National Offshore Oil Corp.

Air Liquide’s China subsidiary currently operates seven ASUs in Tianjin in the industrial gases sector, as well as a network of multi-sourced pipelines that deliver oxygen, nitrogen and hydrogen to adjacent customers.

“One of the most important industrial cities in the country and the largest port in Northern China, Tianjin is a key basin for Air Liquide in China,” explained François Abrial, a member of Air Liquide Group’s Executive Committee supervising the Asia-Pacific region.

“This new investment in the 8th ASU clearly demonstrates our commitment to the long-term partnership we have built with our customers there,” added Abrial.

Air Products, the US global leader in the supply of liquefied natural gas process technology and equipment and the owner and operator of industrial gases projects, has extended the term in office of Chairman, President and Chief Executive Seifi Ghasemi through to September 30, 2025.

Chart Industries, the US supplier of equipment for the industrial gas, energy and liquefied natural gas sectors, also supplies medical oxygen for critical care and had to increase production by over 50 percent to meet continued demand for COVID-19 patients.

This was in addition to lining up LNG fuel products for Royal Dutch Shell and securing its biggest ever industrial gases sale in China.

“All Chart manufacturing locations globally have been deemed essential business by each local and federal government and therefore continue to operate under this status,” said the company in its first-quarter earnings report.

“During March 2020, we increased production on specific medical oxygen related products by over 65 percent in the US and 50 percent in the Czech Republic,” added the Atlanta, Georgia-based Chart.

Additionally, Chart stated that orders for its cryobiological product line used for storage and transport of vaccinations, cell therapy and biological inventory increased by 14 percent to $20.8 million in the first quarter of 2020 when compared to the first quarter of 2019. 

“Typically, my quote would be about the financials and decisive, agile responsiveness during this unprecedented time,” said Chart Chief Executive Jill Evanko.

“The related facts in this release contain that information, but I would like to thank our team members who, as essential personnel, have worked tirelessly and safely to increase production on critical care products that are being used globally to save lives,” stated the CEO.

In its core LNG and industrial gases business Chart’s order backlog of $733M was flat compared with the first quarter of 2019, which included $135M of equipment for US developer Venture Global’s Calcasieu Pass LNG project.

Excluding Calcasieu Pass, backlog increased 6.8 percent year on year.

There was a first-quarter order backlog of $151M for the Distribution & Storage Western Hemisphere division, up 18.7 percent and its highest ever.

Overall, first-quarter orders amounted to $304.3M and were 34 percent less than the prior-year quarter.

The first quarter of 2019 had included the Venture Global Calcasieu Pass order ($135M), Golar’s floating “LNG Gimi” tanker conversion project ($20M) and Niche LNG’s small-scale LNG work ($7M).

In the second of its four divisions, Distribution & Storage Eastern Hemisphere, Chart booked 14 LNG fueling stations, which is the same level as the first quarter 2019.

“Additionally, in April we received verbal commitment from Shell for the supply of seven LNG fueling stations,” said Chart.

“Our teams are currently working toward a multiyear long-term contract whereby Shell will place the order for up to four stations in the second quarter of 2020 and three more in 2021,” the company added.

“The multiyear agreement will allow for expansion of these quantities with privileged support to Shell’s business plans and strategy for LNG in Europe,” stated Chart.

Chart said backlog in China was $68M at the end of the first quarter and subsequently the company received its largest industrial gas order in its history from China in early April, though gave no details.

Chart also received a letter of intent for process technology and associated equipment for Eagle LNG’s Jacksonville project in Florida.

Industrial plant orders of $4.7M were received by its Energy & Chemicals Cryogenics division for retrofitting a refinery with air cooled heat-exchangers.

Chart’s fourth division, called E&C FinFans, recorded its highest orders in the first quarter compared with the previous three quarters, including $23M in the month of March.

“This is specific to air coolers, and we expect fans products to continue to grow year-over-year,” said Chart.

Chart Industries, the US supplier of equipment for the industrial gas, energy and liquefied natural gas sectors, reported an almost 24 percent rise in orders to a record $1.41 billion combining LNG fuel, rail, trucking and plant equipment.

Baker Hughes Co., the energy services provider and LNG equipment supplier, said it expected an increase in liquefied natural project activity as it posted solid third-quarter results and more contract wins since regaining its independence from General Electric.

Chart Industries, the US LNG and industrial gases equipment provider, has priced its underwritten public offering of 3.5 million shares at $73.50 per share to fund a portion of the purchase price of its pending acquisition of Harsco Corp.’s Industrial Air-X-Changers business.

Chart has also granted the underwriters a 30-day option to purchase up to an additional 525,000 shares.

The company estimates that the net proceeds of the offering will be around $248.8 million, or $286.3M if the option to purchase additional shares by the underwriters is exercised in full, after deducting underwriters discounts and commissions and transaction expenses.

Chart’s shares were last trading on June 12 at $74.55 on the Nasdaq global stock exchange, valuing the company at $2.37 billion.

J.P. Morgan Securities, Credit Suisse Securities (USA) and Morgan Stanley & Co. acted as joint lead book-running managers for the offering and Evercore Group and Wells Fargo Securities will act as book-running managers.

Chart’s previously arranged financing consists of a revolving credit facility and a new term loan, both of which were over-subscribed by banks keen to lend.

The share offering was closing on June 14, concurrent with the finalization of the commitment from banks for $1.1 billion in credit facilities.

Chart said the acquisition of Harsco’s Air-X-Changers business was now expected to close on July 1.

“While our proposed offering of common stock was significantly over-subscribed, the associated pricing was at the lower end of our anticipated range,” said Chart Chief Executive Jill Evanko.

“We decided to size the offering to a level that would meet the needs of the business and support our growth and profitability objectives, while also acting in the interest of current shareholders by reducing anticipated dilution,” the CEO explained.

Chart, based in the outskirts of Atlanta, Georgia, agreed in May 2019 to take over Harsco in its fourth acquisition in two years as it continues to receive LNG orders for key equipment.

The Harsco AXC business specializes in gas compression coolers.

The company reiterated its full year 2019 sales forecast of between $1.41 billion and $1.46Bln.

The guidance assumes LNG project revenue in 2019 from the Venture Global Calcasieu Pass and “Golar Gimi” LNG production hull projects of $28M to $30m, subject to project timing.

Harsco AXC is projected to generate net sales of around $260M in 2019, and a 23 percent gross earnings margin as a percentage of sales.

The Chart acquisition is the fourth in the past two years after other takeovers in the US and Europe.

Chart first expanded its business in 2017 by acquiring German company VCT Vogel, a servicer of cryogenic and mobile gas tank equipment and trucks and a European leader in truck-mounted drive and control systems.

The takeover of the German company followed its $410M cash purchase of smaller US sector rival Hudson Products for its range of air-cooled heat exchangers and axial flow cooling fans for the refining, petrochemical and natural gas markets.

Then in September 2018, Chart agreed to acquire Italian company VRV S.p.a., an engineer and designer of cryogenic equipment whose offerings also complement Chart’s products.

The Harsco group has said that the proceeds from selling its Harsco AXC gas compression subsidiary would be used to pay debts and provide the parent company with additional financial flexibility to its transformation into an environmental solutions operator.

Chart Industries, the US LNG and industrial gases equipment provider, is planning an underwritten public offering of 4.9 million shares to fund a portion of the purchase price of its pending acquisition of Harsco Corp.’s Industrial Air-X-Changers business.