Air Liquide to spend $850 million on oxygen and nitrogen supply in Texas

The industrial gas company Air Liquide has committed to what CEO François Jackow describes as its largest capital expenditure ever: $850 million to build a set of four air separation units that will supply gases to ExxonMobil’s planned low-carbon hydrogen facility in Baytown, Texas.

Air Liquide’s project is designed to produce 9,000 metric tons (t) of oxygen per day. The air separation units will also send up to 6,500 t per day of nitrogen to the oil company for use in ammonia synthesis and other processes. Between scale efficiency, new plant design, and the purchase of renewable power, Air Liquide expects the resulting gases to have a carbon footprint one-third that of most other O₂ and N₂ on the US market.

The sheer scale of the facility also means it will be the largest source of argon in North America and a major supplier of xenon and krypton, Jackow said on a June 24 investor call. Overall, he said, Air Liquide projects annual sales from the site of at least $200 million.

ExxonMobil will use the low-carbon O₂ in a pair of autothermal reformers that will convert methane into carbon dioxide and 2,400 t of hydrogen per day. The oil company plans to use Honeywell International technology to capture 98% of the CO₂ emissions associated with the reformers, up to 19,000 t per day, and inject it into geological storage.

Hydrogen that ExxonMobil doesn’t use on-site to make fuels, fertilizers, and chemicals will be sold to external customers, including through Air Liquide’s pipeline and storage system in the region, Jackow said.

Multiple analysts on the call questioned the timing of Air Liquide’s announcement, which comes before ExxonMobil has made a final investment decision on its hydrogen complex.

“It’s a little bit the chicken and the egg,” Jackow said, “waiting for low-carbon hydrogen to be available in large quantity at an affordable price.” He expressed confidence that the whole project will happen and described Air Liquide’s decision as “a catalyst, an enabler, to decarbonize existing facilities but also allow the installation of new low-carbon production sites on the US Gulf Coast.”