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Linde (LIN) to Supply Clean Hydrogen to OCI's Texas Plant

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Linde plc (LIN - Free Report) entered an agreement to invest $1.8 billion to supply clean hydrogen to OCI’s blue ammonia facility in Texas.

Linde will supply OCI with clean hydrogen by capturing more than 1.7 million metric tons of carbon dioxide emissions per year once the facility goes online in 2025. The complex will be integrated into Linde’s existing gas infrastructure on the U.S. Gulf Coast.

Linde will develop, own and operate an on-site complex at the OCI facility, which will include auto thermal reforming, a process to produce low-carbon hydrogen with carbon capture. The facility will also include a massive air separation plant.

The agreement has been signed as the world seeks low-carbon sources to meet energy requirements and reduce emissions. Per the International Renewable Energy Agency, ammonia production makes up about 15-20% of carbon dioxide emissions from the chemical sector. However, low-carbon ammonia production methods, such as using blue hydrogen, can reduce emissions.

Linde will also utilize its pipeline network to provide clean hydrogen to its customers in the Gulf Coast area looking to decarbonize their operations while also supplying atmospheric and rare gases.

Linde’s capabilities are enabling the transition to a low-carbon-intensity economy. In 2022, Linde signed multiple deals to develop clean hydrogen projects amid pressure to reduce emissions and scale up renewables to meet the EU’s net-zero emission goal by 2050.

Price Performance

Shares of Linde have outperformed the industry in the past three months. The stock has gained 7.6% compared with the industry’s 6.8% growth.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Zacks Ranks & Stocks to Consider

Linde currently carries a Zacks Rank #3 (Hold).

Some better-ranked players in the basic materials space are Commercial Metals Company (CMC - Free Report) , Agnico Eagle Mines Limited (AEM - Free Report) and Nucor Corporation (NUE - Free Report) , currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Commercial Metals Company manufactures, recycles, and markets steel and metal products, and related materials and services. CMC repurchased shares worth $1.3 million in the quarter under review. It returned $49.1 million of cash to shareholders in the fiscal first quarter. As of Nov 30, 2022, $139 million remained under the current share buyback authorization.

Commercial Metals Company has witnessed upward estimate revisions for 2023 earnings in the past 30 days. CMC beat the Zacks Consensus Estimate for earnings in the prior four quarters, delivering an earnings surprise of 17.7%.

Agnico is a gold producer with mining operations in Canada, Mexico and Finland, and exploration activities in Canada, Europe, Latin America and the United States. The integrated entity is expected to have $2.3 billion of available liquidity, a mineral reserve base of 48 million ounces of gold, which has doubled over the last decade and an extensive pipeline of development and exploration projects to drive sustainable, low-risk growth.

Agnico has witnessed upward estimate revisions for 2023 earnings in the past 30 days. In the prior four quarters, Agnico beat the Zacks Consensus Estimate for earnings thrice and missed the same once, delivering an earnings surprise of 26.4%.

Nucor is a leading producer of structural steel, steel bars, steel joists, steel deck and cold-finished bars in the United States. Nucor envisions operating income from its three business segments to rise sequentially in the first quarter of 2023.

Nucor Corporation has witnessed upward estimate revisions for 2023 earnings in the past 30 days. NUE beat the Zacks Consensus Estimate for earnings in the prior four quarters, delivering an earnings surprise of 7.7%.

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