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Air Products (APD) Inks Deal for $5B Green Hydrogen Project

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Air Products and Chemicals, Inc. (APD - Free Report) inked a deal with ACWA Power and NEOM for a $5-billion green hydrogen-based ammonia manufacturing facility, powered by renewable energy.

The project, which Air Products will own equally with ACWA Power and NEOM, will be situated in northwestern Saudi Arabia and is expected to produce green ammonia for export in global markets.

Scheduled to be onstream in 2025, the project is NEOM’s first partnership with leading international and national partners in the renewable energy field.

The joint venture is based on world-class technology and will include the innovative integration of more than four gigawatts of renewable power from solar, wind and storage.

Notably, the project will produce 650 tons of hydrogen per day by electrolysis using Thyssenkrupp technology, nitrogen by air separation using Air Products’ technology, and 1.2 million tons per year of green ammonia using Haldor Topsoe technology.

Air Products will be the exclusive off-taker of the green ammonia. Further, the company stated that it plans to transport it globally to produce green hydrogen for the transportation market.

Per Air Products’ management, the project will yield a totally clean source of energy on a massive scale and will save more than three million tons of carbon dioxide emissions a year. It will also eliminate smog-forming emissions and other pollutants from the equivalent of more than 700,000 cars.

The company’s shares have gained 17.3% in the past year against the industry’s 9.5% decline.

 

 

In April, Air Products withdrew its earnings guidance for 2020 due to the unknown duration and impacts of the coronavirus pandemic. The company also did not provide earnings guidance for the fiscal third quarter due to uncertainties. Air Products expects declines in the Americas and EMEA merchant volumes to sustain in the fiscal third quarter.

Air Products and Chemicals, Inc. Price and Consensus

 

Zacks Rank & Other Stocks to Consider

The company currently carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks in the basic materials space are AngloGold Ashanti Limited (AU - Free Report) , Sandstorm Gold Ltd (SAND - Free Report) and Harmony Gold Mining Company Limited (HMY - Free Report) .

AngloGold has a projected earnings growth rate of 109.9% for the current year. The company’s shares have surged around 68% in a year. It currently has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Sandstorm Gold has a projected earnings growth rate of 55.6% for the current year. The stock has gained around 81% in a year. It currently has a Zacks Rank of 2.

Harmony Gold has an expected earnings growth rate of 264.3% for 2020. The company’s shares have gained 113.1% in the past year. It is presently a Zacks #2 Ranked player.

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