Air Products'
damaged Louisiana gas plant may be back by year-end
Sep 20, 2005 - The Morning Call, Allentown, Pa.
Author(s): Kurt Blumenau
Sep. 20--Air Products and Chemicals' wind- and flood-damaged New
Orleans industrial gas plant should be substantially back online by the
end of the year, the company said Monday.
Most of the water has been pumped out of the plant, which makes
liquid and gaseous hydrogen. Early repairs are under way, though the
complex still lacks electricity and natural gas, the company said.
The complex suffered extensive damage from Hurricane Katrina,
according to Air Products. Monday's news marks the company's first full
update on its condition.
"We made a lot of progress last week that allowed us to estimate the
resumption of operations at New Orleans," Joe Pietrantonio, vice
president of operations in the Americas, said in a statement.
The Trexlertown gases and chemicals giant also resumed some
production last weekend at a liquid hydrogen plant in Sarnia, Ontario,
Canada. That plant had been temporarily shut down due to a scheduled
interruption in its gas supply.
The announcements remove some uncertainty from Air Products' liquid
hydrogen operations. The company is one of the two leading makers of
liquid hydrogen, which is used in steelmaking, aerospace and other
industries. Praxair Inc. of Danbury, Conn., is the other.
Hurricane Katrina and the Ontario outage sidelined about 90 percent
of Air Products' production capacity. That sent shock waves through the
steel industry. One small steelmaker laid off 70 people when it cut back
on production, trying to conserve its limited stock of liquid hydrogen.
Air Products said it has met some customer needs with liquid hydrogen
from other sources and geographic areas. Praxair also cranked up
production, selling excess capacity to needy users.
Air Products has declared force majeure, a legal concept that clears
it from liability because an unforeseen event kept it from fulfilling
its contracts. That remains in effect because Air Products' liquid
hydrogen supply will remain "materially constrained and disrupted" for
the next several months, the company said.
The reopening of New Orleans is "a tremendous undertaking with a lot
of unknowns at this point," Pietrantonio said.
Analyst David Begleiter, who follows Air Products for Deutsche Bank,
said Monday's news should reassure investors who wondered about the
status of the New Orleans plant.
"That's probably the main thing, that it removes uncertainty from the
situation," Begleiter said. "The fact that it's not a complete loss is a
positive."
Last week, Begleiter slashed two cents from his earnings-per- share
estimates for the fourth quarter and fiscal year, which end Sept. 30.
Air Products has not given any guidance on hurricane- related costs.
The company said it has accounted for all its New Orleans employees.
It also thanked customers and government agencies, including the Army
Corps of Engineers, for their help.
Air Products stock lost 35 cents per share on the New York Stock
Exchange, closing at $56 per share. Trading volume was average.
© Copyright 2005 NetContent, Inc. Duplication and
distribution restricted.
Visit http://www.powermarketers.com/index.shtml
for excellent coverage on your energy news front.
|