Air Products and Chemicals, Inc. -- American Chemical Society Luncheon

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Air Products and Chemicals, Inc. -- American Chemical Society Luncheon Powered By Docstoc
					Scott Sherman

Vice President, Energy and Process Industries

American Chemical Society Luncheon – September 2005

Forward-looking Statements
The forward-looking statements contained in this release are based on current expectations regarding important risk factors. Actual results may differ materially from those expressed. Factors that might cause forward-looking statements to differ materially from actual results include those specifically referenced as future events or outcomes that the company anticipates, as well as, among other things, overall economic and business conditions different than those currently anticipated and demand for Air Products’ goods and services during that time; competitive factors in the industries in which it competes; interruption in ordinary sources of supply; the ability to recover unanticipated increased energy and raw material costs from customers; uninsured litigation judgments or settlements; changes in government regulations; consequences of acts of war or terrorism impacting the United States’ and other markets; charges related to currently unplanned portfolio management and cost reduction actions; the success of implementing cost reduction programs; the timing, impact and other uncertainties of future acquisitions or divestitures; significant fluctuations in interest rates and foreign currencies from that currently anticipated; the impact of tax and other legislation and regulations in jurisdictions in which Air Products and its affiliates operate; the impact of new financial accounting standards, including the expensing of employee stock options; and the timing and rate at which tax credits can be utilized.

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American Chemical Society Luncheon – September 2005

World Energy is Global Growth Business
MBDOE 160 120 80 40 Existing Production 0 1980 1985 1990 1995 2000 2005 2010 2015
American Chemical Society Luncheon – September 2005

World Demand

World Energy Investment, 2001-2030 $530 Billion Investment / Year Oil 19% Gas 19%

Required New Production Existing Field Decline ~4-6%

Coal 2%

Electricity 60% $16 Trillion
(Source: IEA)

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APD’s Broadening Business Portfolio . . .
Capturing Global Energy Growth Opportunities
Hydrogen Refinery Hydrogen Transportation Fuels Production (H2) Hydrogen/Electricity Economy Power Generation Cogen Assets Gasification O2 Enhanced Combustion Hydrocarbon Recovery Oil Recovery Oil Sands (H2) N2 for EOR Remote Natural Gas GtL LNG

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American Chemical Society Luncheon – September 2005

World Primary Energy Consumption
(quadrillion Btu)

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American Chemical Society Luncheon – September 2005

50% of Global Natural Gas Reserves are Remote

Russia Russia

Algeria Algeria Trinidad Trinidad Egypt Egypt Nigeria Nigeria Venezuela Venezuela Remote Remote Natural Gas Natural Gas

Iran Iran Qatar Qatar Malaysia Malaysia Indonesia Indonesia Australia Australia

Chile Chile
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Source: APD, IEA Source: APD, IEA

American Chemical Society Luncheon – September 2005

Projected Liquefaction Capacity 2010

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American Chemical Society Luncheon – September 2005

LNG Market: Remote Gas to Industrialized Nations
The landscape today: the LNG industry is on the verge of a major expansion

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American Chemical Society Luncheon – September 2005

LNG Market: Remote Gas to Industrialized Nations
The landscape in 2010: the LNG industry has grown to a new scale

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American Chemical Society Luncheon – September 2005

Atlantic LNG Volume to TRIPLE by 2010
Millions of tons/year
250 200 150 100 50 0

55% Pacific

70% Pacific 30% Atlantic

45% Atlantic

2002

2010(e)

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American Chemical Society Luncheon – September 2005

U.S. Natural Gas Production, Consumption, and Net Imports, 1970-2025 (trillion cubic feet)

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American Chemical Society Luncheon – September 2005

Current U.S. LNG Import Terminals

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American Chemical Society Luncheon – September 2005

LNG Facilities in North America— Existing and Proposed (September 2004)
Prince Rupert

Existing Proposed Approved

Kitimat

Port Westward

Gros Cacouna

Canaport Rabaska Quoddy Bay Everett

Bear Head Strait of Canso SomersetKeltic Petrochemical LNG Northeast Gateway Weavers Cove Keyspan LNG

Jordan Cove

Platform Grace Cabrillo Port Coronado Islands Sonora Pacific

Long Beach Energia Costa Azul

Crown Landing Cove Point

Source: Cambridge Energy Research Associates. 40302-3 072804

Elba Lake Island Charles Port Arthur Sabine Cameron Compass Port Freeport Main Pass Corpus Christi Energy Energy Hub Brownsville Bridge Bahamas Altamira Port Pelican Vermilion Pearl 179 Lazaro Crossing Cardenas Gulf Landing

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American Chemical Society Luncheon – September 2005

APD, the Heart of the LNG Liquefaction Train
APCI’s offerings in the LNG Value Chain

Pipeline gas Distribution

Power Generation Production
APD supplies N2 offshore systems for oil and gas recovery

Liquefaction
APD provides the heart of the LNG liquefaction plant: LNG process Key equipment APCI provides small nitrogen generators

Shipping
APD provides Shipboard membrane systems to deliver dry nitrogen

Regasification
APD provides N2 plants for BTU adjustment APD utilized LNG refrigeration for making industrial gases Provide operating and maintenance services

Distribution & Use

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American Chemical Society Luncheon – September 2005

Novel AP-X® LNG Equipment & Process
Novel, patented process
1. Uses a combination of APCI’s proven process technologies to achieve a value added result
● ● Increases World Scale Capacity 50% Helps to Reduce Cost of Landed LNG

2. Builds Upon APCI Engineering & Manufacturing Competencies
● ● ● ● Main Cryogenic Heat Exchanger – Proprietary Design Nitrogen Subcooler – Similar to MCHE Companders –APCI Competence for last 60 years Cold Boxes – Founding Competence of APCI

3. Single Train
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American Chemical Society Luncheon – September 2005

Helping to Change the LNG Industry
LNG Train Size Growth
8 7 6

AP-X® Liquefaction 150% World Scale • 8 MM TPA Capacity • Extends Leadership Six (6) AP-X® LNG Process & Equipment Orders, AP-X becomes the new industry standard • Selected by Exxon-Mobil and Qatar Petroleum, QG II • Accepted by Total, QG II • Accepted by Conoco Phillips, QG III • Accepted by Shell, QG IV

Train Size, MTA

> 50% increase in train size

5 4 3 2 1 0 1960 1970 1980 1990 2000 2010

Date of Commissioning
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American Chemical Society Luncheon – September 2005

AP-X® LNG Provides Higher Capacity
Traditional: 1 Equipment Item Proprietary Process Technology AP-X® LNG: 8 Equipment Items Newly Patented Process Technology

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American Chemical Society Luncheon – September 2005

Strong Supply to Keep Pace with Demand
LNG Market Supply Growth
200 180 160 140 120 MMTPY
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100 80 60 40 20 0 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008

American Chemical Society Luncheon – September 2005

Relentless Pursuit of Productivity
10 KWH per Kg-mole 9 8 7 6 5 4 1970
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1980

1990

2000

2010

Date of Commissioning
American Chemical Society Luncheon – September 2005

Minimum Regional LNG Trigger Prices (2003 dollars per thousand cubic feet)

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American Chemical Society Luncheon – September 2005

Transforming the LNG Market
Worldwide LNG Demand Expected to Double by 2010 Significant Increase in Receiving Terminals in US, Europe, and China − More LNG capacity will be required − Other opportunities APD Provides the Heart of the LNG process Proprietary AP-X™ Technology Helps Make Imported LNG Viable − Production Increase − Cost Savings 10 New Main Exchanger Orders in Backlog
American Chemical Society Luncheon – September 2005

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thank you

American Chemical Society Luncheon – September 2005