(PX) Praxair Signs Hydrogen Supply Deal

Praxair Inc. (PX) recently signed a multi-year contract to provide high-purity hydrogen to Hemlock Semiconductor, L.L.C. The financial terms of the transaction were not disclosed.

Hemlock Semiconductor provides high-purity polycrystalline silicon and chlorosilanes for semiconductor and solar ingot/wafer manufacturers.

Under the contract, the company will construct and operate an on-site hydrogen generating facility and also undertake to supply liquid hydrogen to Hemlock Semiconductor’s $1.2 billion polysilicon manufacturing facility. This facility is expected to start in 2012.

The company has also agreed to supply hydrogen to Motiva Enterprises LLC’s refinery in Norco, St. Charles Parish, Louisiana.

With the aim to expand Praxair’s hydrogen pipeline complex at Louisiana, the company has planned to connect it with a new hydrogen plant under construction in St. Charles Parish.

It is anticipated that the expansion of the hydrogen pipeline will be completed by the second quarter of 2012, while the construction work of the plant would be accomplished by the fourth quarter of 2012.

Demand for hydrogen is expected to be strong, primarily driven by its progressive application for refining purposes. Over the period 2010-2015, refining capacity is expected to grow by 2% in US/Europe, 15% in India, 20% in China, 24% in the Middle East, and 25% in Brazil. Praxair has an expectation of a 20% volume growth for hydrogen per annum going forward.

Praxair is engaged in the production and distribution of industrial gases, primarily catering to demands in North America, South America, Europe, and Asia. Prime competitors of the company include Air Products & Chemicals Inc. (APD) and L’Air Liquide SA.

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