Air Products Exits Louisiana Clean Energy Project
Air Products announced it will not proceed with the Louisiana Clean Energy Complex project. The LCEC project exit and other portfolio actions will result in a pre-tax charge in Air Products' fiscal third quarter. Air Products also announced it is finalizing a marketing and distribution agreement with Yara International ASA for renewable ammonia from the NEOM Green Hydrogen Project in Saudi Arabia. This announcement that Air Products will not move forward with the LCEC is based on expected financial returns not meeting stringent return criteria. Air Products remains committed to growing profitably in Louisiana, where it operates 18 industrial gas facilities across the state and the world's largest hydrogen pipeline network, reliably serving numerous refinery customers along the U.S. Gulf Coast. Air Products will record pre-tax charges not expected to exceed $2.9B (or approximately $2.2B on an after-tax basis) in its fiscal 2026 third quarter, primarily to write down assets and terminate contractual commitments, primarily related to the LCEC project decision. In addition, Air Products will discontinue a zero-carbon liquid hydrogen facility in Casa Grande, Arizona and other smaller scale projects supporting clean energy distribution. These exits are being driven by challenging commercial conditions, project-specific economic factors, and slower-than-expected development in certain markets, largely hydrogen for mobility. The company will maximize the redeployment of certain assets to existing or future projects and work to reduce the exposure of existing contractual agreements. Additional financial information related to these actions will be provided in Air Products' fiscal third quarter earnings release. Estimated contract cancellation and other project cancellation costs are subject to further refinement and may ultimately differ materially from actual costs recorded in the company's fiscal third quarter and beyond.
