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Air Products (APD) to Buy Uzbekistan Gas-to-Syngas Plant for $1B

Air Products and Chemicals, Inc. APD recently announced a $1 billion investment deal with the Government of the Republic of Uzbekistan and Uzbekneftegaz JSC ("UNG") to acquire, own and manage a natural gas-to-syngas processing facility in Qashqadaryo Province, Uzbekistan.

The state-owned energy company UNG’s multibillion-dollar gas-to-liquid (GTL) facility is one of the most cutting-edge energy plants in the world. It includes a natural gas-to-syngas industrial complex that converts natural gas into synthetic fuels with a high added value for domestic use and possibly export.

Air Products will purchase, own and operate two large-scale air separation units, two large-scale auto-thermal reforming units and a hydrogen production unit within the Uzbekistan GTL complex under the terms of the purchase agreement, which is fully aligned with Air Products' leading on-site business model. Air Products will additionally provide oxygen, nitrogen, hydrogen and syngas to UNG under a long-term, take-or-pay/fixed fee contract. The natural gas and utilities besides all product offtake will be provided by UNG.

The company will use its best-in-class operational and supply expertise for this strategic acquisition in Uzbekistan, a country with a high pace of economic growth and strong government support. The Republic will be able to meet its expanding energy production and societal needs by leveraging UNG's seamless manufacturing of low-cost, high-purity fuels. APD is optimistic about the potential opportunities in Uzbekistan and the Central Asian area and looks forward to capitalizing on this long-term, sustainable collaboration.

Shares of APD have gained 9.2% over the past year against 13.9% decline of its industry.

Zacks Investment Research
Zacks Investment Research


Image Source: Zacks Investment Research

Air Products expects full-year fiscal 2023 adjusted earnings per share of $11.30-$11.50, indicating 10-12% year-over-year growth. For the third quarter of fiscal 2023, the company expects adjusted earnings per share in the range of $2.85-$2.95, suggesting a rise of 10-14% from the year-ago quarter.

Air Products and Chemicals, Inc. Price and Consensus

Air Products and Chemicals, Inc. price-consensus-chart | Air Products and Chemicals, Inc. Quote

Zacks Rank & Key Picks

Air Products currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks to consider in the basic materials space include Koppers Holdings Inc. KOP, AngloGold Ashanti Limited AU and Linde plc LIN. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Koppers currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for current-year earnings for KOP is currently pegged at $4.40, implying year-over-year growth of 6.3%. It has a trailing four-quarter earnings surprise of roughly 13.64%, on average. KOP has gained around 10.8% in a year.

AngloGold Ashanti currently carries a Zacks Rank #1. The Zacks Consensus Estimate for AU’s current-year earnings has been revised 22% upward in the past 60 days. The consensus estimate for current-year earnings for AU is currently pegged at $1.94, suggesting year-over-year growth of 50.4%. AngloGold Ashanti’s shares have surged roughly 31.8% in the past year.

Linde currently carries a Zacks Rank #2. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 3.8% upward in the past 60 days. Linde beat the Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 6.9% on average. LIN’s shares have gained roughly 8% in the past year.

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