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With the Witness of Presidents of China and the US, Yankuang Group and Air Products (“AP”) signed Investment and Cooperation Agreement with Contract Amount USD3.5 billion

On November 2017, with the common witness of President Xi Jinping and US president Donald Trump, chairman of Yankuang Group Li Xiyong and chairman, president and CEO of AP SeifiGhasemi signed Investment and Cooperation Agreement regarding Phase I Next Stage Project of Indirect Coal Liquefaction (“Next Stage CTL Project") of Shaanxi Future Energy Chemicals Co., Ltd. (“Shaanxi Future Energy”) in Yulin, which was one of the major achievements in China-US economic and trade co-operations during president Trump's state visit to China. According to the agreement, AP proposed to invest USD3.5 billion (approximately RMB23 billion) to build the next stage CTL project with Yankuang.

It was agreed that Shaanxi Future Energy, a subsidiary of Yankuang Group, and AP planned to establish a Joint Venture with AP as the majority shareholder, to set up, manage and operate a full unit for air separation, gasification and syngas purification and supply gas for Shaanxi Future Energy. It was expected that the daily oxygen production would be 40,000 tons to satisfy the syngas production capacity of 2,500,000 normal cubic meters per hour. According to a long-term site power supply agreement with AP, Shaanxi Future Energy would supply coal, steam and electricity and obtain syngas.

Presently, with the 12,000 tons oxygen per day supplied by AP for Phase I project of Shaanxi Future Energy, adding 4 million tons liquid fuel oil annually and downstream chemicals in Phase II project, comprehensive production facility of Shaanxi Future Energy in Yulin will be one of the largest bases for CTL and chemicals production.

AP is a global leading industrial gas supplier with advanced technology in air separation, hydrogen and LNG production. AP has cooperated with Shaanxi Future Energy in Phase I Indirect Coal Liquefaction project for annual production of 1.15 million tons oil products with the air separation device built and operated by AP supplying 12,000 tons oxygen per day for downstream chemical device.

The Phase I next stage project, with total investment amounting to RMB77.7 billion and applying large-scale high and low temperature Fischer-Tropsch (“F-T”)synthesis multi-production licensed technology independently developed by Yankuang Group, will produce approximately 4 million tons prime oil products and high-end chemicals annually. Upon completion of this project, it is expected that the annual sales revenue and tax paid will be RMB30 billion and RMB8 billion, respectively. The multiple industrial clusters including ultra clean oil, plastics and rubber, chemicals featuring F-T will be taken shape in northern Shaanxi, which has great significance to expanding new pattern of economic cooperation between China and US, promoting bi-investment and open-up and enhancing cooperation in regional investment.

Chairman Li Xiyong pointed out that this project was of significant importance to formation of a complete and independently-developed indirect coal liquefaction technology, which would inevitably enhance our competitiveness in indirect coal liquefaction industry and thus present mutual development and complementary advantage sharing between chemical and petro-chemical industry.

SeifiGhasemi said:"AP is pleased to announce that we have achieved further major progress with one of China's largest energy enterprises on the solid foundation of previous cooperation with Yankuang. The new agreement confirms the trust from Yankuang, which derives from our reliable gas supply service in Phase I project". "This is an excellent case in AP's strategy, which will distribute cash to world-class industrial gas project to achieve profitable growth."