L'Air Liquide (AI) Investor Update summary

Project Overview and Strategic Significance

• Up to $850 million will be invested to build, own, and operate four large modular air separation units in Baytown, Texas, under a long-term agreement with ExxonMobil, marking the largest industrial CapEx in company history.

• The project will supply 9,000 metric tons/day of oxygen and up to 6,500 metric tons/day of nitrogen, supporting ExxonMobil’s Baytown hydrogen project and enabling the largest low-carbon hydrogen platform globally.

• Oxygen production capacity in the Americas will increase by 50%, launching the largest oxygen platform in the region and supporting industrial decarbonization.

• The platform will enable low-carbon hydrogen and ammonia production, CO₂ capture, and sequestration, supporting ExxonMobil’s decarbonization goals.

• Aligns with the company’s ADVANCE strategy and was included in the project backlog, with staged reporting of investment.

Financial and Operational Details

• The $850 million CapEx is not subsidized and covers all necessary equipment and construction for the air separation units.

• Expected to generate $200–$250 million in annual turnover, consistent with the company’s capital intensity benchmarks.

• Long-term contract includes monthly fees, take-or-pay clauses, and meets return on capital employed (ROCE) criteria.

• Project execution will take close to four years, longer than typical projects due to its scale.

• The investment decision depends on ExxonMobil's project progress, government policy, regulatory permits, and market conditions.

Environmental Impact and Capacity

• Project aims to reduce CO₂ emissions by 7 million tons per year, supporting capture and permanent storage.

• Achieves a two-thirds reduction in CO₂ footprint per ton of oxygen produced by using low-carbon electricity and innovative technology.

• The air separation units will consume 25% less electricity per tonne of oxygen and be primarily powered by renewable and low-carbon energy.

• Project execution leverages existing pipeline and storage infrastructure to distribute low-carbon hydrogen and other gases.

• Provides access to competitively priced low-carbon hydrogen, supporting both existing and new customer needs.