Air Products and Chemicals Inc. (APD) and Yara International ASA (YARIY) are joining forces on an ambitious plan to funnel low-emission ammonia from major production sites in Louisiana and Saudi Arabia into Yara's global distribution network. The goal? Make final commercial decisions by 2026 and tap into European demand for cleaner industrial gases.
The partnership leverages Air Products' expertise in low-emission hydrogen production alongside Yara's capabilities in ammonia production, shipping infrastructure, and terminal operations. Europe figures prominently as a target market, where regulatory pressure and corporate sustainability commitments are driving demand for lower-carbon alternatives.
The Louisiana Project: Big Numbers, Long Timeline
Air Products is developing what it calls the Louisiana Clean Energy Complex, a facility designed to crank out more than 750 million standard cubic feet per day of low-carbon hydrogen while capturing 95% of the CO2 produced during operations. The companies are targeting final investment decisions by mid-2026, assuming they can secure necessary air permits and lock down construction contracts. If everything goes according to plan, the facility should be operational by 2030.
The financial structure is interesting: Yara would eventually purchase the ammonia production, storage, and shipping assets after performance benchmarks are hit, paying roughly 25% of the total project cost. The companies estimate the full tab at somewhere between $8 billion and $9 billion.
Air Products would retain ownership of the industrial gas production equipment and supply approximately 80% of the site's hydrogen output to Yara under a 25-year supply agreement. That hydrogen would support production of 2.8 million metric tons of low-carbon ammonia each year. The remaining hydrogen production would flow to other Gulf Coast industrial customers through Air Products' 700-mile hydrogen pipeline network.
The facility is also expected to capture about five million metric tons annually of high-purity CO2, which would be sequestered by a third-party operator under a long-term agreement that hasn't been announced yet.
Saudi Arabia's NEOM Project Nearly Ready
Meanwhile, the NEOM Green Hydrogen Project in Saudi Arabia is more than 90% complete and on track to begin commercial production in 2027. Air Products will be the sole offtaker for up to 1.2 million metric tons per year of renewable ammonia from that facility.
The two companies expect to finalize a marketing and distribution agreement during the first half of 2026. Under that arrangement, Yara would sell volumes that Air Products doesn't move as renewable hydrogen in Europe, earning a commission on those sales.
APD Price Action: APD shares traded 9.36% lower at $236.30 on Monday following the announcement.
