Air Products said today that it is no longer pursuing a 1.4 GW, $4bn green hydrogen project in Wilbarger County, Texas.
The project never reached FID as it did not meet the company’s established guidelines for low-carbon projects. The development rights have been sold to AES, according to an investor presentation.
Air Products and AES announced the project in late 2022, saying the electrolyzer capacity would have been capable of producing over 200 metric tons per day of green hydrogen, making it the largest green hydrogen facility in the United States.
The Texas facility was targeted to begin commercial operations in 2027. Air Products would have been the exclusive off-taker and marketer of the green hydrogen under a 30-year contract.
CEO Seifi Ghasemi said on an investor call today that the company would not take FIDs on additional clean hydrogen projects until its ongoing projects are at least 75% committed.
The position appears to be a response to pressure from activist investors D.E. Shaw and Mantle Ridge, hwo have both take large equity stakes and have begun engaging with the company over its capital allocation strategy as well as a succession plan for Ghasemi, who is 80 years old.
D.E. Shaw last month published a detailed presentation critiquing Air Products’ capital allocation and governance strategies.
The company is still bullish on the prospects for clean hydrogen and ammonia, Ghasemi said, and is advancing several major clean hydrogen projects around the world.
Its NEOM Green Hydrogen Project – the first large-scale green hydrogen project to take FID – is 60% complete, with first delivery expected in early 2027, the presentation notes. Take-or-pay commitments are in place for 35% of the plant’s output.
Air Products’ Canada Net-Zero Hydrogen Energy Project is under construction and 60% of the facility’s offtake is committed. The $7bn Louisiana Clean Energy Complex is also under construction, and the company is in active discussions with offtake and equity partners.
