Honeywell agrees US$1.8bn acquisition of Air Products’ LNG technology and equipment business

HONEYWELL has agreed to acquire Air Products’ liquefied natural gas (LNG) process technology and equipment business in an all-cash deal worth US$1.8bn. The acquisition will allow Honeywell to provide its customers with end-to-end LNG solutions.

The holistic offering will encompass natural gas pre-treatment and liquefaction, using digital automation technologies available under Honeywell’s Forge and Experion platforms. Honeywell expects it will enable efficient, reliable, and optimised management of natural gas assets.

"While the world continues to build the renewables-based energy infrastructure of the future, natural gas is a critical lower-emission and affordable transition fuel that will help meet ever-increasing and dynamic global energy demands," said Vimal Kapur, CEO and chairman of Honeywell. "This highly complementary acquisition will further strengthen our energy transition portfolio.”

Currently, Honeywell provides a pre-treatment technology for LNG customers to remove contaminants that could cause adverse process effects upstream of liquefaction. Air Products’ LNG process technology and equipment business offers a comprehensive portfolio of complementary technologies, including in-house design and manufacture of coil-wound heat exchangers (CWHE) and related technologies.

LNG plants require cryogenic heat exchangers to liquefy natural gas. Air Products says that CWHEs provide the highest throughput of natural gas in a single exchanger with a small footprint and offers robust, reliable, and safe operations both onshore and offshore.

Seifi Ghasemi, CEO, chairman, and president, of Air Products, said the company is divesting its LNG exchanger technology and equipment business to focus on its two-pillar strategy: to grow its core industrial gas business and related technology equipment; and to be a first-mover in delivering clean hydrogen at scale to decarbonise industry and heavy duty transport.

Ghasemi added: "The LNG business is a great business and at its strongest point in its decades-long history thanks to the outstanding work of our people, and they will be in good hands to advance as part of Honeywell's related portfolio of technologies."

Air Products’ LNG business employs around 475 people. It has headquarters in Allentown, Pennsylvania and a 390,000 ft² manufacturing facility in Port Manatee, Florida that makes CWHEs.

Air Products and Honeywell expect the transaction to close before the end of 2024.

LNG demand is projected to grow, with Shell estimating that annual sales will increase by more than 50% by 2040. Its 2024 LNG outlook reports global trade of 404m t/y in 2023.