Key Takeaways
- Air Products (NYSE: APD) has announced it will not proceed with the Louisiana Clean Energy Complex (LCEC) project, citing expected financial returns that did not meet the company's return criteria.
- The LCEC exit and related portfolio actions will result in pre-tax charges not expected to exceed $2.9 billion (approximately $2.2 billion after tax) in Air Products' fiscal 2026 third quarter, primarily to write down assets and terminate contractual commitments.
- Air Products will also discontinue a zero-carbon liquid hydrogen facility in Casa Grande, Arizona, and other smaller clean energy distribution projects, citing challenging commercial conditions and slower-than-expected hydrogen mobility market development.
- Separately, Air Products and Yara International ASA (OSE: YAR) are finalizing a marketing and distribution agreement for renewable ammonia from the NEOM Green Hydrogen Project in Saudi Arabia — the world's first large-scale renewable ammonia plant.
- Air Products continues to operate 18 industrial gas facilities in Louisiana and the world's largest hydrogen pipeline network, serving refinery customers along the U.S. Gulf Coast.
Air Products Will Not Proceed With Louisiana Clean Energy Complex
Air Products (NYSE: APD) has announced it will exit the Louisiana Clean Energy Complex (LCEC) project, citing expected financial returns that did not meet the company's stringent return criteria. The decision ends the company's planned development of the large-scale clean energy facility in Louisiana, though Air Products says it remains committed to its existing operations in the state, where it runs 18 industrial gas facilities and operates the world's largest hydrogen pipeline network serving refinery customers along the U.S. Gulf Coast.
Up to $2.9 Billion in Pre-Tax Charges in Fiscal Q3 2026
The LCEC exit, along with other portfolio actions, will result in pre-tax charges not expected to exceed $2.9 billion — approximately $2.2 billion on an after-tax basis — in Air Products‘ fiscal 2026 third quarter. The charges primarily relate to asset write-downs and the termination of contractual commitments associated with the LCEC decision.
In addition to the LCEC exit, the company will discontinue a zero-carbon liquid hydrogen facility in Casa Grande, Arizona, and other smaller-scale projects that had been developed to support clean energy distribution. Air Products cited challenging commercial conditions, project-specific economic factors, and slower-than-expected growth in certain markets — particularly hydrogen for mobility — as the drivers of these decisions. The company says it will seek to redeploy certain assets to existing or future projects and work to reduce exposure under existing contractual agreements. Final costs may differ materially from current estimates.
Yara Agreement for NEOM Renewable Ammonia Proceeds Independently
Separately from the LCEC exit, Air Products and Yara International ASA (OSE: YAR) are finalizing a marketing and distribution agreement for renewable ammonia produced at the NEOM Green Hydrogen Project in Saudi Arabia. The agreement is described as independent of the LCEC decision and will enable ammonia from what the company describes as the world's first large-scale renewable ammonia plant to be sold and delivered worldwide through Yara's global supply chain.
Yara is one of the world's largest producers and distributors of nitrogen-based fertilizers, and the NEOM ammonia supply agreement connects the Saudi green hydrogen project to established agricultural and industrial markets through Yara's existing distribution network. Air Products says additional financial detail related to the portfolio actions will be provided in its fiscal third quarter earnings release.
