AIR PRODUCTS & CHEMICALS MANAGEMENT DISCUSSES Q4 2013 RESULTS - AN EARNINGS CALL TRANSCRIPT
October 29, 2013
Source: MSN Money
{John McGlade stated} Our energy-from-waste business in the Tees Valley 1 project are going very well. I visited the site earlier this year and I was very impressed. We are on schedule, on budget and meeting our safety goals. We remain confident in the business strategy I shared with you when we announced the first Tees Valley project, including the proven on-site business model supported by long-term contracts with firm prices, we do not take the price of volume risk for any of the inputs or outputs of the plant, a clear and compelling market need in the U.K. to reduce waste and create clean and renewable energy, and we have proven expertise in every unit of operation: oxygen production, gasification, syngas clean-up and power generation. With that, we have decided to proceed with the second facility adjacent to the Tees Valley 1 project. The schedule will be optimized to take advantage of project synergies and the Renewable Obligation Credit, or ROC, program. Simon will provide more details, but as a result, we expect Tees Valley 2 to be more profitable than Tees Valley 1.
{Simon Moore stated} We are excited about the progress in our Tees Valley 1 energy-from-waste project and the decision to proceed with the Tees Valley 2 project at the same site. Tees Valley 1 is on budget, meeting our safety goals, and on schedule to begin commissioning in late FY '14, and we expect the plant to be fully onstream in early FY '15. The Tees Valley 2 schedule is optimized to take advantage of project execution and startup synergies, with startup expected in early 2016. The schedule will also allow us to take full advantage of the Renewable Obligation Credit, or ROC, program. We've already secured the key contracts for waste and ROC sales with the same partners at Tees Valley 1, and we're pleased that the U.K. government cabinet office will purchase all the power from Tees Valley 2 under a similar long-term committed price contract.
As a result of the project synergies, the capital cost is roughly 10% lower than Tees Valley 1, and we expect Tees Valley 2 to be more profitable than Tees Valley 1. The 2 projects combined also have very strong asset management opportunities. We're very proud of these projects and the Air Products innovation and expertise that are bringing them to life. These plants offer efficient, clean generation of power from waste. Together, these 2 facilities will create 1,500 construction jobs and 100 permanent jobs, divert as much as 700,000 metric tons of nonrecyclable waste from landfills each year and power as many as 100,000 homes.
Click here to read the full article |
