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53 min ago 3 min read
Industrial gas major Air Products has abandoned its planned 1,700-tonne-per-day blue hydrogen project in Louisiana, resulting in a $2.9bn write-down that will impact its third-quarter financials.
In addition to the Louisiana project, Air Products will also shut down its liquid hydrogen facility in Arizona, among other smaller-scale projects.
Air Products said the move was based on expected financial returns not meeting its “stringent return criteria”.
The Louisiana project was initially expected to be operational in 2026 but was to late 2028 or early 2029.
Originally budgeted at $4.5bn, the project’s costs had ballooned dramatically to $9bn.
In December, Air Products had looked set to proceed with the blue hydrogen plant after revealing it is in with global fertiliser firm Yara, which is also in talks to buy ammonia volumes from the 2.2GW Neom project.
However, Yara said that it will not proceed with the acquisition of ammonia assets at the project and will instead redirect capital to other US ammonia investments offering stronger returns.
Air Products had been facing investor scrutiny for stretching the industrial gas major’s capital allocation and exposing it to elevated execution risk, as it planned to handle downstream carbon dioxide (CO2) sequestration and ammonia synthesis.
The companies said that they are “finalising” a marketing and distribution agreement to see Yara of green ammonia from the 2.2GW Neom Green Hydrogen project in Saudi Arabia.
In May 2025, after taking over from former CEO Seifi Ghasemi, who was ousted by investors amid concerns over the firm’s risk exposure on high-capex clean hydrogen projects, current CEO Eduardo Menezes halted spending on the project.
The company will redeploy certain assets to other existing or future projects and reduce exposure to existing contractual commitments.
Rising construction costs and tightening EPC capacity were previously cited as key barriers to the project, with competition from data centre developments contributing to increased pressure on labour and materials availability.
Air Products had; however, previously highlighted cost advantages linked to low-cost natural gas and US federal carbon sequestration tax credits of $85 per tonne, which it said supported the project’s long-term competitiveness.
With the write-down, Air Products continues to operate 18 industrial gas facilities in Louisiana, including a hydrogen pipeline network, supplying refinery customers along the US Gulf Coast.
