Air Liquide to integrate coal gasifiers supply - UBS

17 April 2007 11:25  [Source: ICIS news]

LONDON (ICIS news)--Air Liquide will become a vertically integrated supplier of coal gasifiers through its deal to buy Lurgi from GEA, but its plans for the company’s bioethanol facilities remain unclear, UBS said on Tuesday.

 

“Lurgi is the go-to supplier of ethanol plants and coal-to-methanol facilities. We think it is the latter which attracts Air Liquide, wishing to expand in air gases by bringing coal gasifiers over the fence to secure take/pay on site contracts,” the bank’s analysts said in a note to clients.

 

“By providing both the engineering and the gas supply expertise, Air Liquide will become a vertically integrated supplier of coal gasifiers,” they added.

 

However, the analysts said Lurgi’s strong order backlog resides in bioethanol, which is not core for Air Liquide. They added that they were awaiting clarification of the company’s strategic direction regarding that part of the business.

 

UBS kept its share price target for Air Liquide at €187 ($253). It also maintained the company’s rating at Neutral 1, but the analysts said they preferred the French firm over German rival Linde.

 

The company’s share price was at €185.46 at 09:29 GMT on Tuesday, down 0.43% from the previous close.

 

($1 = €0.74)

By: Hilde Ovrebekk
+44 20 8652 3214

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