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The Industrial Gas Industry
A Wealth of Opportunities
Dave Taylor
Vice President, Equipment and Energy
Citigroup Chemicals for the
Non-Chemist Conference
New York City
December 3, 2007
Forward-Looking Statements
    NOTE: This presentation contains “forward-looking statements” within the safe harbor provisions of the
    Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on
    management’s reasonable expectations and assumptions as of the date of this presentation regarding
    important risk factors. Actual performance and financial results may differ materially from projections and
    estimates expressed in the forward-looking statements because of many factors, including, without limitation,
    overall economic and business conditions different than those currently anticipated; future financial and
    operating performance of major customers and industries served by Air Products; the impact of competitive
    products and pricing; interruption in ordinary sources of supply of raw materials; the ability to recover
    unanticipated increased energy and raw material costs from customers; costs and outcomes of litigation or
    regulatory activities; consequences of acts of war or terrorism impacting the United States’ and other markets;
    the effects of a pandemic or epidemic or a natural disaster; charges related to portfolio management and cost
    reduction actions; the success of implementing cost reduction programs and achieving anticipated acquisition
    synergies; the timing, impact and other uncertainties of future acquisitions or divestitures or unanticipated
    contract terminations; significant fluctuations in interest rates and foreign currencies from that currently
    anticipated; the impact of new or changed tax and other legislation and regulations in jurisdictions in which Air
    Products and its affiliates operate; the impact of new or changed financial accounting standards; and the
    timing and rate at which tax credits can be utilized. The company disclaims any obligation or undertaking to
    disseminate any updates or revisions to any forward-looking statements contained in this presentation to
    reflect any change in the company’s assumptions, beliefs or expectations or any change in events, conditions
    or circumstances upon which any such forward-looking statements are based.
2
Industrial Gas Industry: Size and
    Market Share
     Total Industrial Gases Market: $51B in 2006



                                                                           AL
                                                                           Praxair
                                                                           AP
                                                                           Nippon Sanso
                                                                           Linde
                                                                           MG
                                                                           Airgas
                                                                           Other

                        Electronics &
                         Performance
                           Materials
                             (22%)
         2006, 100% basis (BOC added to Linde not adjusted for 2007 disposals)
3
Industrial Gas Industry: Markets
    and Products




                                       Metals
                         Hyco          CPI
                         Tonnage       Electronics
                                       Foods
                         Liquid/Bulk
                                       Medical
                         Spec Gas
                                       Other
                         Cylinders




             Electronics &
             Performance
               Materials
                 (22%)
4
Air Separation Made Easy




5
What drives the use of
    industrial gases?
     Provide energy efficiency
     Expand capacity
     Improve end-product quality
     Improve environmental
     performance




6
Industrial Gas Supply Modes
    Durable Business Model


      10, 15 and 20-year contracts
     Take-or-pay minimum volumes
    Contractual energy pass-through                       Equipment &
           Formula escalation                             Services 19%
                                      Onsite/Pipeline
                                           34%

           3-5 year contracts                            Package Gases &
                                        Liquid/Bulk
           Regional business                            Specialty Materials
                                           21%
     Cost pass-through/surcharges                              26%




7
Merchant Gases

     Liquid/bulk, cylinder and small onsite
     gases to diverse industrial markets
     Global business model
      – Marketing                                Local
      – Application development                 Business
      – Supply chain                                    Regional
                                       Global         Roles/Global
                                   Differentiators
     Local execution                                  Collaboration
      – Logistics
      – Sales and pricing
                                                 Margin
      – Customer service                      Improvement
                                                & Growth
     Opportunities for continued growth
      – Eastern Europe & Asia growth


8
Merchant Gases Applications

                                                  Argon
                              Oxygen
         Nitrogen

                                                Heat Treating
                          Respiratory Therapy
     Cryogenic Cooling
                                                Metal Refining
                          Combustion
     Cryogenic Grinding
                                                Protective
                          Cutting and Welding
     Food Freezing
                                                Atmosphere
                          Pulp Bleaching
     Food Packaging
                                                Welding
                          Wastewater
     Inerting
                                                Pressure
                          Treatment
     Metals Processing
                                                Testing
                          Rocket Propellant
     Materials Testing
                                                Blanketing
                                                Inerting




9
Tonnage Gases

      Supply to refinery, steel,
      chemicals
                                     H2 Plant Operating Years
      Global supplier of hydrogen
                                          APD . . .
      Operating experience              Widening Gap

      Significant global franchise
      positions
      Strong economic drivers for
      continued growth                 1995         2000           2005
                                         APD   Comp. X   Comp. Y   Others




10
How Hydrogen is Produced


     Conventional H2
                                                                  CO2
                                   STEAM                        PRODUCT
                 H2 Rec.

                          HYDRO-                    HT / LT       CO2
   Natural Gas and                       REFORMER                            Methanation   H2 PRODUCTS
                      DESULFURIZATION               SHIFTS      REMOVAL
 Light Hydrocarbons
                                                                                             94-97%
                           N.G. FUEL


                           CH4 + H2O    3H2 + CO     CO + H2O     H2 + CO2




11
Significant Refinery H2 Growth
                Forecasted 2006-2016                                                                 Updated view


                                100                                           ~$13 B
                                                MM BPD                      of on purpose
                                                                           H2 investments*
     Global Refining Capacity




                                        Regulatory Growth Drivers
                                          US, W. Eur. Clean Fuels
                                90        Transport Fuels                                 Represents 10 Billion SCFD
                                          USGC Hvy, sour crudes                                 New Capacity
                                                                                  Economic Climate Drivers
                                                                                    Margins (Economics)
                                                                                    Global incr. conversion
                                80                                                  Replacement SMR’s
                                                                                    Crude capacity growth
                                                                                    Global heavy sour crudes
                                                                                    Global clean fuels
                                                            ~$5 B                   Geographically dispersed
                                                          of On purpose
                                                         H2 Investments*
                                70
                                                1995                     2005                    2016
12
                                      *Note: Make plus Buy Market Opportunities
Strong Hydrogen Pipeline Positions
                                                                                                                                                               Sarnia
                                                                                                                                                               Canada                                             40


        Baton Rouge                                                                                                                                                                                      40
                                                                                                                                Edmonton,                              Suncor
                                                      Louisiana




                                                                                                       IL
                                                                                                     RA
                                                                                                                                  Canada
              Plaquemine




                                                                                                CN
                                                                                                                                                                                                      Air Products
                                                                                                                                                                                                      Canada
                                                                                                                                                                             40
                    Geismar                                                                                                                                       Shell
                                                                                                                                                                  Refinery
                   Geismar
                                                                            16
                                                                            16
                                      10
                                                        Lake                                                                                                   ST.
                                                                                                                                                 16
     Cosmar                                                                                                                                      16
                                                    Pontchartrain                                                                                              CLAIR
                                                                                                                                                               RIVER
                                                                                                                  Petro-Canada
        Convent
                                                                                 Imperial Oil
                                                                   Nola
                                                   New Orleans
                                    Taft                                                                            Sherwood                                                          Corunna
                                                                                                                    Park         21
                                                                                                                                 21
                                                                                              14
                                                                                              14                                                  630
                                                                                                                                                  630
                                                              Chalmette
                                                                                                                                                                                                   Rotterdam
                                                                                                             14
                                                                                                             14



                                                                                                                                       Europoort

                                                                                                                                                                                         Pernis
                          Dominguez
                                                          Southern
                          Channel
                                           91

                                                          California
 405                                                                                                                                                                                              Zwijndrecht
                                                                                                                                                                             Botlek
                                                                                                                                                                                                         Tarragona
190th
                                                                                                                                                                                                          Refinery
 St.
                                                    710
                                                                                                                                                   Lake Charles
                                                                                                                            Beaumont                                                                To Moerdijk
                                                  Carson H2
                                                                    Long
                        110
                                                                                                              Mont Belvieu
             VAN NESS                                               Beach                                                                   69
                                                                                                                                      10
               AVE.                                                 Arpt.   City of Houston
                            BP                                                                      Battleground
 Sepulveda
                                                                                          Texas
                                                                                                                                       73
   Blvd                   Carson
                                                                                                                                                 Port Arthur
                                                                                                                      10
                                                                      405
                                                                                                                                                                                      APD HyCO facilities
                                                Shell                                                        Baytown 2
                       Conoco Phillips          Wilmington                          610
                                                                                                                                                                                      H2 pipeline
                          Carson
        1

                                                                                                                                                                                      CO pipeline
                                                                                              225
                               Anaheim          Valero
                                Street                                                              45
                                                Wilmington                                                            LaPorte
                                                                                                                                                                                      Syngas pipeline
                                                                            Pasadena Bayport
     Conoco Phillips
       Wilmington                               Wilmington H2
                                                                                          Clear Lake
                         110

                                                                                                         Texas City



13
Hydrogen Requirements
     By Region
                    1800
                                1200-1800
                    1600
                    1400
     H2 (scf/bbl)




                    1200
                                                                           Oil Sands
                    1000                                                   California
                                            800-1000
                    800                                                    US GC
                                                       600-800

                                                                           Europe
                    600
                                                                 300-600
                    400
                    200
                      0
                                18-20       22-25      26-30     30-35

                           Regional Avg. Crude (API Gravity) Quality
14
Gasification:
     An Exciting Growth Opportunity
      APD is one of the largest
      suppliers of oxygen to
      gasification facilities around the
      world (>10 large units)
      Designed, built, own, and operate
      units in Texas for syngas, H2 and
      CO for pipeline systems:
      – NG based POX units (LaPorte)
      – Syngas cleanup / separation
        facilities from heavy oil POX
        unit (Baytown)
      Recently announced Tonnage
      relationship on O2 and H2:
      – Eastman Gasifier - Texas
      – Wison II in China
      – BP Clean Power in California
15
Equipment and Energy

      Broad customer base
       – Oil & gas, utilities, chemicals
         and metals
      Products
       – LNG heat exchangers, large air
         separation units, hydrocarbon
         separators, helium containers,
         hydrogen fueling systems…
      Strategy
       – Leverage existing relationships
       – Develop energy projects
       – Leverage engineering
         technology and products to
         grow gases businesses
16
Coal-Fired                              ~9,000+ tpd CO2
      Oxyfuel Boiler                          95-99+% purity
                                                 at 110 bar

                   Turbines   500 MWe      AP CO2 Purification &
                                           Compression
                                                          Stack
     Oxygen
                          Furnace        65-75% CO2
     ~9000 tpd

                                                          X
 Coal
 ~4,000 tpd
                                               Flue Gas
                                               Recycle




                                                           X
                                                           Air
     Flexible AP CO2 system - 90-98% CO2 capture
17
Extending Gas Expertise into
     Other Industries
      Electronics and Performance Materials represent
      ~20% of our revenues
      The segment is underpinned by technology,
      innovation
      Franchise positions / global leadership
      Strategic positions with leading customers
      Operationally excellent global supply chain
      Leading edge applied technology, new products




18
The Industrial Gas Industry
     Provides…
      Great track record of growth
      Solid returns
      Strong project backlog, good future insight
      Leadership in energy opportunities
      Strong applications growth
      Most importantly, fiscal stability in uncertain
      times




19
Thank you




     tell me more
     www.airproducts.com
20

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air products & chemicals 3 December 2007 Citigroup Non ChemConf

  • 1. The Industrial Gas Industry A Wealth of Opportunities Dave Taylor Vice President, Equipment and Energy Citigroup Chemicals for the Non-Chemist Conference New York City December 3, 2007
  • 2. Forward-Looking Statements NOTE: This presentation contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management’s reasonable expectations and assumptions as of the date of this presentation regarding important risk factors. Actual performance and financial results may differ materially from projections and estimates expressed in the forward-looking statements because of many factors, including, without limitation, overall economic and business conditions different than those currently anticipated; future financial and operating performance of major customers and industries served by Air Products; the impact of competitive products and pricing; interruption in ordinary sources of supply of raw materials; the ability to recover unanticipated increased energy and raw material costs from customers; costs and outcomes of litigation or regulatory activities; consequences of acts of war or terrorism impacting the United States’ and other markets; the effects of a pandemic or epidemic or a natural disaster; charges related to portfolio management and cost reduction actions; the success of implementing cost reduction programs and achieving anticipated acquisition synergies; the timing, impact and other uncertainties of future acquisitions or divestitures or unanticipated contract terminations; significant fluctuations in interest rates and foreign currencies from that currently anticipated; the impact of new or changed tax and other legislation and regulations in jurisdictions in which Air Products and its affiliates operate; the impact of new or changed financial accounting standards; and the timing and rate at which tax credits can be utilized. The company disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this presentation to reflect any change in the company’s assumptions, beliefs or expectations or any change in events, conditions or circumstances upon which any such forward-looking statements are based. 2
  • 3. Industrial Gas Industry: Size and Market Share Total Industrial Gases Market: $51B in 2006 AL Praxair AP Nippon Sanso Linde MG Airgas Other Electronics & Performance Materials (22%) 2006, 100% basis (BOC added to Linde not adjusted for 2007 disposals) 3
  • 4. Industrial Gas Industry: Markets and Products Metals Hyco CPI Tonnage Electronics Foods Liquid/Bulk Medical Spec Gas Other Cylinders Electronics & Performance Materials (22%) 4
  • 6. What drives the use of industrial gases? Provide energy efficiency Expand capacity Improve end-product quality Improve environmental performance 6
  • 7. Industrial Gas Supply Modes Durable Business Model 10, 15 and 20-year contracts Take-or-pay minimum volumes Contractual energy pass-through Equipment & Formula escalation Services 19% Onsite/Pipeline 34% 3-5 year contracts Package Gases & Liquid/Bulk Regional business Specialty Materials 21% Cost pass-through/surcharges 26% 7
  • 8. Merchant Gases Liquid/bulk, cylinder and small onsite gases to diverse industrial markets Global business model – Marketing Local – Application development Business – Supply chain Regional Global Roles/Global Differentiators Local execution Collaboration – Logistics – Sales and pricing Margin – Customer service Improvement & Growth Opportunities for continued growth – Eastern Europe & Asia growth 8
  • 9. Merchant Gases Applications Argon Oxygen Nitrogen Heat Treating Respiratory Therapy Cryogenic Cooling Metal Refining Combustion Cryogenic Grinding Protective Cutting and Welding Food Freezing Atmosphere Pulp Bleaching Food Packaging Welding Wastewater Inerting Pressure Treatment Metals Processing Testing Rocket Propellant Materials Testing Blanketing Inerting 9
  • 10. Tonnage Gases Supply to refinery, steel, chemicals H2 Plant Operating Years Global supplier of hydrogen APD . . . Operating experience Widening Gap Significant global franchise positions Strong economic drivers for continued growth 1995 2000 2005 APD Comp. X Comp. Y Others 10
  • 11. How Hydrogen is Produced Conventional H2 CO2 STEAM PRODUCT H2 Rec. HYDRO- HT / LT CO2 Natural Gas and REFORMER Methanation H2 PRODUCTS DESULFURIZATION SHIFTS REMOVAL Light Hydrocarbons 94-97% N.G. FUEL CH4 + H2O 3H2 + CO CO + H2O H2 + CO2 11
  • 12. Significant Refinery H2 Growth Forecasted 2006-2016 Updated view 100 ~$13 B MM BPD of on purpose H2 investments* Global Refining Capacity Regulatory Growth Drivers US, W. Eur. Clean Fuels 90 Transport Fuels Represents 10 Billion SCFD USGC Hvy, sour crudes New Capacity Economic Climate Drivers Margins (Economics) Global incr. conversion 80 Replacement SMR’s Crude capacity growth Global heavy sour crudes Global clean fuels ~$5 B Geographically dispersed of On purpose H2 Investments* 70 1995 2005 2016 12 *Note: Make plus Buy Market Opportunities
  • 13. Strong Hydrogen Pipeline Positions Sarnia Canada 40 Baton Rouge 40 Edmonton, Suncor Louisiana IL RA Canada Plaquemine CN Air Products Canada 40 Geismar Shell Refinery Geismar 16 16 10 Lake ST. 16 Cosmar 16 Pontchartrain CLAIR RIVER Petro-Canada Convent Imperial Oil Nola New Orleans Taft Sherwood Corunna Park 21 21 14 14 630 630 Chalmette Rotterdam 14 14 Europoort Pernis Dominguez Southern Channel 91 California 405 Zwijndrecht Botlek Tarragona 190th Refinery St. 710 Lake Charles Beaumont To Moerdijk Carson H2 Long 110 Mont Belvieu VAN NESS Beach 69 10 AVE. Arpt. City of Houston BP Battleground Sepulveda Texas 73 Blvd Carson Port Arthur 10 405 APD HyCO facilities Shell Baytown 2 Conoco Phillips Wilmington 610 H2 pipeline Carson 1 CO pipeline 225 Anaheim Valero Street 45 Wilmington LaPorte Syngas pipeline Pasadena Bayport Conoco Phillips Wilmington Wilmington H2 Clear Lake 110 Texas City 13
  • 14. Hydrogen Requirements By Region 1800 1200-1800 1600 1400 H2 (scf/bbl) 1200 Oil Sands 1000 California 800-1000 800 US GC 600-800 Europe 600 300-600 400 200 0 18-20 22-25 26-30 30-35 Regional Avg. Crude (API Gravity) Quality 14
  • 15. Gasification: An Exciting Growth Opportunity APD is one of the largest suppliers of oxygen to gasification facilities around the world (>10 large units) Designed, built, own, and operate units in Texas for syngas, H2 and CO for pipeline systems: – NG based POX units (LaPorte) – Syngas cleanup / separation facilities from heavy oil POX unit (Baytown) Recently announced Tonnage relationship on O2 and H2: – Eastman Gasifier - Texas – Wison II in China – BP Clean Power in California 15
  • 16. Equipment and Energy Broad customer base – Oil & gas, utilities, chemicals and metals Products – LNG heat exchangers, large air separation units, hydrocarbon separators, helium containers, hydrogen fueling systems… Strategy – Leverage existing relationships – Develop energy projects – Leverage engineering technology and products to grow gases businesses 16
  • 17. Coal-Fired ~9,000+ tpd CO2 Oxyfuel Boiler 95-99+% purity at 110 bar Turbines 500 MWe AP CO2 Purification & Compression Stack Oxygen Furnace 65-75% CO2 ~9000 tpd X Coal ~4,000 tpd Flue Gas Recycle X Air Flexible AP CO2 system - 90-98% CO2 capture 17
  • 18. Extending Gas Expertise into Other Industries Electronics and Performance Materials represent ~20% of our revenues The segment is underpinned by technology, innovation Franchise positions / global leadership Strategic positions with leading customers Operationally excellent global supply chain Leading edge applied technology, new products 18
  • 19. The Industrial Gas Industry Provides… Great track record of growth Solid returns Strong project backlog, good future insight Leadership in energy opportunities Strong applications growth Most importantly, fiscal stability in uncertain times 19
  • 20. Thank you tell me more www.airproducts.com 20