Dr. Samir Serhan is my guest up here, along with Sidd Manjeshwar. Sidd's got a couple of decades of experience in marketing and treasury and finance and so forth, and glad to have him up here with us. Dr. Serhan has got a long time history in the industrial gases industry. He was with legacy Linde for a long time, was a part of the legacy or the Linde Engineering. Then he spent a few years at Praxair, and he's been with Air Products, what, six or seven years. And he's Chief Operating Officer, so it's a real treat for me to have these guys up here. A lot going on in the gases world, and these guys are front and center on the shift towards decarbonization. Maybe I'll start with kind of a high-level question, particularly Dr. Serhan, with your background in the, you know, not quite all, but most of the big industrial gases companies, and you were, you know, part of Linde Engineering. You know, Air Products doesn't have an engineering group that size. You're clearly building some really big projects, I guess my question for you is: how do you view the strengths and the expertise of Air Products relative to, you know, the competing industrial gases companies? Where would you say Air Products is being most differentiated? Thanks, Steve. It's a pleasure to be with you here today. Definitely three distinguished companies, a very good track record. Very, very different, which really proves the point there are you can get to the finish line in so many different ways. What really distinguish Air Products, in my opinion, from the others, is really the hydrogen. I mean, 60 year of experience in hydrogen. Air Products started the sale of gas business for hydrogen, where people at that time were questioning, "Is this really viable? Does it make sense?" Now many people are doing it. We have the largest production right now of gray hydrogen, around 9,000 tons per day, and also significant amount of syngas in addition to the hydrogen. The largest pipeline network of hydrogen also in the world. Hundreds of patents. We have really set the standard about how to operate hydrogen plants from reliability, availability, efficiency. So many things really that distinguish Air Products and it's really hydrogen is part of the Air Products DNA. This is really part of why Air Product was the first mover in the energy transition to go to blue hydrogen, green hydrogen. Very well positioned for that, and that's really why we're here acting as a first mover with around $15 billion investments in low carbon hydrogen as we speak. When it comes to capabilities, definitely these mega projects, they are not risk free. They definitely come with risk, I mean, and we need to manage them. We've been preparing the organization now for six years to really prepare for these projects. We started six years ago with the three execution centers worldwide. Now we have eigh execution centers where we really do engineering, project management, and procurement. We can shift the procurement from one continent to another because of the currency, because of the inflation, because of many factors. We have built in our headquarters in Allentown, state-of-the-art R&D labs. I mean, very, very impressive to see about what we're really doing there in regard to energy transition. We have hired around 3,000 people in the last three years to position us. Some of the top talent really from competition, industrial gas, EPC companies. We evaluated, revamped all of our processes tools to make them more efficient, well-connected. Again, because to get to the finish line, you need to act, work hard and also act smart. If you do it smarter, you have a lot better chance of making it to the finish line. We really try to adjust all of our tools and the processes to manage this so we can really consistently deliver. We managed to do this. The $2 billion project that we did in Saudi Arabia on Jazan ASU, that was a one of a kind. We delivered on that. 27 million hours without a lost time incident from a safety. On schedule, I mean, significantly below budget. We really converted that to the Jazan transaction, which is at $12 billion. We finished group one assets October 2021. I mean, not many people talking about it. Many people at that time were questioning, "Are we gonna be able to close this one-of-a-kind, $12 billion sale of gas type of a project?" We did finish it. I mean, we got the group one assets back in October 2021, and we had 800 people since then commissioning this one-of-a-kind facility. It's one of the most complex process plant on Earth, and we've successfully managed to commission the first group one assets, and now we took over in January of this year, group two assets, to really conclude this transaction. Again, lots of a track record of really delivering. We announced back in 2020 the largest single ammonia train in the world for Gulf Coast Ammonia, where we supply them hydrogen and nitrogen. I mean, again, between our sale of gas part and also including the project execution of the ammonia plant, that's like around $1 billion. This project is gonna come on stream this summer. I mean, it's doing good on budget, schedule, safety. Again, we do walk the talk when it comes to really these capabilities to deliver on these mega projects. Again, don't wanna fool anybody and say these are risk-free. They are not. We are focused, and we're making them happen. These 3,000 in headcount increase, how would you allocate that within expertise? Did you build out an engineering capability to build these mega projects? It's really these people are like more engineers across all disciplines, civil, structural, mechanical, electrical, project managers, project controls, and procurement people worldwide. I mean, very, very solid capability. This is when everybody was impacted with the COVID, letting people go, lots of insecurities. We brought 3,000 people, incredibly competent, to really deliver on these projects, and we are delivering. You highlighted Air Products' focus on hydrogen as differentiated, and I clearly agree with that, and I would say, in particular, your willingness to go down the path of green. My question for you on that is: what do you see as the primary end market for the green hydrogen projects? What gives you that conviction? I mean, we do see the world growing, and the world is gonna need more energy, and the world also wants more clean energy. We really do see for a significant amount of time that we're gonna need to produce significant amount of gray hydrogen, blue hydrogen, and green hydrogen. The switch just from a gray to green, it's unrealistically. You cannot flip a switch, and you change. I mean, from a cost, from many, many different factors, manufacturing capacity, availability of renewable energy, it just doesn't happen. This has to transition over long term. We do see significant demand for low carbon hydrogen, whether this is blue or green. Some of it is for mobility, but we also see it for industrial. Again, the way our customers see it is really more about carbon intensity versus what the color of the hydrogen. Of course, if it's a green, you have a much lower carbon intensity than the blue and the different versions of the blue. Again, like our project in Canada, Edmonton, I mean, that's as green as it can get. We're using natural gas hydrocarbon to produce the blue hydrogen, but we're basically capturing equivalent of around 100% of that CO2 and sequestering it. We do see the demand. Our Edmonton project, when we announced it, we didn't have offtakes, but we did see the market is there. We've been negotiating with customers, and we managed to close one with IOL in Canada, where they're taking more than 50% of that volume and with a premium for that low carbon intensity. We really do see the demand also for hydrogen. We could have sold the NEOM product long time ago. Also with a margin, with a profit meeting our target, we're really looking for the proper timing because it's a specialty product, it's not a commodity, and you really need to wait for the time. I mean, you saw Europe is talking about 10 million tons of green hydrogen by 2030 to produce in Europe and 10 million to be imported to Europe. I mean, you're gonna need a couple of hundred of NEOM by 2030 to meet that demand in Europe. Where are those plants? We really see, I mean, we're talking to so many of the customers about for mobility and also for industrial use. In mobility, where do you see the most probable demand? Is it autos? Is it buses? Is it trucks? Maybe that varies by where in the world? It's heavy duty. I mean, heavy duty transportation, so really more buses and trucks. Like, the product of NEOM, you only need 14,000 trucks, heavy duty trucks to take it. If you go to Germany, you have like more than 600,000 trucks. You're really talking about very small proportion that, I mean, what really the capacity today, I mean, what NEOM is really supplying. It's just a drop in the ocean. Speaking of NEOM, you mentioned on your call that you had secured some financing or you were about to get some. Can you give us an update on the financing for NEOM? Yeah. We're really, I mean, celebrating, I guess. Yesterday, we did the dry close for the NEOM. I mean, with the 20 lenders. I mean, it was very, very successful. I'll let actually Sidd to speak more about this. I mean, it's a huge milestone for our NEOM project. Sure. Thank you, Dr. Serhan. Thanks for the question, Steve. You know, at our early February earnings call, you heard Seifi mention we've made good progress with these global financial lenders. Yesterday, we signed all our financing arrangements with over two dozen large global sophisticated project finance lenders, who are giving us close to 30 years worth of maturity in terms of paper, as well as paper probably in the 5%-5.5% interest rate. It's another reaffirmation and validation of our energy transition story and seeing money, smart money from global financial institutions, putting their heft, like we're seeing with public policy globally as well, behind our strategy. We're pretty delighted with the outcome. Let's continue on NEOM, and you made a rightful comment earlier that these big projects are not risk-free. Talk a little bit about the scope of NEOM going from $5 billion to $8.5 billion. That's not just like cost overruns. Some of it was a change of scope. Can you elaborate on that? That's a big change. Yeah. To go from the $5 billion to the $8.5 billion, there is $1.8 billion is really related to the project financing. additional joint venture cost when it comes to the cost of borrowing money, paying interest on the money that we need during the construction period. It's really more like what we also did with the Jazan transaction. This is pretty standard project finance cost that you have to deal with and add to the cost. It does improve your return on equity at the end of the day. There is $1.7 billion related to two items. One of them is inflation. It was around $500 million. The NEOM project was announced in 2020, so it's really right in the middle of COVID and where it really showed the whole wave of the inflation of what happened the last couple of years. That's like around 10% where we saw inflation. We tried to manage it. I mean, we saw a lot more headwinds in inflation, but we really managed it properly. We re-engineered some of the process units that mean to try to reduce the cost. We evaluated some of the, like, the big reactors, some of the units where you have exotic materials, we re-engineered also to contain that cost. It's really not bad for that duration where you had heavy inflation, basically really only to be dealing with like 10% on the project. We have placed orders now for the majority of the items, so this is really we're more certain about the cost, including even the construction. We are far stages in the engineering of the, of the plant, the whole complex. There is $1.2 billion related really to scope shift. That scope shift really is basically like, related to. Again, NEOM is a big city, or it's a big country with the ambitions what they're really trying to build. We just really wanted to, us and our partners, we wanted to be as much independent as possible from the rest of NEOM. That's why we really shift lots of the scope to really be within the production joint venture just so it can be self-sufficient. That's really drive lots of the cost. We also move some of the cost that's really that you can carry annual expense, we moved it really upfront and capitalized it. That's where this $1.2 billion is coming from. We've made our own estimates of your cost for this green ammonia, that you're the sole offtaker from the JV, you know, and our own estimates of trying to, you know, what is that gonna cost you. A big chunk of that is the return on invested capital of this. What was $5 billion, now $8.5 billion. On your last call, Seifi was very clear that your price for that offtake isn't changing. It seems like the only way that happens is if the ROIC to the joint venture goes down. Is that fair? Why would your partners agree to that? I mean, let's just start with the Air Products side. There is no doubt that the combined return for Air Products, part of the production joint venture, taking the offtake at a certain cost and selling it to the market, we feel very confident we're gonna be above the 10% IRR, the combined total return on. What really, again, we cannot reveal too much details about the production joint venture because of our partners. Again, keep in mind, ACWA Power is significantly owned by PIF, which is really Saudi government. NEOM is owned by the Saudi government. Green hydrogen is very important for Saudi Arabia, that mean to produce green fuels and to be associated with, because they're also heavy producer of the hydrocarbons. From the government perspective, I mean, this is well calculated. They wanted to get into this, and it's a first-mover advantage. Today, based on the work we're doing, and people are questioning, should we do a green hydrogen project or not? If I do a second NEOM today, my cost is gonna be around 18% less. This is the magic about this industrial gas model, is the 360 learning. You cannot just keep talking and debating. You need to get going and adjust as you go, and you learn as you go, and now you get whatever efficient. While people are still doing visibility and a pre-FEED and a FEED and all of this, we're way ahead of that mean when it comes to really optimizing this plan from capital, from O&M, from efficiency and also competitiveness of the product at the end of the day. You highlighted that you announced this project in mid-2020. I mean, we've had five hydrogen conferences. That was before any of those. It's just a pretty long time ago. At that time, you had a $1.5 billion capital budget to then take that, you know, offtake of ammonia and distribute it. How has your thinking changed since then on what you're gonna do with that green ammonia? Is that $1.5 billion Of CapEx still fair? $2 billion. $2 billion? Yeah. Mm-hmm. Sorry. It's. We're definitely committed to that. I mean, we have announced recently that we have in the process of engineering and building three green energy import terminals in Europe, one in Hamburg, Germany, with big support from the German government, one in Rotterdam in Netherlands, and one in the U.K., Immingham. These are basically gonna be terminals where we're gonna be import green energy, green hydrogen, green ammonia from NEOM and other parts of the world. Basically, you're gonna have their tanks, you're gonna have ammonia crackers to crack it to hydrogen, to basically you might liquefy it and distribute it to customers for mobility and for industrial use. It's really fully following through to what we really started with, and we're gonna see more of that in other continents of the world. I would've said that, you know, 2.5 years ago, what you were more than likely going to target for that would've been Asia. Sounds like it's more Europe, given the changes that have occurred. Is that fair? I would say that's fair. I mean, we are talking to Asian customers about also they're interested in the green ammonia and the blue ammonia. There is interest. I would say Europe is really leading the pack right now when it comes to the product. Will some of the ammonia storage and dissociation capability and all that would be required at those three terminals, would those be Air Products investments? Correct. That's really part of our core capability that also distinguishes. Others do execute this project like custom-made. They hire EPC company. They spend lots of time doing this FEED and doing this calculation, and they start from scratch. What we do, we create the products. Like a few years ago, we wanted to build a liquid hydrogen plant in Navarro, Texas, to basically liquefy hydrogen gas to make it liquid and sell it to our customers by trailers. We haven't done a liquid hydrogen plant for 25 some years. An A team on it, brainstorm it, develop the product, and we basically managed to deliver that in a couple of years. Now this plant is running. Now actually we need for all of these terminals and all of these locations for green and blue hydrogen, we need these liquefiers. We're gonna be building 10 or 12 of these all over the world. That's the product concept. That's really the 360 learning. The same thing two years ago. We said, "Okay, we want hydrogen from NEOM." To ship hydrogen was difficult, energy intensive, so we had to convert it to ammonia. Now when we ship it as liquid ammonia, when it get to destination, we need to crack it back to hydrogen. We looked in the world about where are those ammonia crackers. We found many. Their efficiency are incredibly not good. We said, "Get our experts on this. Let's put our A team on this. We did manage to do now a product, now we have a product that's a fraction loss of efficiency compared to what's really available in the market that can really distinguish us from others. Now we're gonna need to build 10, 15 of those worldwide. That's really the power of learning and creating those products that we managed to do at Air Products. You're building this, you know, big blue hydrogen plant in Louisiana and tied to your pipeline, and we toured some plants in the last two days that receive hydrogen from Air Products. Do you view that incremental demand or incremental supply of blue hydrogen as primarily going to your existing customers that are currently getting gray, so it's a shift from gray to blue, or do you see the outlook for increased demand, such as for renewable fuel? I think it's gonna be, Steve, all of the above. I mean, some of our customers, because of their carbon intensity goals, they need to switch from a gray to blue or green, so we can supply them. We're gonna be putting in that pipeline, which is 1,000 km long between Texas and Louisiana, we're gonna be putting all kind of hydrogen, the gray hydrogen that exists right now, blue hydrogen from Darrow, and maybe green hydrogen from our Texas facility or from NEOM. Now we have this hydrogen with different low carbon intensity, and it's book and claim. We basically give you a certificate for what you really wanna pay for a carbon intensity for whatever application. Some of it is gonna be for mobility, some of it for refining, some of it for renewable diesel. I mean, they're looking for that because there is LCFS credits in California that will definitely reward you for this low carbon intensity. Some of it could be also blue ammonia that can go on the ammonia pipeline. I mean, that goes from Louisiana all the way to the Midwest. I mean, if somebody wants to buy low carbon ammonia, I mean, so. Maybe another one on hydrogen, and that is this Texas project that you recently announced with AES. The question I have on that one is there seems to be some level of uncertainty as to how the IRS is going to, you know, force compliance with the renewable energy that you would use to make the green hydrogen, whether that's hourly compliance or annual compliance. Is it fair to say your 200 ton per day target is assuming kind of the most stringent scenario? Could it go meaningfully higher than that given the 1.4 GW of renewable power that project's gonna have? It seems like you could generate more than 200 tons a day. Yeah. I mean, we're in the process of doing this as we speak, Steve. I mean, that project is not FID, it's not in final investment decision, but we feel very good about that project. We are now finalizing some permits, some approvals. We're doing some engineering to try to define the scope, the sizing of the different units. At the end of the day, we're gonna do the capital optimization. I mean, we need to make sure that the cost of the renewable energy, wind and solar, is gonna be as most competitive as possible. We need to make sure that the products that mean we're gonna be making, we're gonna get the most incentives out of the IRA. We're gonna make sure that all of the electrolyzers, that they're gonna be highly utilized. This is all part of this optimization we're doing and some of the learning we've done from NEOM, basically really to try to optimize the configuration to give us the most competitive product. Okay. Let's deviate from hydrogen here for just a couple more minutes. The merchant price increases in Europe in the last year have been incredible. In your experience, have you ever seen merchant pricing that strong and does it surprise you and do you have any concern that you're gonna have to give some of it back? It is definitely incredible. I mean, this is something I just wanna take the opportunity. We spend lots of energy talk about these mega energy transition projects and not talking about our core traditional business. You can really see that, I mean, just looking at the last quarter results, the $2.64 per earning per share. I mean, that's 6% above last year. At 20% if you really take the currency issue and also the one-time are related to the Jazan ASU. When you really look at Europe, equivalent of a 24% price increase on merchant. I mean, that's incredible. That's really amazing. When you look at Asia, 7% volume growth. 25 plants we started in the last 12 months in Asia. When you look at America, 26% merchant price increase. When you look at the volume, 6% volume increase. I mean, these are very, very solid numbers. Besides the plants we're building in Asia with our joint venture that we own in INOX A P in India, we're building 18 plants for them, small to midsize you don't really hear about. This is all going behind the scene. We're really delivering on this, expanding our core business because it is important. We have more than $1 billion of electronics projects you don't hear a lot about, but this is all happening behind the scene. So, we're definitely still very much focused on keeping market share and our competitiveness when it comes to our core business while we're growing those mega projects to achieve our double-digit earning per share growth. Anybody wanna jump in here with a question? Hey, guys. Obviously you have this massive amount of spend over the next few years on these projects. You guys have a single A rating. Any concerns about losing that single A rating, a willingness to lose that single A rating? If not, can you just kind of describe why there's such an importance in your industry of that high rating? Thanks. I think Sidd, as our Treasurer, I mean, you will be the best qualified to answer this. Sidd. Thanks for the question and a great question. I think we've got a very strong commitment to the Aa2 rating, not only to the rating agencies, but also to our customers. You know, as you heard Dr. Serhan mention, we're the largest player on the onsite business model, right? Where you've got assets sitting alongside your customers for multi-decade periods. I think they appreciate the strong rating because it gives them comfort in doing business with us as well. In our conversations with the rating agencies, we have made that commitment very clear. They appreciate that Aa2 rating. You know, Dr. Serhan also just mentioned we put close to $1 billion in the Jazan group two transaction in January this year, right? I think the agencies again appreciate the non-recourse nature of that. In our earnings, we have a capital allocation scorecard that we give investors visibility into how much capital capacity we have, as well as how much project backlog we have, right? Candidly, that leverage number for us as a company for Aa2 balance sheet, we've been very underlevered for several years. Now we're surgically putting that balance sheet to work. We've got a lot of capital discipline like you mentioned, and we are good stewards of capital. That commitment to the rating of Aa2 is very strong from our perspective. We have no issues with that from a rating agency perspective either. Any others? I have one more. Maybe six or seven years ago, I toured a nitrogen plant in China that had old gasifiers and 15% of the coal was going out the stack. On the other side of the facility, there was a big Air Products ASU, and there was nothing coming out of that stack. It's coal gasification, using oxygen instead of air. Do you see more opportunities like Luan? I mean, today, in addition to the projects that we have under execution, we have around more than $100 billion of opportunities we're evaluating worldwide. It's a pretty heavy pipeline we have of opportunities that we're evaluating. We're definitely not desperate for project. We're being very, very selective. Where it is in the focus today, to be honest with you, that mean, it's the Americas, it's IRA. That's where we really see more certainty. I think, in China, I mean, they're evaluating many things, including CO2 footprint, what are they gonna do about it. There are many question marks, geopolitical situation there. Really, again, our focus, Americas, IRA, green hydrogen, blue hydrogen, Europe, Middle East. China is somewhat wait and see now what's going on. Really, when it comes to coal gasification, we would be interested in that. We have some of the best technologies in the world. It's really with the CO2 capture and sequestration. Okay. Any thoughts on helium? Is your outlook for helium to remain tight? What are you doing about it? We're doing good. I mean, many of our competitors claimed force majeure last year. Air Products did not. We have a very diverse supply base for helium. We're very fortunate in that. That gives us high reliability for our suppliers, our customers. On the top of that, we basically invested in building a cavern in Texas that's now operational, where we basically store helium on an as-needed basis. We have a very robust supply scheme for helium, and we're fortunate to have that while others have claimed force majeure. We also managed to get spot volume opportunities because of that, which is with nice margins that would definitely also help. We are out of time. Please join me in thanking these fellows for their presentation. Thank you.