Praxair to Build Oxygen Plant at Valero Refinery

October 26, 1999

Praxair, Inc. today announced an agreement with Valero Energy Corporation valued at $20 million that nearly doubles its oxygen supply to Valero's Houston refinery with a new, non-cryogenic oxygen generating plant.

Praxair will build, own and operate a 165 tons (150 metric tonnes) per day oxygen generating plant located at Valero's Houston refinery. The plant uses vacuum pressure swing adsorption (VPSA) technology pioneered by Praxair to produce the oxygen. Start-up is scheduled for the fourth quarter of 1999.

Praxair will continue to supply oxygen via pipeline to Valero's Houston refinery from its Gulf Coast pipeline network. Total revenue from the new plant and the ongoing pipeline deliveries are estimated at more than $20 million over the 15-year term of the agreement.

Praxair also supplies oxygen and other industrial gases to Valero refineries in Texas City, Texas and Krotz Springs, La. Valero will use the oxygen in its sulfur recovery unit (SRU) and fluid catalytic cracking unit (FCCU) to optimize the value of product yields from lower-cost feedstocks.

"Third-party supply of oxygen and hydrogen from industrial gas suppliers such as Praxair is a cost-effective way for refineries to upgrade lower-cost raw materials into premium, clean-burning transportation fuels without major capital investment," said John Hohnholt, senior vice president of refining operations, Valero Energy Corporation.

Valero Energy Corporation is a Fortune 500 company based in San Antonio, with 2,500 employees and revenues of approximately $5.5 billion. The company currently owns and operates five refineries in Texas, Louisiana and New Jersey with a combined throughput capacity of approximately 735,000 barrels per day, making it the nation's second largest independent refining company.

Praxair is the largest industrial gases company in North and South America, and one of the largest worldwide, with 1998 sales of $4.8 billion. The company produces, sells and distributes atmospheric and process gases, and high-performance surface coatings. Praxair products, services and technology bring productivity and environmental benefits to a wide variety of industries, including aerospace, food and beverage, healthcare, electronics, steel, chemicals and refining, metal fabrication, water treatment, glass and others.

Praxair, Inc.