In 2008, almost half of the Engineering Division’s new business (EUR 1.345bn) related to air separation plants. This product segment therefore once again made a significant contribution to the success of our international plant construction business.

The contract of the greatest strategic importance to The Linde Group in 2008 came from the Middle East. Linde and the Abu Dhabi National Oil Company (ADNOC) agreed to construct two large air separation units (ASUs) through their joint venture Elixier in Abu Dhabi in the United Arab Emirates. The total investment is around USD 800m. From the end of 2010, the new plants will be connected to the utility and pipeline network and will supply nitrogen for injection into the onshore condensate field in Habshan in the Emirate of Abu Dhabi to free natural gas for the national grid. The two ASUs will have a total nitrogen capacity of 670,000 scmh (standard cubic metres per hour). State-owned oil company ADNOC owns 51 percent and Linde owns 49 percent of the shares in the Elixier joint venture, which was formed in December 2007. ADNOC manages the onshore and offshore oil, gas and petrochemical business in Abu Dhabi.

The world’s largest air separation complex in Qatar on the Persian Gulf, which was commissioned in August 2006, is currently in its construction phase. The complex comprises eight structurally identical plants for the recovery of a total of 860,000 cubic metres of oxygen per hour. The contract is part of a Gas-To-Liquid (GTL) plant being built by Shell GTL Ltd and Qatar Petroleum. Linde is establishing itself here as a provider of oxygen supply systems to the plant. A key element of the air separation plant is the cold box (Glossary) in which the air is separated. Six of the eight cold boxes have now been manufactured at our plant in Dalian, China. The construction site was fitted out at the end of 2007, and by the end of 2008 four of the eight cold boxes had been installed. More than 80 percent of the total 270,000 freight tons have already been transported to the construction site. The final deliveries will take place at the beginning of the third quarter of 2009. Primarily due to the lack of skilled workers in Qatar during the 2008 financial year, progress on the construction site was behind schedule. However, measures have been taken to ensure that the plant is transferred to the contractor on time at the beginning of 2011.

Both the Gases and Engineering Divisions were successful in the growth market of China. We entered into two new contracts for the on-site supply of gases to the companies Ningbo Iron & Steel Co. Ltd and Hanwha Chemical Corporation (HCC) in Ningbo in eastern China. Under the agreements, Linde will build an additional air separation plant at the emerging industrial site on the Yangtze delta, an investment of around EUR 17m. The new plant will supply an extra 21,000 scmh (standard cubic metres per hour) of oxygen to the steelworks of Ningbo Steel in Ningbo Beilun district from the middle of 2009. Linde Gas Ningbo, a fully-owned subsidiary of The Linde Group, has been supplying the largest integrated producer of iron and steel in the region exclusively since 2007 with a total of 42,000 scmh of oxygen and 40,000 scmh of nitrogen from two air separation plants.

The positive trends have also continued during the year in the emerging market of India. We have been commissioned to build two air separation plants, each with a capacity of 16,000 scmh, for the customer Steel Authority of India at the Rourkela industrial site. Plans had been made back in 2007 for an air separation plant for this customer.

Synergies between our two core product segments also enabled us to conclude a number of strategically important contracts in Eastern Europe. We signed a further long-term on-site supply contract for industrial gases with the Hungarian chemical company BorsodChem Zrt. The agreement involves the construction by Linde of a new air separation unit (ASU) at BorsodChem’s Kacinzbarcika site in north-eastern Hungary for around EUR 26m. The new ASU is due to come on stream in November 2010. It will supply BorsodChem in Kacinzbarcika by pipeline with up to 7,000 cubic metres of gaseous oxygen and nitrogen per hour. The plant is also expected to produce liquefied oxygen, nitrogen and argon for the merchant market. Once this new investment is included, Linde will be operating two ASUs for BorsodChem for the supply of air gases and three steam reformers (Glossary) for the supply of gaseous hydrogen and carbon monoxide at Kacinzbarcika. Linde’s total investment at this site over the past few years exceeds EUR 200m.

In the countries of the former Soviet Union, we were able to transfer one plant in Lipezk, Russia, to the company NLMK, and another to our customer Norilsk Nickel based in Norilsk. The construction of the plants in the Russian towns of Novgorod and Kazan is also proceeding on schedule. We received an order from Linde Gas in the Ukraine to supply a GOX 3000 plant for the Mariupol site in the Ukraine. The Engineering Division will continue to support the expansion of our Gases Division in the CIS states. For this reason, we consolidated our presence in Russia in 2008 by setting up a city office in Moscow.

Through our Swiss subsidiary PanGas AG, we are building a new air separation plant in Muttenz, in the Swiss canton of Basel-Land, for around CHF 68m (EUR 44m). The new plant, which will have a capacity of over 500 tons of liquefied nitrogen, oxygen and argon per day, will come on stream in the late autumn of 2010. The new plant will be the largest and most modern in the region.

In addition to these projects, which have enabled us to reinforce our strong presence in the growth markets in particular, our international plant construction business has benefited from other developments. The EU directives on reductions in CO₂ emissions open up a most promising business area for us, i.e. carbon capture and storage (CCS). In 2008, we successfully brought on stream the air separation plant and carbon dioxide plant in Schwarze Pumpe, Germany, and transferred them to our customer Vattenfall for its oxyfuel pilot plant. LKCA-Dresden was awarded a contract by Vattenfall for a study of the construction of the oxygen and CO₂ plants for an oxyfuel demonstration plant and of the construction of a CO₂ post-combustion plant in Germany. We signed a contract with Vattenfall to set up a technology partnership for oxyfuel projects. To dispose of the CO₂ captured at Vattenfall’s pilot plant, LKCA also built a pilot plant in 2008 for intermediate storage and pressing at a former natural gas storage facility in eastern Germany. The operator of the natural gas field and contractor for this CO₂ plant is the company Gaz de France in Berlin.

Under the partnership agreement between RWE, BASF and Linde for the development of “detergents” to remove CO₂ from flue gas, LKCA was awarded the contract for a pilot plant to test these detergents. This plant will be built directly adjacent to one of RWE’s large-scale coal-fired power stations, to test the effectiveness of the detergents under real conditions and to obtain information for the implementation of the process at a large-scale plant.

LKCA also conducted studies for the energy group StatoilHydro in Norway, to determine how carbon dioxide captured from power stations can be cleaned, transported, compressed and finally pressed into the North Sea.