Linde Annual 2011

Clean Technology Solutions.The Linde Annual 2011.

¹ F&B:Food&beverages.² M&G:Metallurgy&glass.

Aquaculture&water

Beverages

Food

OtherF&B1

Energy

Fine&petro-chemistry

Pharma

Otherchemistry

Glass&fibreoptics

Heattreatment

Non-ferrous

Steel

OtherM&G2

Aerospace

Automotive

Heavyconstr.&machinery

Lightmetalfab.&prod.

Solar

Semi-conductor

Chippackaging

Hospitalcare

Homecare

Education&research

Retail

Distributors

Food &beverages

Chemistry & energy

Metallurgy & glass

Manufacturing industry

Electronics Healthcare Others

Othermanufacturing

GasTherapies

CareConcepts/REMEO®

CustomersegmentationwithintheGasesDivision

Broad,well-balancedcustomerbaseensuresstability.

NorthAmerica SouthAmerica Africa&UnitedKingdom Continental&NorthernEurope EasternEurope&MiddleEast South&EastAsia GreaterChina SouthPacific

TheLindeWorld

TheGasesDivisionhasthreesegments–EMEA(Europe,theMiddleEastandAfrica),Asia/PacificandtheAmericas.ThesearedividedintoeightRegionalBusinessUnits(RBUs).TheGasesDivisionalsoincludes the twoGlobalBusinessUnits (GBUs)Healthcare(medi-calgases)andTonnage(on-site),aswellasthetwoBusinessAreas

(BAs)Merchant&PackagedGases(liquefiedandcylindergases)andElectronics(electronicgases).

Active theworldover, theEngineeringDivision specialises inolefin,naturalgas,airseparation,hydrogenandsynthesisgasplants.

C3

Lindefinancialhighlights

¹ Adjustedfortheeffectsofthepurchasepriceallocation.² EBITDAincludingshareofincomefromassociatesandjointventures.³ Basispoints.

Corporateprofile

The Linde GroupTheLindeGroupisaworld-leadinggasesandengineeringcompanywitharound50,500employeesinmorethan100countriesworldwide.Inthe2011financialyear,itachievedsalesofEUR13.787bn.ThestrategyofTheLindeGroupisgearedtowardslong-termprofitablegrowthandfocusesontheexpansionofitsinternationalbusinesswithforward-lookingproductsandservices.Lindeactsresponsiblytowardsitsshareholders,businesspartners,employees,societyandtheenvironment–ineveryoneofitsbusinessareas,regionsandlocationsacrosstheglobe.TheGroupiscommittedtotechnologiesandproductsthatunitethegoalsofcustomervalueandsustainabledevelopment.

OrganisationTheGroupcomprisesthreedivisions:GasesandEngineering(thetwocoredivisions)andOtherActivities(Gist,thelogisticsservicepro-vider).Thelargestdivision,Gases,hasthreereportablesegments:EMEA(Europe,MiddleEastandAfrica),Asia/PacificandtheAmericas,whicharesubdividedintoeightRegionalBusinessUnits(RBUs).TheGasesDivisionalsoincludesthetwoGlobalBusinessUnits(GBUs)Healthcare(medicalgasesandrelatedmaintenanceandadvisoryservices)andTonnage(on-sitesupplyofgasestomajorcustomers),aswellasthetwoBusinessAreas(BAs)Merchant&PackagedGases(liquefiedandcylindergases)andElectronics(electronicgases).

Gases DivisionTheLindeGroupisaworldleaderintheinternationalgasesmarket.Thecompanyoffersawiderangeofcompressedandliquefiedgasesaswellaschemicalsandisthepartnerofchoiceacrossahugevarietyofindustries.Lindegasesareused,forexample,intheenergysector,steelproduction,chemicalprocessing,environmentalprotectionandwelding,aswellasinfoodprocessing,glassproductionandelectronics.TheGroupisalsoinvestingintheexpansionofitsHealthcarebusi-ness(medicalgases)andisaleadingglobalplayerinthedevelop-mentofenvironmentallyfriendlyhydrogentechnology.

Engineering DivisionLindeEngineeringissuccessfulthroughouttheworld,withitsfocusonpromisingmarketsegmentssuchasolefinplants,naturalgasplantsandairseparationplants,aswellashydrogenandsynthesisgasplants.Incontrasttovirtuallyallitscompetitors,theGroupisabletorelyonitsownprocessengineeringknow-howintheplanning,projectdevelopmentandconstructionofturnkeyindustrialplants.Lindeplantsareusedinawidevarietyoffields:inthepetrochemicalandchemicalindustries,inrefineriesandfertiliserplants,torecoverairgases,toproducehydrogenandsynthesisgases,totreatnaturalgasandinthepharmaceuticalindustry.

January to December

Changein€million 2011 2010

ShareClosingprice € 114.95 113.55 1.2%Yearhigh € 125.80 115.30 9.1%Yearlow € 96.16 76.70 25.4%Marketcapitalisation(atyear-endclosingprice) 19,663 19,337 1.7%

Adjusted earnings per share ¹ € 7.71 6.89 11.9%Earnings per share – undiluted € 6.88 5.94 15.8%Numberofsharesoutstanding(in000s) 171,061 170,297 0.4%

Sales 13,787 12,868 7.1%

Operating profit ² 3,210 2,925 9.7%

Operating margin 23.3 % 22.7% +60bp³

EBIT before amortisation of fair value adjustments 2,152 1,933 11.3%

Earnings after taxes on income 1,244 1,064 16.9%

Number of employees 50,417 48,430 4.1%

Gases Division Sales 11,061 10,228 8.1%Operatingprofit 3,041 2,766 9.9%Operatingmargin 27.5 % 27.0% +50bp³

Engineering DivisionSales 2,531 2,461 2.8%Operatingprofit 304 271 12.2%Operatingmargin 12.0 % 11.0% +100bp³

C4

Frontcoverfold-out:C3:TheLindeWorld/CustomersegmentationwithintheGasesDivision,C4:Corporateprofile/Lindefinancialhighlights

Our company values

Passion to excel.Innovating for customers. Empowering people. Thriving through diversity.

Our vision

We will be the leading global gases and engineering company, admired for our people, who provide innovative solutions that make a difference to the world.

C2

CleanTechnologySolutions.

Modernsocietydependsonanaffordable,reliable,environmen-tallysoundsupplyofenergy.Andsecuringthatsupplyisoneofthebiggestchallengeswecurrentlyface.Globaldemandforenergycontinuestorise,exposingourclimateandenvironmenttogrowingrisks.Thejourneytoacleanerenergyeconomyinvolvesthesystematicadvancementofrenewablesourcesofenergyandthedeploymentofnew,sustainabletechnologies.Lindecoversthefullcompetencechainrequiredtoefficientlyrecover,developandusetheearth’svaluableresources.Thecompanyalsohasabroadportfolioofcleantechnologies,puttingitinanexcellentpositionworldwidetocapitaliseonthefast-growingenergyandenvironmentalmarketsandmakeavaluablecontributiontoasustainableenergysourcingandsupplyarchitecture.

Front cover C2 Ourcompanyvalues C2 Ourvision C3 TheLindeWorld C3 Customersegmentation withintheGasesDivision C4 Corporateprofile C4 Lindefinancialhighlights

Back cover C5/C7 Reviewoftheyear C6 Glossary

LindeAnnual201102 Contents

04 Chapter 1

Theenergyofthefuture.05 DrFatihBirol,ChiefEconomistoftheInternational

EnergyAgency,ontheenergyofthefuture

10 Chapter 2

Extractingfossilfuels.16 Efficientcrudeoilandnaturalgasextraction18 Growingmarketfornaturalgasliquefaction18 Recoveringunconventionalreserves19 LookingtothefuturewithfloatingLNGfactories

20 Chapter 3

Usingnaturalgas intelligently.26 Sweden’sfirstLNGterminalatNynäshamn27 PoweringshipswithLNG28 OxygenforGTLproduction29 NewsourceofenergyforSoutheastAsia

30 Chapter 4

ManagingCO₂ theinnovativeway.39 SeparatingCO₂inpowerplants40 Europe’slargestoff-shoreCO₂injectionproject41 SpeedingupplantgrowthwithCO₂42 CO₂managementforalgaecultivation

44 Chapter 5

Growingpopularity ofrenewableenergies.53 Technicalleapsinthedevelopmentofsolarpower54 Environmentallyneutralgasesforsolarmodule

production55 Turningwasteintobiofuel56 Greenhydrogenfromglycerine

58 Chapter 6

Transitioning toahydrogensociety.64 IncreasingH₂mobility65 20newH₂fuellingstationsinGermany66 California’sgreenbuses67 Usinghydrogentostoreenergy

68 Imprint68 Contactinformation

03

Global energy supply is set to rise sharply in the years up to 2035.→→ Non-OECD countries¹ will account for sharpest rise in energy production.→→ Natural gas is set to grow in importance as a source of power.→→ Only OECD countries² will reduce their production of energy based on coal and oil.

Projected world energy supply, 2009 – 2035

→→Non-OECD→countries

→→OECD→countries

OECD: The Organisation for Economic Co-operation and Development unites 34 countries around the world in their commitment to democracy and market econ-omies. The OECD promotes policies that support sustainable economic growth, improve the economic and social well-being of people around the world, foster the development of non-OECD countries and thus contribute to an increase in global trade.

Source: World Energy Outlook 2011, New Policies Scenario, International Energy Agency.

Mtoe = Million tonnes of oil equivalent¹ Non-OECD countries: Mostly emerging or less developed economies with comparatively

low per-capita income. ² OECD countries: Mostly developed, industrialised countries with high per-capita income.

–→2,000→Mtoe

–→1,500

–→1,000

–→500

0

500

1,000

1,500

2,000→Mtoe

Oil Gas Coal Nuclear Biomass HydroOther→→renewables

Linde Annual 2011 1.→The→energy→of→the→future.04

1

rowing populations andeconomies are set tokeepdemandforenergyonanupwardpathoverthecomingdecades.Thistrendpresentstheenergyindustrywith a numberofdauntingchallenges.It

needstomeetrisingdemandinwaysthatarereli-able,affordableanddonotcompromisetheenviron-mentthatweleaveforfuturegenerations.Theindus-try’sabilitytorisetothesechallengesiscomplicatedbytheinterplayofanumberofdifferentfactors,mostofwhicharehardtopredictaccurately.Buttoday,moresothanever,theindustryisfacingaperiodofunprecedenteduncertainty–overtheeconomicout-look,overfuturepolicydirections –andthishasthepotentialtohamperinvestmentdecisions.

IEA’sanalysisofenergyandclimatetrends,out-linedindetailinourflagshippublicationtheWorld Energy Outlook,providesaquantitativelookattherisksandopportunitiesfacingtheglobalenergyecon-omyupto2035.Oneofthekeyconclusionsisthatthereisnosingle‘energyofthefuture’:howwepro-duceanduseenergyinthedecadestocomedependscruciallyonactions takenbygovernmentsaroundtheworld,thepolicyframeworkstheyputinplace,andhowtheenergyindustryandenergyconsumersrespond.Butlookingattheenergyandenvironmentalpoliciesthatareinplacetoday–andtakingacautiousviewontheprospectsforimplementationofnewpol-iciesthathavebeenannouncedbygovernments–wecanpointtosomeofthekeyconsiderationsandques-tionsthatwilldrivetheglobalenergyeconomy.

ThedynamicsofenergymarketswillincreasinglybedeterminedbydecisionstakeninBeijingandNew

Delhi.Theyear2009sawahistoricre-orderingofglobalenergy,asChinaovertooktheUnitedStatestobecometheworld’slargestenergyconsumer.Overthenexttwoandahalfdecades,countriesoutsidetheOECDareexpectedtoaccountfor90percentofglobalpopulationgrowth,70percentoftheincreaseineconomicoutputand90percentof the rise in

energydemand.ChinaandIndiarepresentaroundhalfthegrowthinglobaldemand–andChinaalonerepresentsalmostone-third,eventhoughby2035China’spercapitaconsumptionisstilllessthanhalftheleveloftheUnitedStates.

Ever-increasingdemandformobilitywilldriveoilmarkets.RisingincomesinChina,Indiaandothernon-OECDcountriesmeanssoaringownershipofvehicles –weexpecttheglobalpassengervehi-clefleettodoubleto1.7billionby2035.Thankfully,doublingthevehiclefleetdoesnotmeananequiv-alent rise in oil demand becausethe increase is moderated byimproved fuel economy and,inthemediumtolongterm,a

G

Theenergyofthefuture.DrFatihBirolisChiefEconomistoftheInternationalEnergyAgency(IEA).InthisarticlefortheLindeAnnual,helooksattheglobalenergyeconomyofthefuture,exploringwaysofbalancingtheconflictinggoalsofenergysecurity,climateprotection,energyaccessandeconomiccompetitiveness.

Over the next 25 years, countries outside the OECD are expected to account for 90 percent of the growth in energy demand.

→ Chapter 1

Dr Fatih Birol oversees the annual World Energy Outlook, which is the flagship publication of the IEA and is recognised as the most authoritative source for energy analysis and projections. He is also the founder and chair of the IEA Energy Business Council, which brings together leaders of some of the world’s largest energy companies and policymakers to seek solutions to global energy challenges.

Dr Birol has been named by Forbes Magazine among the most powerful people in terms of influ-ence on the world’s energy scene. Throughout his career, he has been awarded by many governments and institutions for his outstand-ing contri bution to the profession.

05

Beyond→crude→oil.

State-of-the-art technologies have the potential to enhance recovery of fossil fuels and reduce depen-dency on oil-producing countries.

There are good reasons on both the demand and supply sides to foresee a bright future, even a golden age, for natural gas.

growthinalternativefuelvehiclessuchasnaturalgasvehicles,flex-fuelcarsusing

eitherconventionaloilliquidsorbiofuels,electriccarsandhydrogenfuelcellvehicles.

Lookingatthesupplyside,technologyisunlock-ingnewhydrocarbonresourcesbuttheglobaloilsup-plyoutlookstilldependsoneventsintheMiddleEastandNorthAfrica.Theworldstillreliesonthisregionforthebulkofitsadditionalsupply–theexpectedgrowthinoutputfromthisregionby2035issettocover90percentoftheriseinglobaloildemand.However, the supplypicture is vulnerable toany

cut-backsininvestmentinthisregionthatmightbecausedbyincreasedperceptionsofriskorshiftingpolicyprioritiesaftertherecent‘ArabSpring’.Newsourcesofoilareemergingfromthedeepoffshore

orthe‘lighttightoil’thatisnowbeingdevelopedintheUnitedStatesbecauseofadvanceddrillingtech-niques.Thesetechnologiesalsobringnewrisks–inparticularenvironmentalrisks–thattheindustryhastoaddress.

TheUnitedStatesisthelargestoil-importingcoun-tryintheworldand,someyearsago,itwaswidelyexpectedthattheUnitedStateswouldalsobecomeamajorimporterofnaturalgas.Buttheboominuncon-ventionalgasproduction(mainlyshalegas)turnedthisexpectationonitshead.Now,acombinationofincreasedtransportefficiencyandincreaseddomes-ticoilsupplypromiseadrasticreductionintheUnitedStates’oilimportsaswell.By2015,oilimportstotheEuropeanUnionsurpassthosetotheUS,andaround2020,Chinabecomesthelargestsingleoil-importingcountry.TheEuropeanUnionisalreadythelargestimporterofnaturalgasintheworldandgasimportstoChinaandotherfast-growingAsianeconomiesarealsorisingrapidly.Thesechangingpatternsofglobaltrade prompt shifting concerns about the cost ofimportsandaboutoilandgassecurity,andafurthersea-changeinthegeopoliticsofenergy.

Therearegoodreasonsbothonthedemandandsupplysidestoforeseeabrightfuture,evenagoldenage,fornaturalgas.Weexpectthatdemandfornatural

LindeAnnual2011 1. The energy of the future.06

1

gaswill catch upwiththatforcoalby2035,withmostoftheadditionaldemandcom-ingfromcountriesoutsidetheOECD,notablyChina,IndiaandcountriesacrosstheMiddleEast.Forthesecountries,gasisaparticularlyattractivefuelinthemovetosatisfyrapidlyrisingenergydemandinfast-growingcities.Onthesupplyside,unconventionalgasnowaccountsforhalfoftheestimatedresourcebaseanditismorewidelydispersedthanconven-tional resources, a fact thathaspositive implica-tionsforgassecurity.Unconventionalproductionisexpectedtorisetoaccountforone-fifthoftotalout-putby2035,althoughthepaceofunconventionaldevelopmentvariesconsiderablybyregion –withtheUnitedStates,ChinaandAustraliatakingthelead.

Naturalgasisthecleanestofthefossilfuelsandsocanplayanimportantroleinthetransitiontoalow-carbonenergyfuture.However,increaseduseofgasin itself(withoutcarboncaptureandstorage;seeglossary)doesnotprovidetheanswertothechal-lengeofclimatechange.

Coalwasthebigwinneroftheenergyraceoverthelastdecade,butthefutureofthe‘forgottenfuel’islesscertain.

Coalaccountedfornearlyhalfoftheincreaseinglobalenergyuseover the lastdecade,with thebulkofthisincreasemeetingdemandforelectric-

ity in emerging economies,and coal has been instrumen-

tal in expanding access tomodernenergyservices.Theinternationalcoalmar-

ketisverysensitivetodevelopmentsinChina,whichaccountsforalmosthalfofglobalproductionanddemand, and increasingly also to India, whichis expected toovertake theUnitedStatesas theworld’ssecond-largestcoalconsumerandtobecomethelargestcoalimporterinthe2020s.Policyandtechnologychoiceswillbekeyinthesemarketsandelsewhere.Oneof thekeyquestionswillbehowtomitigatetheenvironmentalimpactsofcoalusethroughtheuptakeofmoreefficientpowerplantsandthedevelopmentoftechnologyforcarboncap-tureandstorage.

Theseprojectionsforoil,naturalgasandcoalintheglobalenergyeconomyindicatethattheageoffossilfuelsisfarfromover,buttheirdominanceissettodecline.Anexpansionofnuclearpowerpost-Fukushimaisstillonthecardsastherehasbeennochangeofpolicy in thekeycountriesdriving theexpansionof thenuclear industry suchas China,India,RussiaandKorea.Whatismore,renewablesaresettocomeofage,underpinnedbycontinuedgov-ernmentsubsidies.Theshareofrenewableenergy(excluding largehydropower) inglobalelectricitygenerationissettoincreasefromaround3 percenttodayto15 percentin2035,withtheEuropeanUnionandChinatakingtheleadinpushingtheintroductionofgreentechnologies.Windgeneration increasesbymorethaneighttimesby2035comparedwith2010.Thesubsidycostperunitofrenewableenergydeclines as costs are reducedand in some casesrenewable technologies are becoming competi-tivewithoutsupport,asforexampleonshorewindin theEuropeanUnionaround2020and inChinaaround2030.Butinmostcases,renewableenergyrequirescontinuedsubsidies:theglobalcostofsub-sidiesisexpectedtorisefromUSD66bnin2010toUSD250bnby2035assupplygrowsfromrenewable

The→future→of→coal.

Looking at the future of coal, one of the key questions is how to mitigate its environmental impacts through the uptake of more effi-cient power plants and the devel-opment of technology for carbon capture and storage.

The→emerging→favourite.

Natural gas is a particularly attrac-tive option for countries looking to meet rapidly rising energy demand in fast-growing cities. Unconventional gas resources are expected to account for a growing share of the resource base, partly due to the fact that they are more widely dispersed than conven-tional resources.

The age of fossil fuels is far from over, but their dominance is set to decline.

07

Additional CO₂ savings needed to limit global warming to 2°C.

→ New→Policies→ScenarioThe New Policies Scenario incorporates the broad policy commitments and plans that have been announced by countries around the world to tackle energy insecurity, climate change and local pollution, and other pressing energy-related challenges, even where the specific measures to implement these commitments have yet to be announced.

→ 450→ScenarioThe 450 Scenario depicts an energy pathway that is consistent with a 50 percent chance of meeting the goal of limiting the increase in average global temperature to 2°C compared with pre-industrial levels.

The graphic shows that CO₂ emissions will have to be drastically reduced in order to limit global warming to 2°C. This can only be achieved by deploying innovative technologies such as carbon capture and storage. A look at the Current Policies Scenario, however, shows that we are still a long way off target.

Source: World Energy Outlook 2011.

Gt = gigatonne

44→%→efficiency gains

21→%→renewable energies

4→%→biofuels9→%→nuclear

22→%→CCS technology

2°C→target

20352030

2025

2020

2015

2010161820222426283032343638

Gt

CO₂→em

ission

s→ba

sed→on

→New

→Policies→Scen

ario

CO₂→abatem

ent→n

eede

d→to→achieve→th

e→2°C→target

CO₂ emissions

Linde Annual 2011 1.→The→energy→of→the→future.08

1

sources. This delivers lasting benefits, such as a more diverse electricity mix and a reduction in emissions of greenhouse gases.

The experts assume that the contribution of hydro-power to global power generation will remain at around 15 percent in 2035, with China, India and Brazil accounting for almost half of the new capacity.

We should also not forget that the energy of the future is, for some, a future without energy. Today, 1.3 billion people do not have access to electricity and 2.7 billion still rely on the traditional use of biomass for cooking. Providing modern energy services would not cost the earth and would make a huge contribution to human development and welfare. However, without a significant increase in investment, the global picture is set to change little from today – and in sub-Saharan Africa it is set to worsen. National governments, inter-national institutions and the private sector all have vital roles to play.

Overall, there is much to be done to put the world on the path towards a more reliable and sustainable energy future – and there are few signs that the nec-essary change in direction in global energy trends is underway. According to our analysis, the world is in real danger of missing the chance to reach its long-term target of limiting the global average temperature increase to 2 degrees Celsius. If stringent additional action is not forthcoming by 2017, then the world’s capital stock – its power plants, buildings, factories and so on – will generate all the CO₂ emissions permit-ted under a 2-degree scenario up to 2035, leaving no room for additional power plants, factories and other infrastructure unless they are zero-carbon, which would be extremely costly.

The most important contribution to reaching global climate change objectives comes from the energy that we do not consume. A much greater focus on energy efficiency is vital – a real transformation in the way that we produce and use energy. Green technologies, nuclear power and technologies such as carbon cap-ture and storage all have important roles to play as well. If there is a substantial global shift away from nuclear power¹, or if carbon capture and storage tech-nology is not widely deployed already in the 2020s, this would make it harder and more expensive to com-bat climate change and put an extraordinary burden on other low-carbon technologies to deliver lower emissions.

In this context, policymakers and industry leaders must redouble their efforts to overcome the energy challenges that they share. At the heart of policy-making will be the difficult task of balancing the con-flicting goals of energy security, climate protection, energy access and economic competitiveness, while providing the energy industry with the long-term and stable framework that it needs to confidently move ahead with the huge investments that can transform our energy future.

¹ Our latest World Energy Outlook includes a ‘Low Nuclear Case’ in which nuclear capacity additions are one half of those anticipated in our central scenario. This creates some opportunities for renewable energy sources, but also boosts demand for fossil fuels sub-stantially, raising additional concerns about energy security and increasing CO₂ emissions.

We need to fundamen-tally change the way we generate and use energy.

The rise of renewables.

The share of renewables in the total energy mix is expected to rise from 3 percent to 15 percent by 2035. Despite the subsidies this will require, the IEA sees this as a positive global trend overall as it will result in a more ecologically sound energy balance and lower greenhouse gas emissions.

Innovative energy for mobility.

In the medium to long term, vehicles powered by hydrogen fuel cells, batteries, natural gas and biofuels are promising alter natives to the world’s rising mobility needs.

09

↳ The majority of the world’s energy needs are met with resources that we recover from below the earth’s surface. And this will continue to be the case for the foreseeable future.

2

Linde Annual 2011 2.→Extracting→fossil→fuels.10

Extractingfossilfuels.The efficient, environmentally sound way.

→ Chapter 2

11

Separating air to obtain natural gas.The two industrial-scale air separation plants operated by the Linde/ADNOC joint venture Elixier produce 670,000 cubic metres of nitrogen per hour. From this site in Mirfa, Abu Dhabi (United Arab Emirates), the nitrogen is transported inland via a 50-kilometre pipeline to the Habshan gas field, one of the largest in the region. The nitrogen is pumped into the natural gas field to increase recovery efficiency. This is a strategic project, as ADNOC has access to around 90 percent of Abu Dhabi’s crude oil and natural gas reserves – estimated to be the fourth largest in the world.


2

13


2

More people – more demand for raw materials. The world’s population is growing rapidly, with the earth now home to over seven billion people. This increase is fuelling demand for energy, particularly in emerging economies. And that rise in demand will continue to be met predominantly through fossil fuels.

15

enewable energies takecentre stage in publicdiscussions about futureenergysupplies.Yetthesedebatesoftenoverlookthefact that, in themediumterm, renewables suchaswater,windand solar

powerwillonlybeable tocovera fractionof theworld’srisingenergydemands.Industrialisedcoun-triesand–evenmoreso–boomingemergingmarketswillremainreliantonfossilcoal,naturalgasandcrudeoil fordecades to come. These resourcesmustbedevelopedefficientlywithminimalecologicalimpactinordertomeetrisingenvironmentalandclimatepro-tectionstandardsandensuresufficientreservesforfuturegenerations.

Lindeisatrustedpartnertomajorenergycompa-niesanditssophisticatedtechnologiesandprocesseshelpcustomersachievethesegoals.

Efficient crude oil and natural gas extractionIndustrialgasessuchasnitrogenplayacrucialroleinenhancedoilandgas recovery (EORandEGR).Pumpingnitrogenunderground,forexample,makesiteasiertoextractvaluablefossilresources.

↳ ElixierIIinaction:Theairsepa-rationplantsatMirfa,AbuDhabi,weredesignedandbuiltbyLinde’sEngineeringDivision.

+60%crude oil thanks to nitrogen.Nitrogen from Linde’s air separation plant in Cantarell (Mexico) enabled engineers to increase yield from the local oil field by 60 percent in the first year alone.

Innovativefossilfueltechnologies.Coal,oilandnaturalgaswillremainacrucialpartoftheworld’senergylandscapefortheforeseeablefuture.Innovativetechnologiesarekeytoensuringthatthesefossilfuelsarerecoveredefficientlyandconsumedwithminimalenvironmentalimpact.Lindehastheskillsandportfoliotomeettheneedsofthisdynamic,billion-eurogrowthmarket.

REnhancedoilandgasrecoveryrequireslargequan-tities of nitrogen. To meet this need, Linde hasdesignedandbuiltsomeoftheworld’sbiggestairseparationplantsinrecentyears.

Inthesummerof2011,twomajorfacilitieswentonstreaminthecoastaltownofMirfa(AbuDhabi,UnitedArabEmirates).LindewascommissionedtobuildtheseairseparationplantsbyElixier,ajointven-turebetweentheAbuDhabiNationalOilCorporation(ADNOC)andLinde,witha51and49percentstakerespectively.AtotalofaroundUSD800mwasinvestedinthisindustrial-scaleproject.

LindeAnnual2011 2. Extracting fossil fuels.16

2

Source: Linde estimates.

Thetwoplantsproducearound670,000normalcubicmetresofnitrogenperhourfromthesurroundingair.Thegasispiped50kilometresinlandtotheHabshanfield,whereitisinjectedintothegasreservoirstoensureconsistentyields–aboveallofcondensate–andraiseproductionlevels.Priortousingnitrogen,thecompanyinjectednaturalgasintotheHabshangasfieldtokeeppressuresteadyduringcondensateextraction.Now,thisvaluablerawmaterialcanbeusedtogenerateenergy in the rapidlyexpandingregion.

Mirfa isastrategicproject forthe internationalenergymarket as awhole. ADNOC has access toaround90percentofAbuDhabi’scrudeoilandnatu-ralgasreserves,andtheseareestimatedtobethefourthlargestintheworld.

ThenewairseparationplantsinMirfaarebasedonaprovendesignconcept:theyarealmostidenticaltothefivemajorairseparationplantsthatLindehasbuiltinCantarell,Mexico,since2000.Withintwelvemonthsoftheplantsgoingonstream,thenitrogentheyproducedincreasedcrudeoilyieldsbyaround60percentattheCantarellfieldintheGulfofMexico.

Expertspredictabove-averagegrowthratesfortheglobalEORandEGRmarket;increasingfromEUR1to1.5bnby2015andexpandingtoasmuchasEUR35bnby2030.

Enhanced→oil→and→gas→recovery.

Enhanced oil and gas recovery involves injecting gases, for example nitrogen, into an oil well at high pressure. The gases increase dwindling pressure in the oil or gas reserves, significantly raising yields.

N₂+ Oil/Gas

20

10

0

30

1 – 1.5

2015 2020 2030

4 – 5

18 – 35

Dynamic growth.Global demand for enhanced oil and gas recovery technologies (EUR billion).

17

atmosphere.AroundhalfoftheCO₂(approximately700,000tonnesperyear)isnowpiped2.6kilome-tresbelowtheoceanfloorandstoredthere.Thismile-stonecarboncaptureandstoragefacilitywillserveasareferenceprojectforfuturenaturalgasliquefactionplants.TheMelkøyafacilityhasearneditstitleasthemostenergy-efficientplantofitskindintheworld.

Recovering unconventional reservesInnovativedrillingtechnologiescombinedwithnewtransportandstorageoptionsareopeningupnatu-ralshalegasreservesthatwerepreviouslydifficulttoaccess.Worldwide,theseunconventionalreservescontainenoughgasforatleastthenext200years.

ShalegashasalreadytriggeredaboomintheUSenergy sector. Thanks to thesenew reserves, theUnitedStateshasnowovertakenRussiaastheworld’slargestnaturalgassupplier.Thisenergycarriernowaccountsforaround14percentoftheUSnaturalgasmarket,andtheInternationalEnergyAgency(IEA)expectsthisfiguretoriseto45percentby2035.IEA

Growing market for natural gas liquefaction Naturalgasisbecominganincreasinglyimportantfos-silfuel.Theworld’sgasreserveswilllastsignificantlylongerthandwindlingoildeposits.Naturalgasisalsomuchkindertotheclimate.

Companiesarethereforelookingtodevelopgasfields in regions and reservoirs that were previ-ouslyregardedas impossibleordifficulttoaccess.TheSnøvhitnaturalgasfieldintheBarentsSea,onthesouthernedgeoftheArcticOcean,isonesuchexample.ThegasisextractedfromthefieldbyNor-wegianenergygroupStatoil and transported140kilometresbypipelinetotheislandofMelkøya,nearHammerfest.Itisthenliquefiedinaspecialterminalbeforebeingtransportedincustom-builttankerstocustomersinsouthernEuropeandtheUS.

StatoilappointedLindeasthemaincontractorforthisproject,responsiblefortheengineering,procure-mentandassemblyofthenaturalgasliquefactionplant.Withaliquefiednaturalgas(LNG;seeglossary)productioncapacityoffourmilliontonnesperyear,itisthelargestfacilityinEurope.ThecontractwasworthoverEUR900mforLinde.

LNGisalsoagrowthmarket.Expertscurrentlyesti-matethattheglobalLNGengineeringmarketwillbeworthbetweenEUR3and4bnby2015,andexpectthistorisetoasmuchasEUR23bnby2030.ThesefiguresalsoincludeFloatingProduction,StorageandOffloading(FPSO)LNGunits(seepage19).

Storing CO₂ under the Barents SeaFor the Snøvhit project, Linde engineers wereresponsibleforbuildingthepurificationandlique-factionstages.Theywerealsotaskedwithcaptur-ingandcompressingmostoftheCO₂separatedfromthenaturalgasstream.TheideawastofeedtheCO₂backintothegasfieldinsteadofreleasingitintothe

Natural→gas→liquefaction.

In the liquefaction unit, raw gas is first fed through a system of pipes known as a slug catcher to separate the gas from condensate, water and glycol. Carbon diox-ide, mercury and any remaining water are then filtered out of the gas stream before the actual liquefaction process starts. The gas is liquefied in a multi-step cooling process tailored to local conditions on site. For the Melkøya plant, Linde developed a special, energy-efficient liquefaction process known as Mixed Fluid Cascade (MFC®; see glossary).

–700,000tCO₂ emissions using new natural gas liquefaction technology from Linde.At the Melkøya natural gas liquefaction plant, an environ-mentally friendly procedure known as carbon capture and storage is used to recover 700,000 tonnes of CO₂ each year and feed it back into the gas field. This process prevents the greenhouse gas from escaping into the atmosphere.

↳ GasstoragetanksatEurope’slargestnaturalgasliquefactionplant,ontheislandofMelkøyaofftheNorwegiancoastnearHammerfest.

LindeAnnual2011 2. Extracting fossil fuels.18

2

theendof2012.Commercialextractionandlique-factioncouldthenstartin2016.

Naturalgasisakeysteppingstoneontheroadtosustainable,environmentallysoundenergysup-plies.AndfloatingLNGfactoriesareoneofthebuild-ingblocksthatwillhelpenergycompaniesmakethemostofthiscrucialresource.

expertsalsoestimatethataround920trillioncubicmetres of natural gas is stored in unconventionalreservesacrosstheglobe.

Europeisalsohometounconventionalnaturalgasreservesofferingsizeablemarketpotential. Theseshalegas reservesare locked inalmost imperme-ablestoneandcoalseams,themostsignificantofwhicharelocatedinPoland,France,NorwayandtheUkraine.ReserveshavealsobeenfoundintheUK,theNetherlandsandGermany.

Backedbyitsexpertiseinextracting,liquefyingandstoringnaturalgas,Lindeisideallyplacedtocap-italiseonthisglobalgrowthmarket.

Separating nitrogen from natural gasLindehasdevelopedanitrogenrejectionunit(NRU)forLNGplants,whichalsohasthepotentialtoopenupreservespreviouslyregardedasuneconomical.Itdoesthisbyremovingalmostallthenitrogenfromnaturalgasstreams,enablingittomeettherequisitequalitystandards(lessthan1percentnitrogencon-tent)withahighenergydensity.

Attheendof2011,Lindesuccessfullystartedpro-ductionatanaturalgasliquefactionplantequippedwithanNRU.TheGroupbuiltthefacilityforitscus-tomerWoodside,Australia’slargestcrudeoilandnat-uralgascompany.TheplantprocessesnaturalgasfromthePlutoandXenafieldsoffthecoastofwest-ernAustralia.Thenaturalgasinthesereservescom-prisesover6percentnitrogen.Rectificationcolumns(seeglossary)intheNRUremovethenitrogenfromthenaturalgas,leavingitwithanitrogencontentoflessthan1percent.

ThenewplantputsLindeinastrongpositiontowinfuturecontacts inthisgrowthmarket.Expertsbelievethatmoreandmoredeveloperswillbeturn-ingtoreserveswithahighnitrogencontentinthecomingyearsinordertomeetrisingglobaldemandfornaturalgas.

Looking to the future with floating LNG factoriesNaturalgasextractionisnotlimitedtoextremecli-matessuchastheBarentsSea.Infuture,extractionwillalsomovefurtherawayfromcoastalwatersintotheopensea.Yetmanyreservoirsareeithertoofaraway from land forpipelines tobe laidorarenotlarge enough to be considered economically via-ble.LindeanditsprojectpartnerSBMOffshore(theNetherlands)areworkingonasolutiontothesechal-lenges.ThetwocompaniesaredevelopingfloatingLNGfactories,whichcanhelpmakesmaller,isolatedreservesmoreeconomicallyviable.

InJune2011,LindeandSBMsignedacoopera-tionagreementwiththeThaipetroleumgroupPTT(PetroleumAuthorityofThailand)todevelopafloat-ingLNGfacilityintheTimorSea,northofAustralia.Thefacilitywillliquefynaturalgasfromthreefields.Oncethescopeofthereserveshasbeenconfirmed,the projectwillmove into the concrete planningphase.Thefinalinvestmentdecisionisexpectedat

↳ (top)Linde’snaturalgasliquefactionplantislocatedofftheNorwegiancoastontheislandofMelkøya,nearthecityofHammerfest.

↳ (bottom)Atfullcapacity,aroundsixbillioncubicmetresofliquefiednaturalgaswillbeshippedfromhereeachyear.

Extreme→technology.

Building Europe’s largest natural gas liquefaction plant in the icy climes of northern Norway brought its own people and tech-nology challenges. The facility is now a reference project for future plants in the growing global LNG market.

19

→ Chapter 3

Usingnaturalgasintelligently.Cost-effective, climate-friendly solutions.

3

Linde Annual 2011 3.→Using→natural→gas→intelligently.20

World’s largest air separation plant contract.The world’s largest gas-to-liquids facility went on stream in 2011 in the State of Qatar. At full capacity, it produces 140,000 barrels of liquid hydrocarbons and 120,000 barrels of condensate, liquid petroleum gas and ethane per day. Eight large air separation plants built by Linde supply the facility with the oxy-gen it needs – around 860,000 cubic metres per hour.

21

Liquefied natural gas – around the world in tankers.Linde has opened its first LNG terminal, thus rounding off its LNG engineering portfolio. Since May 2011, Linde has been supplying the entire Baltic Sea region with liquefied natural gas from its Nynäshamn terminal in southern Sweden. The gas is liquefied at Linde’s Stavanger LNG facility and shipped to the terminal in stor-age tanks. Here it is stored for onward transport in a tank capa-ble of holding up to 20,000 cubic metres of LNG – in other words, around twelve million cubic metres of gas.

3


23

LNG worldwide

No need for pipelines.Liquefyingnaturalgasreducesitsvolumebyafactorof600,makingliquefiednaturalgas(LNG)anincreasinglyinterestingcommodity.Transport-inggasbypipelineisonlyeconomicallyviableuptoadistanceofaround3,000kilometres.LNG,however,canbetransportedacrosstheglobebyshipatatemperatureofminus162degreesCelsius.AccordingtoastudycarriedoutbytheCaliforniaEnergyCommission,therearenaturalgasliquefactionandexportmarineterminalsin15countries.Incontrast,thereare60importterminalsspreadacross18differentcountries.TheCommissionalsoreportsthat,inadditiontotheseexistingterminals,65liquefactionmarineterminalsandapproximately180regasificationter-minalprojectshaveeitherbeenproposedorarecurrentlybeingconstructedaroundtheglobe.

Across→the→globe→by→tanker.(Source: Linde Technology, 01.2011)

Alaska,→USA

Norway

Qatar

Abu→Dhabi

Nigeria

LibyaAlgeria

Trinidad&→Tobago

Oman

MalaysiaBrunei

Indonesia

Australia


3

LNG hubs

The benefits of small and mid-sized LNG plants.Lindecoversthefullcompetencechainforsmallandmid-sizedLNGplants.Thismarketsegmentisexpanding,asmorecompactandmicrodesignsoffernumerousbenefitssuchasshortplanningandconstructiontimelines.Theycanalsobeusedtoturnsmall,isolatedreservesintoeconomicallyviablesourcesoffuel,and,thankstotheirdimensions,canbebuiltclosetoindustrialparksandcities,thusshorteningthedistancetocustomers.Yetregardlessofsize,theirCO₂balancemakesthemarealbonusfortheenvironment.

Reference→plants:→selected→Linde→LNG→projects→across→the→globe.

Norway

Sweden

China

Australia

NynäshamnStavanger

Ji→Munai

Shan-Shan

Kwinana

Dandenong

25

Bridgingtomorrow’senergysupplies.

DStavanger liquefaction plant set to expandThenaturalgasfortheterminalinSwedenissourcedfromtheStavangerLNGplantinNorway.LindebuiltthisplantforthecompanySkangassASandputitonstreamattheendof2010.Itproduces300,000tonnesofLNGeachyear.Aroundonesixthofthisistrans-portedbytankertoNynäshamn,whereitisdistrib-utedbyLindethroughouttheBalticSearegion.

AttheheartoftheNynäshamnterminalisadou-ble-walledconcretetankwithadiameterandheightofalmost35metresanda storagecapacityofupto20,000cubicmetresofLNG.Thiscorrespondstoaroundtwelvemillioncubicmetresofgas,asLNGregasifiestosixhundredtimesitsliquidvolume.AsSwedendoesnothaveapipelinenetworktotrans-portthegas,theLNGispumpedintostoragetankson

emandfornaturalgas isrisingsteadilyworldwide,driven primarily by thefactthatitissignificantlykindertotheenvironmentthancrudeoilorcoal,and

releasesaround30percentlesscarbondioxidewhenburnt.

Thisupwardtrendisalsomobilisingtheliquefac-tionmarketasitfuelsdemandforplantstoliquefynaturalgas.

Sweden’s first LNG terminal at NynäshamnAsaleadinggasesandengineeringcompany,Lindeisideallyplacedtocapitaliseonthistrend.Globalmar-ketreachcoupledwithawideportfolioofproprie-tary,energy-savingliquefactiontechnologiesmeansthecompanycoverseverystepinthenaturalgaspro-cessingchain.

InMay2011,Lindeclosedthelastgapinthelique-fiednaturalgas(LNG)valuechainwhenitstartedpro-ductionatSweden’sfirstLNGterminalinNynäshamn,tothesouthofStockholm.TheGroupusesthefacilitytosupplyanumberofcustomers,includingtheneigh-bouringcrudeoilrefineryNynas.Inordertoprocesscrude,theNynasrefineryneedshydrogengas,whichitpreviouslyproducedfromnaphtha.Now,however,ithasswitchedtonaturalgasasfeedstock,reducingcarbondioxideemissionsbyupto58,000tonnesperyear.EnergycompanyStockholmGas isalsousingLNGfromtheterminaltoimproveitsclimatebalanceandexpectstocutitsannualCO₂footprintbyaround50,000tonnes.

Naturalgasisbecominganincreasinglyimportantenergycarrierandindustrialrawmaterialtheworldover.Thankstomatureliquefaction,storageandtransporttechnolo-gies,itcannowbedeliveredanywherearoundtheglobe–eventolocationsnotcon-nectedtoapipelinegrid.Buildingonitsowntechnologies,Lindemasterseverystepofthenaturalgasvaluechain,fromliquefactionthroughtransporttosafedeliveryatthefinalpointofuse.

Impressive→dimensions.

With a storage capacity of up to 20,000 cubic metres, the Nynäs hamn terminal is the largest of its kind in Europe.

–30%CO₂ emissions when other fossil fuels are replaced with natural gas.Natural gas is an environmentally sound alternative to other fossil fuels such as diesel, petrol or oil. When combusted, it releases significantly less carbon dioxide and emits no soot or particulate matter.

LindeAnnual2011 3. Using natural gas intelligently.26

3

trucksatatemperatureofminus162degreesCelsiusandeithertransporteddirectlytocustomersortoapipelinelinkwhereitcanbefedintoanexistinggasgrid.Atthesepoints,theLNGiscarefullyheatedinLinderegasificationplants,fromwhereitisdistrib-utedtoendcustomers.

TomeetthesteadyriseindemandforLNG,Skan-gass AS and Linde intend to double productioncapacityattheStavangerliquefactionplantandtheNynäshamnterminal.

Mid-sized plants growing in popularityEvenfollowingtheplannedincreaseincapacity,thesetwofacilitieswillstillbeclassifiedasmid-sizedplants.

Demandforfacilitiesofthissizeisrising,astheyoffernumerousbenefitsoverlarger,world-scaleprojects.Theycanbebuiltcloseto industrialparksandcit-ies,thusshorteningthedistancetocustomers.Theycanalsobeplannedandbuiltinshortertimeframes,turningsmall,isolatedreservesthatwouldotherwiseberegardedasimpracticalintoeconomicallyviablesourcesofgas.

Lindeoccupiesastrongpositioninthismarket,asitcoversalllinksinthetechnologyandcompetencechainrequiredtoengineerandequipmid-sizedLNGplants.Thecompany’spatentedcoolingprocess,forexample, consumes significantly lessenergy thanconventionalmethods.

Powering ships with LNGStrictenvironmentalregulationsinScandinaviaalsomakeLNGproducedattheNynäshamnterminalanincreasinglypopular,climate-friendlyfuel.TaxisatStockholmairport, forexample,musthavehybrid,electricorgasdrivetrains.InNorway,legislationstip-ulates thatcar ferriesmust runonnaturalgas.By2013,40shipswillbepoweredbyLNG,andmostofthesewillbeequippedwithLindetechnologies.

Ingeneral,theinternationalshippingbusinessismovingawayfromharmfulheavyoilinfavourofnatu-ralgasinordertosignificantlyreduceCO₂,sulphurandnitrogenoxideemissions.In2015,sulphurthresholds

+10%demand for liquefied natural gas each year.LNG is easier to transport than conventional natural gas, mak-ing it an increasingly popular option.

Putting→an→end→to→boil-off→losses.

More and more LNG tankers are being equipped with relique-faction units, a technology that enables evaporated gas to be reliquefied in transit. In tankers not equipped with these units, up to 3 percent of the LNG payload can boil off during a twenty-day journey.

27

11– 23

CO₂,sulphurandmoisture,allofwhichhavetoberemovedbeforeitcanbecooledandliquefiedinspe-cialheatexchangers.

TheplantwhichLindeputonstreaminWestbury(Tasmania)inJanuary2011ispartofasupplynet-work for regional haulage companies in the tim-berindustry.Thecompanieswillhaverecoupedthecostofconvertingvehiclesfromdieseltonaturalgaswithinjustthreeyears,asnaturalgascostslessthandieselandLNGengineslastlonger.

Oxygen for GTL productionThe huge potential of natural gas as a source ofenergy isparticularlyevidentat thePearlgas-to-liquids(GTL;seeglossary)plantoperatedbyQatar-ShellGTLLtd.inRasLaffanIndustrialCity,Qatar.Thisisthelargest integratedcomplexof itskindintheworld.Atfullcapacity,itproducesaround140,000barrelsofliquidhydrocarbonsperdayfromnaturalgas.Theseincludenaphtha,GTLfuels,paraffin,kero-seneandlubricants.Theplantalsoproducesaround120,000barrelsofcondensate,liquidpetroleumgasandethaneperday.

Theethaneisprocessedintoethylene,whichisusedatthesitetomakeplastics.

Lindehasbuilteight largeair separationunitsforthePearlcomplexonbehalfofQatar-ShellGTLinrecentyears.Atfullcapacity,theseunitswillbepro-ducingaround860,000cubicmetresofoxygenperhourfrommid-2012.Theoxygenwillbeusedacrossthewidestrangeofproductionprocessesatthecom-plex.Lindewasawardedthecontractin2006 –thelargestevertohavebeentenderedforairseparationplants.

Workonthisuniquenaturalgasandchemicalcom-plexstartedinFebruary2007.Attheheightofcon-structionactivity,upto52,000peoplefromaround50countrieswereworkingonthePearlGTLsite.Mostoftheworkwascompletedbytheendof2010andthefirstnaturalgasfromtheoffshorefieldstartedflow-ingintotheplanton23March2011.ThefirstfourairseparationgiantswentonstreaminMay2011.

ThenaturalgasforthecomplexisextractedfromtheNorthField(60kilometresoffthecoastofQatar)bytwodrillingplatforms.Thefieldcontainsaround15percentofallknowngasreserves,makingitoneofthelargestgasdepositsintheworld.

formarinetrafficintheNorthandBalticSeaswillbeloweredfromtoday’s1.5percentto0.1 percent.Andthis0.1percentsulphurthresholdalreadyappliestoshipsatberthinEuropeanportstoday.

Majorcruiseshipoperatorsandwell-knownship-yardssuchasMeyerWerft(Germany)arealsoassess-ing the environmental benefits of LNG-poweredenginesfornewships.

Ifnaturalgasistocapturetheshippingmarket,however,itmustbebackedbyaglobalnetworkofport-side LNG terminals. And Linde’s terminal inNynäshamnisanimportantreferenceprojectforjustsuchanetwork.

LNG for haulage in AustraliaInAustralia,LindeisexploringthebenefitsofLNGforlong-haulroadtransport.AnetworkofLNGfuel-lingstationsisspringingupalongthecountry’seastcoastandontheislandofTasmania,enablingdriversofheavygoodsvehicles(HGVs)tocapitaliseonthiscomparativelyclimate-friendlyandpredictablypricedfuel.

Toadvancethisnetwork,Lindehasalreadybuiltthree smaller-scale facilities knownasmicro-LNGplants.TheGroupisalsomodernisingitsDandenongplantnearMelbourne.Thefacilityhasbeeninopera-tionforoverthirtyyearsandwillnowseeitsproduc-tioncapacityincreaseto100tonnesofLNGperday.

Linde’smicro-LNGplantinChinchilla(Queensland)usescoalseamgasasfeedstock.Thegascontains

At→home→on→land→and→sea.

Liquefied natural gas is a particu-larly promising fuel for marine traffic. Increasingly strict environ-mental regulations are prompting a growing number of shipping companies to consider switching to more environmentally sound LNG-powered engines.

Promising market.Global demand for LNG plants (EUR billion).


3 – 4

2015 2020 2030

6 – 10

20

10

0

LindeAnnual2011 3. Using natural gas intelligently.28

3

New source of energy for Southeast AsiaLNG is becoming an increasingly important source of energy, especially in the fast-growing region of South-east Asia. The rapid pace of industrialisation, rising oil prices and the need to extract resources from remote regions and islands are accelerating the adoption of LNG as a source of electricity, in particular. Here also, reserves that had previously been seen as economi-cally unviable are now moving into focus thanks to sophisticated extraction technologies, liquefaction processes and the possibility of transport by sea. Tax incentives from governments looking to promote domestic energy resources and reduce dependency on foreign imports are providing additional impetus.

The need for energy is rising sharply across the mining industry in eastern Indonesia, for example. In future, the raw materials extracted here will have to be processed within the country before being exported. The spotlight is increasingly shifting to local, stranded gas fields (see glossary) and lique-faction to meet these rising energy requirements.

Linde and Pertagas (PT Pertamina Gas) are cur-rently assessing the economic viability of a mid-sized LNG plant on the island of Pulau Dua to capture gas from the Salawati field. The plant would produce 300 tonnes of LNG per day and be equipped with a 7,500 cubic metre storage tank and a docking area for ships. The LNG would be taken to the island of Halmahera, where it would be used to generate electricity for the nickel processing industry.

Similar to Indonesia, Malaysia, Vietnam and Singapore are looking to open up previously inaccessible natu-ral gas reserves with the help of small and mid-sized LNG plants.

As a producer and supplier of LNG, Linde is actively helping to develop the market in Southeast Asia. The company’s energy-efficient technologies play an important role in enabling these countries to capi-talise on their natural resources without harming the environment.

International team.

At the height of construction activity, 52,000 people from 50 countries were working on the Qatar site.

High output.

The GTL plant in Qatar produces around 140,000 barrels of liquid hydrocarbons per day, including naphtha, GTL fuels, paraffin, kero-sene and lubricants.

860,000 m³oxygen produced each hour at eight air separation plants in Qatar.This enables Linde to meet the oxygen needs of the world’s largest gas-to-liquids plant in Qatar.

29

↳ CO₂ speeds up plant growth in Dutch greenhouses.

4

30 Linde Annual 2011 4.→Managing→CO₂→the→innovative→way.

→ Chapter 4

ManagingCO₂theinnovativeway.Sustainable,high-yieldopportunities.

31

Recovering CO₂ emissions to promote plant growthEachsummer,350,000tonnesofcarbondioxidefromaShelloilrefinerynearRotterdamarefedintohundredsofDutchgreenhouses.Theannualgreenhousegassav-ingsfromthisintelligentrecyclingsolutioncorrespondtotheCO₂emissionsofalargeWesternEuropeancity.AsmallervolumeofrecoveredCO₂isalsosuppliedtothefoodindustry,whereit isusedtokeepproducts

fresh.AsthegreenhousesdonotrequireCO₂duringthewinter,Linde–throughtheOCAPjointventure–iscurrentlyworkingonwaysofstoringthewinterstreamindepletednaturalgasfieldssouth-eastofRotterdam.Thesestoreshavethecapacitytoaccommodateemis-sionsforthenextthirtyyears.

↳ Tomatoes(shownhereincrosssection)needanoptimumsupplyofcarbondioxide.

LindeAnnual2011 4. Managing CO₂ the innovative way.32

4

↳ Stronger,bigger,greener–cucumbers,tomatoesandlettucegrowfaster,yieldlargercropsandaremoreresilientthankstoCO₂.

33

↳ Algae are cultivated in open ponds, where they are fed with light and CO₂.


4

FedonadietofsunlightandCO₂,algaeproduceoxygenandgreencrude.AlgaefarmersthereforeneedlargeamountsofCO₂.

CO₂in–fuelout.

↳ Lindepartner:AnalgaefarmownedbyUScompanySapphireinSanDiego(California).

35

Unexpected, promising new talentBlue-green algae produce approximately 350 litresofethanolfromonetonneofCO₂–anidealclimate-neutralfuelforthecarsoftomorrow.LindeandUSalgaeexpertAlgenolhaveformedaresearchcollaborationtounlockthepotentialstoredinthesemini-factoriesfromthesea.Linde’sgasexpertsareresponsibleforcaptur-

ing,scrubbingandtransportingtheCO₂.TheexpertsatAlgenolaremaking thecyanobacteriamoreeffi-cient.ThenewhybridalgaerecycleCO₂andconvertittoenergy.Theyalsoreplacefossilfuels,whichmeanstheyhaveanegativeCO₂balance.

↳ Microscopicimageofablue-greenalgae(cyanobacterium).


4

↳ As traffic increases, so does the need for new, more eco-friendly fuels such as algae-based bioethanol.

37

Carbondioxide(CO₂)isanaturalpartofouratmosphere.Itplaysavitalroleinfoodproductionandmanyotherindustrialprocesses.YetCO₂isalsoresponsibleforclimatechange.Whichiswhyweneedtoreduceglobalemissionsofthisgreenhousegasandlearntoreuseitintelligently.LindehasthetechnologiestoachievethesegoalsalongtheentireCO₂valuechain.

Reduce,reuse,restore.

↳ CoalpowerwithreducedCO₂emissions–oxyfuelpilotprojectinSchwarzePumpe,Germany.


4

Vattenfall→tests→oxyfuel→process→with→support→from→Linde.

Oxyfuel technology is an innova-tive example of CO₂ recovery dur-ing energy production. It in volves injecting pure oxygen instead of air into the coal combustion furnace. The resulting CO₂ can be captured and sequestered.

ccording to the Interna-tionalEnergyAgency(IEA),global energy demand isset to double by 2050 –fuelledbydynamicindustri-alisationinemergingecon-omiessuchasChina,Indiaand Brazil. To meet thisdemand, fossil fuels will

havetoremainpartoftheenergymixfordecadestocome.Thiscallsforinnovativetechnologiesthatallowfossilresourcestobeharnessedwithaslittleimpactontheclimateaspossible.

CO₂managementprocessesdevelopedbyLindeengineersandtechniciansarealreadymakingavitalimpactherebyenablingenergytobeefficientlygen-eratedandconsumed.

Separating CO₂ in power plantsPre-combustion capture removes CO₂ from fuelsbeforecombustion.Ittakesplaceinacombinedcyclepowerplant,alsoreferredtoasacombinedcyclegasturbine(CCGT),and involvesaprocesscalled inte-gratedgasificationcombinedcycle(IGCC;seeglos-sary).Duringthisprocess,pureoxygenisusedtoturnpulverisedcoalintoasynthesisgas(seeglossary),primarilycomprisingcarbonmonoxideandhydrogen.Inasecondstep,steamisusedtoconvertthemajor-ityofthecarbonmonoxideintocarbondioxideandadditionalhydrogen.Thecarbondioxidecanbeeasilyremovedbyscrubbing,allowingittobedesulphurisedandcompressedorliquefied.Inthisstate,theCO₂canthenbereusedorstored.

Duringoxyfuel combustion, CO₂ is separated fromthefluegasesthatareemittedwhencoalisburnt.Theseemissionsprimarilycomprisecarbondioxideandsteam.Bysimplycoolingthefluegases,therela-tivelypureCO₂canbeeasilyseparatedandcapturedfromthesteam,allowing it tobecompressedandtransportedtoastoragesite.Theoxygenusedduringcombustionisproducedinanupstreamairseparationplant.Themajorityofthenitrogen-freefluegasisfedbackintothefurnacewhereitisusedtoregulatetheflame.Theoxyfuelprocessgenerateshightempera-

tures–afurtherbenefitthatincreasespowerplantefficiency.

Linde has joined forceswith Vattenfall EuropeTechnologyResearchGmbHtofurtherdeveloptheoxyfuelprocess.Thisextensivetechnologypartner-shipfocusesontestingthecombustionprocedureforligniteandanthraciteanddevelopingthetechnologyforuse in large-scalepowerplants.Vattenfallhasbeenoperatinga30megawattpilotfacilitysinceSep-tember2008atitslignitepowerplantsiteinSchwarzePumpe,intheGermanstateofBrandenburg.Lindedeliveredawiderangeofcomponentsforthisprojectanddesignedtheoverallprocessarchitecture.SomeofthecarbondioxidefromtheSchwarzePumpeplanthasalreadybeensuccessfullycompressedaspartoftheCO₂MANresearchprojectinKetzin(Brandenburg).

In2011,Lindewasawardedafurthercontractforcarboncaptureandstorage, this time in Italy.ThecompanywillbesupplyingenergygroupENELSpAwithCO₂scrubbing, liquefactionandstoragetech-nologyforitscoal-firedpowerplantFedericoII,nearthecityofBrindisi.TheplantwillserveasapilotCCSproject fora larger facility in thePortoTollecoal-firedpowerplant.ItisbeingfundedbytheEuropeanUnion.

A


Promising market.Global demand for CO₂ networks (EUR billion).

15 – 25

2015 2020 2030

1

20

10

0

+20to40EUR billion demand for CCS technologies between now and 2030.The market for carbon capture and clean coal is extremely promising. Experts predict that the global market will grow to between EUR 20 and 40 billion by 2030.

39

CO₂ delivery

Caprock

Caprock

Sandstone/CO₂ reservoir

800 m

Sens

ors

Sens

ors

←←←

←←←

CO₂ reservoir (filled)

CO₂ CO₂

Inje

ctio

n an

d co

mpr

essi

on

CO₂MAN→research→project

Since June 2008, the CO₂MAN proj-ect has been pumping 1.5 tonnes of CO₂ per hour into plutonic rock through arm-width pipes at a pilot site for CO₂ storage in Ketzin. The CO₂ is injected into a saline aquifer featuring porous sandstone reser -voirs filled with highly concen tra-ted salt water. If the gas is injec-ted at high enough pressure, some of it dissolves into the water. The rest of the CO₂ forces the water out through the pores in the rock. Measurements made here will give the first detailed picture of how CO₂ dissipates underground. The most important question of all is whether the final storage site is leak-proof. The prevailing view among geologists is that the layer of plaster and clay that caps the several square-kilometre sandstone formation should be completely impenetrable, even if it had to cope with ten times the planned volume of 60,000 tonnes of CO₂.

The majority of the CO₂ for Ketzin is sourced from the Leuna chemical park, 175 kilometres away, where it occurs as a by-product of ammonia synthesis. Linde purifies and treats the CO₂ in a multi-step process, and lique-fies it at temperatures of between minus 35 and minus 25 degrees Celsius. The Group then transports the liquid CO₂ by truck to Ketzin, where it is temporarily stored (as a liquid) in tanks. The CO₂ is gasified before being pumped 700 metres below ground at a pressure of between 70 and 100 bar.

Post-combustion CO₂ capturePost-combustionCO₂captureusesscrubbingagentstoseparatecarbondioxidefromthefluegasesofcon-ventionalcoal-firedpowerplantsfollowingdesulphu-risation.Thisistheonlyprocessthatcanberetrofittedtoexistingpowerplants,andisthereforeparticularlyimportantforclimate-friendlyenergysuppliesinthenearfuture.

Themostimportantcomponentinpost-combus-tion scrubbing is the absorber. This iswhere thehot,desulphurisedfluegascomesintocounter-flowcontactwithascrubbingagent.Thisaqueoussolu-tioncomprisesamines,agroupoforganicsubstancesthatabsorbtheCO₂inthegasstream.Oncethefluegashaspassedthroughtheagent,itonlycontainslowlevelsofCO₂.Beforeleavingtheabsorber,itissprayedwithwatertoremoveanyremainingtracesofthescrubber.Thefluegasisthenreleasedintotheatmosphereviachimneystacksorcoolingtowers.ThescrubbedCO₂isheatedinadesorberandremoved

Europe’s largest off-shore CO₂ injection projectLindeisinvolvedinanotherlandmarkprojectofftheNorwegiancoastnearHammerfest,attheliquefactionsitefornaturalgasextractedfrombelowtheBarentsSea.LindeisnowliquefyingtheCO₂separatedfromthenaturalgasstreamandfeedingitbacktowhereitwasoriginallysourced,theSnøvhitnaturalgasfield(seepage18).Thismethodisusedtostorearoundhalf theCO₂generatedat the site (approximately700,000 tonnes a year) 2.6 kilometres under theoceanfloor.Onceunderground,theCO₂bondswiththerockandissafelyencapsulated,over100kilo-metresfromthenexthumansettlement.

↳ PilotCO₂scrubbingplantoper-atedbyRWE,BASFandLindeinNiederaussem,Germany.Thepartnersexpecttheprocesstobecommerciallyviableforlig-nitepowerstationsinGermanyby2020.

–90%CO₂ in power plant flue gases.The post-combustion process separates carbon dioxide after desulphurisation. Once this has been done, the majority of the flue gas can be stored underground. Post-combustion capture is currently the only CO₂ scrubbing process that can be retrofitted to existing power plants.


4

theOrganicCO₂ forAssimilationbyPlants (OCAP)jointventure,LindeandtheconstructioncompanyVolkerWesselsareworkingtogethertosupplyover550greenhouseswithCO₂.TheCO₂issourcedfromaShellrefinerynearRotterdamandpumpedtocustom-ersviaan85-kilometrepipelinelinkedtoa300-kilo-metredistributionnetwork.Over350,000tonnesofCO₂arerecycledinthiswayeachyear.

Thegaspromotesphotosynthesis,enablinggreen-houseoperatorstoshortengrowthtimesfortoma-toes,cucumbers,lettucesandothertypesofvegeta-ble.Beforethisinitiative,operatorsusedtogeneratetheextraCO₂themselvesbyburningnaturalgasintheirownfurnaces.

UsingCO₂fromtherefineryeliminatestheneedtocombustaround105millioncubicmetresofnatu-ralgasandavoids190,000tonnesofCO₂emissionseachyear–afootprintthatcorrespondsroughlytotheannualemissionsofaEuropeancitywith150,000inhabitants.

Greenhouseoperators,however,onlyneedtheCO₂fromtherefineryinsummer.Inwinter,theycanuse the carbondioxidegenerated from theheat-ingsystemstheyusetoheattheirgreenhouses.TheOCAPpartnersarethereforelookingtopumpexcess

fromtheliquid.Thescrubbingagentisthencooledandpumpedbacktotheabsorberforanotherscrub-bingcycle.

EnergyproviderRWEPowerhasbeentestingthistechnologysincesummer2009inapilotfacilityatitslignite-firedpowerplantinNiederaussem,intheGer-manstateofNorthRhine-Westphalia.Theprocesscanremoveover90percentofCO₂fromapowerplant’sfluegases,enablingittobestoredunderground.

LindehasaccumulateddecadesofexperienceinCO₂scrubbingthroughitscollaborationwithvariouscompaniesfromthechemicalindustry.Since2007,thecompanyhasbeenpartneringcloselywithRWEandthechemicalgroupBASFtorealisethepilotCO₂scrub-bingplant inNiederaussem.Lindeconstructed thescrubbingunitfortheRWEpowerplant,whileBASFprovidednewsolventsforlong-termteststodeter-minethemostefficientmethodofcapturingcarbondioxide.Allthreepartnersaimtomakecarboncap-turecommerciallyviableforlignitepowerplantsinGermanyby2020.TheseplantsareamajorsourceofenergyinGermany.

TheCCSandcleancoalmarkethashugepotential.ExpertspredictthattheglobalmarketwillbeworthbetweenEUR20and40bnby2030.

PartofthisgrowthwillbefuelledbyNorthAmer-ica,wheredemandforcleancoalsolutionsisrisingsteadily.Lindeisalsoadvancingcarboncapturetech-nologiesforcoal-firedpowerplantsintheUS.TheUSDepartmentofEnergy(DoE)isprovidingUSD15minfundingforapilotplantinWilsonville,Alabama.From2014onwards,thefacilitywillbeusedtotestinno-vativeCO₂scrubbingprocessesaimedatidentifyingthemostenergy-efficientandcost-effectivecarboncapturemethods.Lindeplanstoseparateatleast90percentofthecarbondioxidefromtheplant’sfluegaseswithoutincreasingenergycostsbymorethan30percent.

Speeding up plant growth with CO₂Aproject in theNetherlands is showing just howuseful recycledCO₂canbe.Under theumbrellaof

↳ (left)GreenhousesrequirealotofCO₂.Lindeensuresasteadysupply.

↳ (right)ExemplaryCO₂infra-structure:CarbondioxidefromarefinerynearRotterdamistransportedtoDutchgreen-housesviaadensenetworkofpipes.TheCO₂isusedtoincreaseplantyields.

–190,000tCO₂ each year thanks to Linde’s OCAP joint venture in the Netherlands.Carbon dioxide emitted from a Shell oil refinery near Rotterdam is used for speeding up vegetable and plant growth in Dutch greenhouses. The amount of CO₂ recycled in this project cor-responds roughly to the annual emissions of a European city with 150,000 inhabitants.

41

The→Algenol→process.

Algenol cultivates the algae in special photobioreactors that allow sunlight to shine through, providing the bacteria with an energy source. The large oblong bags are filled roughly up to the quarter mark with the algae/ saltwater mixture. The heat of the sun causes a mix of ethanol and water to vaporise and collect in the space above the mixture. The gas can be collected at night when it cools, condenses and runs off along special grooves on the plastic surface. The liquid contains approximately 1 percent alcohol. The algae experts aim to produce up to nine litres of ethanol per square metre each year. Algae cultivation does not threaten land needed for food production, as facilities can even be built in desert regions.

releaseoxygenand,undertherightconditions,pro-ducebioethanol.

Theblue-greenalgaeareaparticularlyinterestingoptionforfuelastheycanprocesssignificantlymoreCO₂thanotherplants.Maizeplants,forexample,canbeusedtoproduce0.37litresofethanolpersquare

carbon dioxide into depleted natural gas fields.Thesestoreshavetheannualcapacitytoaccommo-datearound280,000tonnesoveraperiodofalmost30years.Storagecapacityisevenexpectedtorisetoover400,000tonnesinafewyears,whenafur-therreservebecomesavailable.OCAPaimstotrans-porttheCO₂totheemptynaturalgasfieldsvianewpipelinesandusecompressorstocondenseitforstor-age.ThefirstCO₂streamissettoenterthestoragesitesin2013.Inthelongterm,thepipelinenetworkcouldalsobeexpandedtosupportoffshorecarbonstorage.

CO₂ management for algae cultivationIntheUS,Lindeis involvedinanotherparticularlypromisingCO₂recyclingproject.Thegasisbeingusedinanumberofpilotplantstosupportthemetabo-lismofalgae thatproduceenvironmentally soundfuels(greencrude)andbasechemicals.Thesesalt-watermicroscopiccyanobacteria,alsoknownasblue-greenalgae,needjustsunlightandcarbondioxidetometabolise.Thesunlighttriggersphotosynthesis,causingthealgaetoinhaleCO₂anddrinkthesalt-water inwhichtheylive.Duringthisprocess,they

↳ Sophisticateddevelopmentprocess:Overalongseriesoftests,scientistshavecultivatedhybridalgaewithametabolismthatspecificallyincreasesbio-oilproduction.

9litresof ethanol per square metre of algae – Algenol and Linde’s shared vision.Genetically modified blue-green algae produce green crude when supplied with CO₂ from flue gases. Today, scientists can obtain 5.6 litres of bioethanol from an area of one square metre. Linde and Algenol aim to raise this to nine litres per square metre.


4

Widespreadcommercialadoptionofalgaeasacli-mate-friendlysourceofenergyhingesoneconomicviability.Inordertotestthisonalargescale,LindeenteredacooperationagreementwithUScompanySapphireEnergy,oneoftheworld’sleadingmanu-facturersofalgae-basedrenewablegreencrude.InMay2011,thetwopartnersagreedtoco-developacarbondioxidemanagementsystemforcommercial-scalealgae-to-biofuelplants.LindewillalsosupplyalloftheCO₂neededforSapphire’scommercialdemon-strationfacilityinColumbus,NewMexico.

SapphireEnergyhasdevelopeditsowntechnolo-giesfortheentirealgae-to-biofuelvaluechain,fromthebiologicalprocessandcultivationthroughharvestandextractiontorefining.Theresultinggreencrudecanbeusedtoproducefuelssuchaskerosene,dieselandpetrol–allofwhichcanbeusedwithoutdifficultyinexistinginfrastructuresandengines.Viewedalongtheentireprocesschain,greencrudegeneratedfromalgaereducesCO₂emissionsby70percentcomparedwithfuelsmanufacturedfromregularpetroleum.

TheglobalmarketfortheinstallationofCO₂man-agementnetworksisexpectedtorisetobetweenEUR15and25bnby2030.

Looking to a greener futureUsing CO₂ to produce regenerative fuels has thepotentialtosignificantlyreducegreenhousegases.Asinglecommercialalgae-to-fuelproductionfacil-itybasedonSapphire’smodelrequiresanestimated10,000tonnesofCO₂perday.Thiscorresponds toaround30percentofthecurrentmerchantmarketforCO₂intheUS.

metre.Incontrast,thesameareaofblue-greenalgaecancurrentlybeusedtoproduce5.6litres.Andscien-tistsaimtoincreasethisto9litrespersquaremetreinthefuture.

LindeisworkingwithUScompanyAlgenolBiofuelstoprovidethemostcost-andenergy-efficientCO₂managementsystemforthealgaefarmsoftomor-row. Theaimof the collaboration is to scrub fluegasesfromcoal-firedpowerstationsandrefineriestojusttherightpoint,sothatthemicroorganismsdonotdie.Everyadditionalstep–whetherpurification,compressionorliquefaction–consumesenergyandincreasesthecarbonfootprintoftheentireprocess.TheultimateaimistoachieveanegativeCO₂balance,ensuringthattheprocessremainsecologicallyandeconomicallyviable.

ScientistsatAlgenolBiofuelshavedevelopedaparticularlyefficienttypeofalgae.Unlikeconven-tional species, this variety also produces ethanolwhenexposed toplentyof sunlight,andsecretesthisintotheseawaterculture.Thereisamajorbene-fit to this direct process, as the ethanol can beobtainedstraight fromthegreensolutionwithouthavingtoharvestthealgae.Thiskindofalgaecanproduce approximately 350 litres of ethanol fromonetonneofCO₂.

↳ SapphireEnergy:Thebio-oilorgreencrudeproducedintestlabscanbeusedtomakefuelssuchaskerosene,dieselandpetrol.

–70%CO₂ emissions with green crude. Generating biofuel from algae cuts CO₂ emissions by 70 percent compared with fuels obtained from conventional crude oil.

43

↳ Full of energy: Solar modules cover the facade of Suntech’s headquarters in Wuxi. Linde supplies the Chinese solar cell manufacturer with speciality gases.

5

Linde Annual 2011 5.→Growing→popularity→of→renewable→energies.44

Growingpopularityofrenewableenergies.Unlimited, widely available riches.

→ Chapter 5

45

Steady→source→of→power→from→space.Unlike fossil fuels, solar energy is unlimited in sup-ply. Solar power does not release greenhouse gas emissions or damaging soot particles when used. Linde has been working with a network of solar cell manufacturers to develop a procedure that will make

tomorrow’s solar technology even more efficient and economically viable. Manufacturers can now signifi-cantly cut the amount of emissions released during energy-intensive solar cell production by using the environmentally neutral gas fluorine.

Solar

LindeAnnual2011 5. Growing popularity of renewable energies.46

5

1,45915,655

195,945

9,492

151,995

6,980

115,325

5,399

83,965

3,961

60,790

2,842

39,531

2,261

22,900

1,790

200020

082015

2007

2014

2006

2013

2005

2012

2004 2011

2003

2010

2002

2009

2001

Global demand for solar energy up to 2015 (gigawatts).

→→EU

→→Japan

→→North→America

→→Rest→of→the→world

→→APEC

→→China

APEC = Asia-Pacific EconomicCooperation

Source: EPIA, Global Market Out-look for Photovoltaics until 2015.

The→growing→global→solar→market.Photovoltaic technology is becoming an increasingly competitive and indispensable source of energy across the European Union. On the global stage, solar energy is also gaining in importance. Innova-tions are making production processes more efficient

and advancing this industry. In particular, shrinking manufacturing costs are making this natural power source an increasingly attractive option for investors and national energy providers.

Energy

47

Harnessing→the→potential→of→waste.Not all waste is bad waste. Organic waste, for exam-ple, can be an extremely useful raw material. The warm, damp, anaerobic conditions in compost con-tainers provide the perfect environment for landfill gases. Bacteria convert the waste into methane, CO₂

and other substances. Methane is the most energy-rich of these by-products – one cubic metre has an energy content of almost ten kilowatt hours. New Linde technologies enable methane to be turned into an environmentally friendly biofuel.

Waste


5

Green→cycle.Landfill methane is compressed, purified and cooled at Linde’s facility near San Francisco. It is then lique-fied at a temperature of minus 162 degrees Celsius and transported to local fuelling stations. The bio-gas generated in this way is significantly cleaner and even burns more quietly than diesel. It releases

90 percent less particulate matter and considerably less nitrogen oxides and sulphur dioxide into the atmosphere. And as the fuel is generated and pro-cessed locally, it eliminates the need for long deliv-ery routes.

Management

Waste management cycle.

→→Gas

→→Waste

Source: Waste Management and Linde.

2.→Landfill→delivery

1.→Collection

7.→Refuelling

8.→Usage

3.→Storage6.→Liquefaction

4.→Gas→wells5.→Gas→purification

– 162°C

49

Energy→carrier→of→the→future.Hydrogen is the most abundant chemical element in the universe. It is present in water and forms part of most organic compounds, so is practically unlimited in availability. It is represented by the chemical sym-bol H₂ and delivers more energy than an equivalent

weight of any other fuel. Hydrogen is an environ-mentally friendly option, especially if it is obtained using regenerative energies such as wind or bio-mass. It shows huge potential as a fuel for the trans-port sector.

Hydrogen


5

H₂→infrastructure.Together with Daimler, Linde will be setting up a fur-ther 20 hydrogen refuelling stations in Germany over the next three years, ensuring that the steadily grow-ing number of fuel-cell vehicles can be supplied with H₂ generated solely from renewable resources. The initiative will more than triple the number of public

hydrogen refuelling stations in Germany. The new facilities are planned for the existing hydrogen hubs of Stuttgart, Berlin and Hamburg, as well as along new, end-to-end north-south and east-west corri-dors. These corridors will then make it possible to travel anywhere in Germany with a fuel-cell vehicle.

Mobility

Expanding the H₂ infrastructure.

→ Hydrogen→cluster→with→→ fuelling→stations

→ Cluster→interconnects

Source: Linde.

Leipzig

Hamburg→region

Berlin→region

Munich→region

Nuremberg

Hanover

Karlsruhe

Kassel

Rhine-Ruhr→region

Frankfurt→region

Stuttgart→region→

51

Agreenerfuturestartstoday.Inthefaceofgrowingglobalenergyrequirementsandcontinuedclimatechange,thequesttoobtainenergyfromrenewablesourcesisgainingmomentum.Linde’stechnologyportfoliocoversallthemainsustainablesourcingopportunitiesforpowerandfuel–fromsolarenergythroughbiogasandbiodieseltogreenhydrogen.


5

increasesolarcellandmoduleefficiencyevenfur-ther.Thesharedaimofthesepartnersistomakesolarpowermorecost-effectiveandsolarcellmanufactur-ingmoreeco-friendly.

Theglobalmarketforgasesrequiredinsolarcellproductionisalsosettoexpandfurtherinyearstocome.ExpertsanticipatethatitwillbewortharoundEUR1bnby2015,withforecastsleapingtoEUR3bnby2030.

Hydrogen for GCL-Poly Energy in ChinaLindeopenedtwonewproductionplantsforhigh-purityhydrogeninmid-2011.LocatedinChina,thesewillsupplyGCL-PolyEnergy–oneoftheworld’slead-ingpolysiliconmanufacturersandChina’slargest–withhydrogen for itsproductionprocesses.GroupsubsidiaryGCLSolarhashadamanufacturingoutputofaround21,000tonnesofpolysiliconperyearsincetheendof2010.Ithasalsostartedsettingupsolar

nergygeneratedfromrenewableresources such as wind, water,sunlight, land heat and biogas(seeglossary) is set to play anincreasinglyimportantroleintheglobalenergymixofthefuture.Thecontributionofeachcarriertotheoverallmixwillvaryfromone region to another. Climaticconditionslikesolarintensityandwindstrengtharecrucialhere,as

areotherfactorssuchastheavailabilityofcultivablelandforenergycropsorwaterresourcesforhydro-powerplants.

Technical leaps in the development of solar powerSolarenergyisrapidlygrowinginpopularity,thankslargelytohugeadvancesintheenablingtechnolo-giescoupledwithefficiencygainsinproductionpro-cesses.In1974,themanufacturingcostofsolarcellswasmorethan100USDperWatt;expertestimatesfor2012placethisfigureat50cents.

Thin-filmtechnology(seeglossary)hasplayedasignificantroleinthisdevelopment,enablingmassproductionoflarge-scalesolarmodulesandrequir-ingjust1percentofthesilicon(seeglossary)usedtomanufactureconventional,polycrystallinesolarcells.Somemanufacturersexpectthatimprovedtechnolo-gieswillreduceproductioncostsbyafurther50per-centoverthecomingyears.

Lindeiscollaboratingwithinanetworkthatbringsleadingmanufacturersofsolarcellsandproductionfacilitiestogetherwithnotableresearchinstitutesto

E

>100USDsavings due to more efficient solar cell production.Experts predict that the manufacturing cost of solar cells will be just 50 cents per Watt in 2012 compared with more than USD 100 in 1974. This is all down to technical advances and efficiency gains.

↳ GasesforChina:Linde’sSuzhouplantproduceselectronicgasesforcustomerstouseinsolarmoduleproduction.

↳ (lefttop)Lindehasstrength-eneditscollaborationwithSuntech,China’slargestpoly-siliconmanufacturer.

↳ (leftbottom)Valuablecommod-ity–gascylindersatSuntech.

53

enableSchücotoreduceitsemissionsbymorethan100,000tonnesofCO₂equivalentperyear.

LindeandSchücohavebeenworkingtogethertoadvancegastechnologiesinthesolarindustrysince2008.InMarch2009,LindebegansupplyingSchüco’splantinOsterweddingen(Germany)withfluorinepro-ducedinanon-sitegenerator.

Altogether,Lindehasinstalledoverthirtyon-sitefluorinegeneratorsforcustomersworldwide.

cellproductionfacilities,whichhavenowreachedacapacityofonegigawatt.

ThenewhydrogenplantsatXuzhouIndustrialParkmarkanotherphaseofthesuccessfulongoingcollab-orationbetweenLindeandGCL-PolyEnergy.Priortothat,LindewasalreadysupplyingGCLwithhydrogenviapipeline.ThislatestprojectbringsLinde’sinvest-mentcommitmenttoGCL’sgassupplyinfrastructureinSuzhoutoaroundEUR30m.

Environmentally neutral gases for solar module productionInGermany,too,Lindehascontinuedtobuildbusinessrelationsinthesolarindustryoverthelastyear.InSep-tember2011,theGroupsignedalong-termsupplycon-tractwithSchücoTF,Germany’slargestmanufacturerofsolarmodules,todeliverfluorine(F₂)toSchüco’snewthin-filmmassproductionsiteinGrossröhrsdorf,easternGermany.Aspartofthisagreement,Lindewillconstructthelargestelectronicson-siteF₂productionplantinEuropetodate.

As an environmentally neutral gas, the fluo-rinewillbeusedtocleanprocesschambers,replac-ingthenitrogentrifluoride(NF₃)previouslyused–agreenhousegaswithaglobalwarmingpotentialover17,000 timesgreater than thatof carbondioxide.CommissioningthenewplantandswitchingtoF₂will

PEPPER→research→project.

Since September 2010, Linde has been participating in the inter-national research project PEPPER, alongside leading companies and research institutes from the solar sector. This project aims to increase the efficiency of thin-film silicon modules within the next three years, while simultaneously cutting costs. It also sets out to evaluate and reduce the environ-mental impact of the entire manufacturing process for solar modules. PEPPER has a budget of EUR 16.7 m, over half of which stems from European Commission funding.

Steady growth.Global demand for gases required for solar production (EUR billion).

–100,000tCO₂ thanks to fluorine.Linde customer Schüco, Germany’s largest solar module manu-facturer, is able to reduce emissions at its new plant by more than 100,000 tonnes of CO₂ equivalent every year by using the environmentally neutral gas fluorine.


31

2015 2020 2030

2

0

↳ Crystallinesiliconsolarcell.


5

Turning waste into biofuelInCalifornia, theUSstatewith themoststringentenvironmentallegislation,LindehasformedajointventurewithleadingwastedisposalcompanyWasteManagementInc.Together,theyhavedevelopedasystemtoturnlandfillgasintovaluablefuelforrefusecollectiontrucks.ThegasoriginatesfromcompostingwasteattheAltamontlandfillsitenearLivermoreandisconvertedintoliquidbiogasattheworld’slargestfacilityofitskind.ThiswentonstreaminNovember2009andhassincebeengenerating50,000litresofliquidbiogasperday,usedtofueltherefusetrucks.AspartofthispartnershipwithWasteManagement,Lindeengineeredthegasliquefactionfacilityandpro-videdthestoragetanksandvehiclerefuellingtech-nology.Theventureisprovingagreatsuccess–July2011sawWasteManagementaddthethousandthtrucktoitsbiogasfleet.Convertingthevehiclestothisclimate-friendlyfuelpreventscombustionofaround

↳ Successfulpartnership:LindeprocesseslandfillgasintoliquidbiogasforUScompanyWasteManagementattheAltamontlandfillsitenearLivermore,eastofSanFrancisco.

31millionlitresofpetrolordieselperyear,reducingCO₂emissionsbyapproximately45,000tonnes.WasteManagementnowintendstoexpanditsbiogasstreamfromlandfillgasandisplanningtoconstructasecondliquefactionplantinCalifornia.

–45,000tCO₂ thanks to biogas.By converting its vehicles to climate-friendly biogas, Waste Management saves around 31 million litres of petrol and diesel per year, reducing CO₂ emissions by approximately 45,000 tonnes.

55

containsaround17percentwaterandsalts.Pyrore-formingpropercanthenbegin.Thisinvolvescrackingthedesalinatedglycerinemoleculesunderhighpres-sureandattemperaturesofseveralhundreddegreesCelsius.Likenaturalgas,thepyrolysisgasconsistsprimarilyofmethane.Followingpyrolysis(seeglos-sary),thegasisfedintoasteamreformer,whereitisheatedfurthertogenerateahydrogen-richsynthe-sisgas.Thissynthesisgas,whichstillcontainslargeamountsofcarbonmonoxide,isfedintotheexistingpurificationstageoftheconventionalhydrogenpro-ductionprocessattheLeunasiteandconcentratedtothenecessarypurity.Alternatively,Lindecandirectlyliquefythehydrogenobtainedfromglycerine.

LindecalledinTÜVSÜDtoanalysethecarbonfoot-printoftheentireproductionprocess–fromdeliveryoftheglycerinetoLeunarightthroughtotheelectric-ityconsumedtolightthedemoplant.Theoutcomespeaksforitself:deployedonamajorindustrialscale,thisH₂processchainhasthepotentialtoreduceCO₂emissionsduringproductionbyupto80 percentincomparisonwithH₂capturedfromconventionalnatu-ralgassteamreforming(seeglossary).

Green hydrogen from glycerineIn themediumterm,hydrogenand fuelcells (seeglossary)takeprideofplaceontheagendaforsus-tainable,climate-friendlyfuelsanddrivetraintech-nologies. Leadingautomotivemanufacturershaveannouncedseriesproductionofhydrogen-poweredfuel-cellvehiclesfor2014/2015.Meanwhile,thenec-essaryinfrastructureisadvancingtoo,withhydrogenstationscompletewithsophisticatedfuellingtechnol-ogyspringingupatkeytransporthubs(seepage51).

Atpresent,thelion’sshareofthehydrogenusedinthemobilitysectorstillhastobegeneratedfromfossil fuels such as natural gas. But the future isalreadyunfolding.AttheLeunaindustrialparkinGer-many,Lindeopenedapilotplantinautumn2011toconvertrawglycerineintohydrogen.Inregularmode,theplanthasanoutputof50normalcubicmetresofsustainablehydrogenperhour.

Rawglycerineoccursasaby-productofbiodie-selmanufacture fromplantoilssuchas rapeseed,forinstance.Itcontainsahighlevelofhydrogenanddoesnotconflictwithfoodproduction.Itisalsoeasytotransport,non-toxicandavailableallyearround.

For the first time, Linde’s landmark facility inLeunaprovidesproofofconceptforthecost-effective,energy-efficientconversionofglycerineintohydro-gen.Theplantusesthepyroreformingprocessdevel-oped by Linde. Production begins with an initialdistillationsteptopurify therawglycerine,which

↳ Oncethewastehasbeencollected,itiscompostedandturnedintobiogasbyLinde.WasteManagementusestheenvi-ronmentallyfriendlyfueltopoweritsgarbagecollectiontrucks.

Energy→from→landfill.

In the absence of oxygen, the warm, damp conditions in com-post containers provide an ideal environment for bacteria to break down organic matter and release landfill gases such as methane and carbon dioxide. The energy released by this decomposition process primarily takes the form of combustible methane. A cubic metre of pure methane has an energy content of almost ten kilo-watt hours. To put this energy to good use, the landfill gas is first collected in gas wells. The entire depository is equipped with verti-cal collection pipes for this pur-pose, in which blowers create a slight negative pressure that sucks in the gas. At the Livermore plant in California, around 200 cubic metres of landfill gas are obtained per tonne of waste in this way. The next step is to com-press the gas at the liquefaction facility, removing sulphur, carbon dioxide, nitrogen, alcohols and other impurities. Finally, the puri-fied methane is cooled to minus 162 degrees Celsius in a heat exchanger and thus liquefied. The electricity required for this process is also obtained from landfill gas.

In contrast with fossil-based natural gas, gas from the waste disposal site is climate-neutral when used to power engines, only releasing as much carbon dioxide as the organic matter previously absorbed. Biogas engines also emit 90 percent less particulate matter, nitrogen oxides and sul-phur dioxide than conventional drivetrains.


5

meansofenergystorageisalsosettogrow.Itisanidealmediumtostoresurpluselectricityfromwindturbines,forinstance(seepage67).

En route to a hydrogen-based societyUndertheumbrellaoftheCleanEnergyPartnership(CEP;seeglossary),climate-friendlyhydrogenfromLeunaisalreadyusedtopowerfuel-cellvehicles,forinstance inBerlin. Shellopened its firsthydrogenrefuellingstationhereinsummer2011.EngineeredbyLinde,thisfacilitycanrefuelaround250vehiclesperday.

Thepotentialofhydrogenextendsbeyondeco-friendlytransport.Majorcustomerssuchascrudeoilrefineriesandchemicalcompanies,whoseproductionprocessesrequirelargeamountsofhydrogen,couldalsocontributetoacleanerenvironmentbyincreas-ingtheirshareofsustainablygeneratedhydrogeninthefuture.

Inasocietyincreasinglycommittedtoenergyfromrenewablesources,theimportanceofhydrogenasa

↳ PilotplantinLeuna:Lindeusesaninnovativeproceduretoconvertrawglycerineintohydrogen.

–80%CO₂ emissions thanks to sustainably produced hydrogen.Linde’s pilot plant at the Leuna chemical hub has been con-verting glycerine to hydrogen since autumn 2011. Biogenic raw materials hold the key to sustainable, economically via-ble hydrogen production.

57

6

Linde Annual 2011 6.→Transitioning→to→a→hydrogen→society.58

→ Chapter 6

Transitioningtoahydrogensociety.Versatile, low-emission choices.

59

↳ Fuel-cell vehicles are already part of the public transport infrastructure in California. Linde has built two H₂ fuel-ling stations for bus operator AC Transit in Oakland and Emeryville.

Linde Annual 2011 6.→Transitioning→to→a→hydrogen→society.60

6

Alwaysmobile,increasinglyecological.The future of mobility is green – and hydrogen has a key role to play here. In conjunction with fuel cells, it has the potential to make both private and public transport more environmentally sound.

61

↳↳ Hydrogen↳station↳in↳Berlin:↳Drivers↳can↳also↳fill↳up↳on↳green↳fuel↳in↳Munich,↳Hamburg↳and↳Stuttgart.

Linde↳Annual↳2011 6. Transitioning to a hydrogen society.62

6

Adensernetworkforincreasedflexibility.Germany continues to expand its network of hydrogen fuelling stations. Together with Daimler, Linde will be setting up twenty new H₂ fuelling stations in Germany over the coming months. This initiative underscores the companies’ commitment to zero-emissions mobility.

63

Thefoundationhasbeenlaidforthefirst series-produced electric carspoweredbyhydrogen(H₂)fuelcells.Extensiveroadtestswithdifferentvehicles, innovative fuelling tech-nologiesandavarietyofhydrogenproduction processes have estab-lishedtheeverydayviabilityofthis

environmentallysoundenergycarrierforzero-emis-sionsmobility.Atthesametime,industrycontinuestoexpandthereachoftheexistingH₂refuellinginfra-structure.

Increasing H₂ mobilityLinde is involved inmany initiativesworldwide todrivewidespreadadoptionofhydrogentechnologies.Germanyisleadingthewayhere.Linde,forexample,isafoundingmemberoftheCleanEnergyPartnership(CEP)andH₂Mobility,twoindustrialinitiativesspon-soredbytheGermanNationalInnovationProgrammeforHydrogenandFuelCellTechnology(NIP).Bothorganisationsarecommittedtopromotingthecom-mercialisationofhydrogenasafuelandtobuildingthefirstnationwidehydrogeninfrastructureinGermany.Partnercompaniesrepresenttheenergy,transportandautomotivesectors;allarecommittedtosupport-ingtheautomotiveindustryinitsgoaltolaunchthefirstseries-producedhydrogen-poweredfuel-cellcarsin2014/2015.CEPactivitiesin2011culminatedintheopeningofnewH₂refuellingstationsequippedwithLindetechnologyinBerlinandHamburg.

IntheUK,Lindeplayedakeyroleinthecountry’sfirstpublicH₂fillingstation,whichopenedinSeptem-ber2011.ThecompanyconstructedandnowrunsthefacilityatcarmanufacturerHonda’sproductionsiteinSwindon.

Hydrogen technology is becoming a particularlyimportant factor in climate protection thanks toground-breakingdevelopmentsinsustainableH₂pro-duction.Fromglycerineandblue-greenalgaethroughbiologicalwasteproductstoelectrolysispoweredbyregenerativeelectricity,Lindeistestingandutilisingawiderangeofmethodstoreduceoreveneliminateemissionsduringhydrogenproduction.

Cleanmobility,poweredbyhydrogen.Hydrogenhasthepotentialtoplayakeyroleintomorrow’senergymix.Thelightestelementintheuniverse,hydrogencanbeusedasafuelforzero-emissionsmobilityandasastoragemediumforelectricityfromrenewablesources.Lindehasthetechno-logicalexpertisetomastertheentirehydrogenvaluechainandisactiveonnumerousfrontstodrivewidespreadadoptionofthisenvironmentallyfriendlyenergycarrier.


Sustainable growth.Global demand for hydrogen fuel (EUR billion).

10 – 15

2015 2020 2030

1

10

0

Cryogenic→hydrogen→from→Leuna.

Compressing or cryogenically liquefying hydrogen reduces its volume for efficient storage. At its chemical hub in Leuna, Linde operates Germany’s only industrial-scale hydrogen lique-faction facility. The plant has an hourly production capacity of around 33,000 litres of cryogenic liquid hydrogen (LH₂). This is much denser than gaseous hydrogen and therefore significantly easier to store, transport and manage.

LindeAnnual2011 6. Transitioning to a hydrogen society.64

6

20 new H₂ fuelling stations in GermanyIn June2011,LindeandcarmanufacturerDaimleragreedtobuild20newH₂fuellingstationsinGer-manyoverthenextthreeyears.Thisinvestmentinthedouble-digitmillioneurorangewillformabridgebetweentheexistingH₂MobilityandCleanEnergyPartnershipinfrastructureprojects.ItwillalsomorethantriplethenumberofpublichydrogenrefuellingstationsinGermany.ThenewstationswillbebuiltinthehydrogenhubsofStuttgart,BerlinandHamburgandalongnewend-to-endnorth-southandeast-westcorridors.Theaimistomakeuseofexisting,easilyaccessiblelocationsbelongingtovariouspetroleum

companies.ThesecorridorswillthenmakeitpossibletotravelanywhereinGermanywithafuel-cellvehi-cle.The20newH₂stationswillbesuppliedwithsus-tainablehydrogenfromLinde’sLeunaplant.

Around the world with hydrogen LindeandDaimler tookpart inanunusualprojectlastyeartoprovethathydrogenisalreadyuptotherigoursof lifeon the road. In January2011, threeB-classF-CELLhydrogen-poweredfuel-cellcarssetofftotourtheglobein125days.Thetripcoveredadistanceof30,000kilometres,takingthecarsthrough14countriesandnumerousclimatesonasphaltroadsanddirttracks.ThisuniquejourneyprovedtheperfectplatformforDaimlertodemonstratethecars’techni-calmaturity.

Duringthisworldtour,thevehiclesweresuppliedwithhydrogenfromanew700-barmobilerefuel-lingunitdevelopedbyLindeandDaimler.Thismobilestation isequippedwithan ioniccompressor (seeglossary)andallthetechnologyrequiredforcom-pressinghydrogenandrefuellingthecars.TheLinde-developed ioniccompressor is ideal forH₂ refuel-ling,asitusesionicliquidinsteadofaconventionalsolidcompressionpiston.Duringcompression,theseorganicsaltsactlikeasolidmedium.

+20new H₂ fuelling stations will soon make it possible to travel anywhere in Germany with a fuel-cell car. Linde and Daimler are investing in the double-digit million euro range to build twenty new H₂ stations in Germany.

↳ HydrogenfuellingstationinBerlin’sSachsendamm:Lindesuppliesthestationwithgreenhydrogen.

Proven→H₂→production→processes

Steam reforming natural gas is currently the most economically viable method of producing hydro gen. Catalytically splitting steam and natural gas in a steam reformer at temperatures of around 800 degrees Celsius pro-duces hydrogen, carbon monoxide and carbon dioxide. In a subse-quent step known as the CO shift reaction, the carbon monoxide reacts with steam, creating CO₂ and more hydrogen. Over 75 per-cent of the direct hydrogen market is produced in this way.

Linde’s long-term goal is to significantly increase the share of hydrogen produced using renewable energies such as wind, water and biomass. Electrolysis, for example, can be used to pro-duce a zero-emission hydrogen energy cycle, provided the energy it uses comes from regenerative sources. During electrolysis, water is split into its constituent parts – namely oxygen and hydrogen. A membrane between the anode and cathode prevents the two gases from mixing and reverting back to water. If this process is carried out under pressure, it also makes subsequent compres-sion easier and reduces energy and space requirements. Linde has a wealth of experience working with hydrogen electrolysers – as well as the expertise to incorpo-rate them into existing hydro gen technology chains.

65

ThemarketforH₂fuelissettogrowfurther.Marketexpertspredict thataroundonemillionhydrogenvehicleswillbeonEurope’sroadsbytheyear2020.Studies show thatby2050,over aquarter of theworld’spassengercarscouldbepoweredbyhydro-gen-sourcedelectricity.IndustryexpertsalsopredictthattheglobalmarketwillbeworthEUR10to15bnby2030.

Using H₂ to remove sulphur from fuelsMovingbeyondthepossibilitiesofhydrogenintomor-row’senergymix,thelightestelementintheuniversehasbeenakeyenablerofnumerousindustrialpro-cessesformanyyearsnow–afactthatisoftenover-looked.Almosthalfofthehydrogenproducedworld-wideisusedinthechemicalindustryforammoniaandmethanolsynthesis.Hydrogenisalsousedincrudeoil

refineriestoremovesulphurfromconventionalfuels.Largeamountsofhydrogenarealsorequiredinthemetal,glass,electronicsandfoodindustries.

Globaldemand isestimatedatover600billioncubicmetresperyear.Toproducethismassivevol-umeofhydrogen,fossilfuelssuchasnaturalgasare

California’s green busesHydrogen-powered fuel cells are not onlymakinginroadsintoprivatetransport,theyarealsograduallymakingtheirmarkinpublicservices.AndnotonlyinGermany.Lindehasbuilttwohydrogenfuellingsta-tionsforbusoperatorACTransitintheCaliforniancit-iesofEmeryvilleandOakland.Californiaisapioneer-ingregionforhydrogenmobilityandthestationsnowsupplyhydrogentoadozenfuel-cellbuses.SomeofthehydrogenisproducedwithoutanyCO₂emissions,usingregenerativeenergysources.Theroofsofthefuellingstationsarefittedwithsolarpanelsthatsupplymorethan700kWofpowertoanelectrolyser,whichproduces60kilogramsofH₂everyday.Thissufficesfortwoofthebuses.Theremainingtenarefuelledfromatankthatcanholdupto34,000litresofliquefiedhydrogen.Thishydrogenisgeneratedfrommethane,whichcutsthebuses’CO₂footprintby40percentcom-paredwithdieselorpetrol-poweredvehicles.

↳ Rightaroundtheglobe:TheMercedes-BenzF-CELLWorldDrivetookthreefuel-cellcarsonajourneyofaround30,000kilometreseach.Thetourclearlydemonstratedthathydrogenandfuel-celltechnologyismorethanamatchfortheday-to-dayrigoursoftheopenroad.

–40%CO₂ emissions in public transport services.Buses powered by methane-derived hydrogen almost halve the carbon dioxide emissions of diesel or petrol-driven vehicles.

Hydrogen→pit→stops→→on→the→world→tour.

1. Stuttgart2. Paris3. Barcelona4. Madrid5. Lisbon6. Miami7. New Orleans8. San Antonio9. Phoenix10. Los Angeles11. Sacramento12. Salem13. Seattle14. Vancouver15. Sydney16. Melbourne17. Adelaide18. Perth19. Shanghai20. Beijing21. Xi’an22. Almaty23. Astana24. Moscow25. St. Petersburg26. Helsinki27. Stockholm28. Oslo

14.

13.12.

7. 3.

1.27.

28. 26. 25.

24.23.

22.20.

21.

19.

18.17.

→

15.16.

9.

11.10.

8.6.

4.5.

2.

→

→

→

LindeAnnual2011 6. Transitioning to a hydrogen society.66

6

sunonlyshinesduringtheday,andinmoretemperateclimatesitisonlystrongenoughinsummermonths.

On-demandaccesstoenergyfromregenerativesourcessuchasthesethushingesoneffectivestor-agesolutions.Hydrogenhasakeyroletoplayhere,asenergyfromwindandsolarplantscanbeusedtopowerelectrolysisofwater.Theresultinghydro-gencanthenbecompressedorliquefiedandstoredforaslongasnecessary.Whentheenergyisneeded,thehydrogencanbeburnttocreatezero-emissionselectricityorheat,orconverteddirectlyintoelectric-itywiththehelpoffuelcells.Thefirsthybridpowerplantscapableofharnessingwindpowerandhydro-gentocreateandstoreenergyarecurrentlybeingtested.

Thehydrogenagehasalreadydawned.

steam-reformed inhydrogenplants. Thisaccountsforaround70percentofthecurrentvolume.Havingalreadybuiltover200hydrogenproductionplantsworldwide,Lindeholdsaleadingpositioninthismar-ketandcontinuestobenefitfrombuoyantdemand.

Oneofthecompany’slatestdevelopmentsistheHYDROPRIME® line of plants. These standardised,compactfacilitiesareaimedatcustomerswhorequiresmalltomediumamountsofhydrogen.HYDROPRIME®plants are shipped to customers by truck, almostentirelypre-assembled.Theyareextremelyreliableandbothcost-effectiveandenergy-efficienttooper-ate.Theseremote-controlled,fullyautomaticunitscanbeadaptedtoindividualcustomerneeds.

Using hydrogen to store energyHydrogenisanenvironmentallysoundenergycar-rier.Itisalsoanidealmediumforstoringenergyfromregenerativesourcessuchaswindandsolarpower,which,bytheirverynature,aresubjecttofluctua-tions. Thewinddoesn’t alwaysblowandwhen itdoes,itisneverataconsistentspeed.Similarly,the

↳ Thefuturehasalreadybegun:BusoperatorACTransitcarriesmorethan200,000passengersacrosstheSanFranciscoBayAreaeverydayinitsenvironmentallyfriendlyhydrogen-poweredbuses.

Fuel→cell→vs.→battery

Fuel cells and batteries are two promising and mutually comple-mentary electric drivetrain technologies. With comparatively long charging times and shorter ranges, battery-powered cars are particularly suited to shorter distances in urban areas. In con-trast, hydrogen-powered fuel-cell vehicles can be refuelled within three minutes using Linde’s ionic compressor and can cover dis-tances of over 500 kilometres on a single tank.

67

Contact information

Linde AGKlosterhofstrasse 180331 MunichGermanyPhone +49.89.35757-01Fax +49.89.35757-1075www.linde.com

CommunicationsPhone +49.89.35757-1321Fax +49.89.35757-1398E-mail [email protected]

Investor RelationsPhone +49.89.35757-1321Fax +49.89.35757-1398E-mail [email protected]

Our Annual Report, which includes The Linde Annual and the Financial Report of The Linde Group, is available in Eng lish and German. You can download either version from our website at www.linde.com. You will also find an interactive version of the Annual Report online.

If you require any additional information about The Linde Group, please contact our Investor Relations department. Our staff would be delighted to send you anything you need free of charge.

Imprint

Published byLinde AGKlosterhofstrasse 180331 MunichGermany

Design, production, typesetting and lithographyPeter Schmidt Group, Hamburg

TextLinde AG

PhotographyRüdiger Nehmzow, pages 10 – 21, 29 – 31, 33 – 35, 37,41 – 45, 52 – 65 and 67Hugh Beauchamp, pages 06 – 07 IEA (International Energy Agency), page 05 Dr. Marli Miller, pages 10 – 11 Linde AG, pages 22 – 23, 26 – 28, 38, 40 and 66Sinclair Stammers, page 36 Ian McKinnell, page 46Steve Taylor, page 48 Peter Schmidt Group, cover, casing as well aspages 02 – 03, 05 – 07, 09, 24 – 25 and 48

Printed byMediahaus Biering GmbH, MunichPrinted on Circlesilk Premium White paper (100 percent recycled paper, European Ecolabel certified in the Copying and Graphic Paper category No. FR/11/003)

compensated

Linde Annual 2011 Imprint | Contact information68

Backcoverfold-out:C5/C7:Reviewoftheyear,C6:Glossary

Reviewoftheyear

C7

JANuArY

↳LindebecomesthepreferredengineeringpartneroftheSouthAfricancompanySasolTechnology(Pty)Ltd.Theagreementisforaninitialtermof10yearsandrelatestoamajorportionofSasol’scoalgasificationtechnology:downstreamaspectssuchasrawgascooling,by-productprocessingandoverallintegrationofthegasisland.

↳LindeisselectedasDaimler’sexclusivehydrogenpartnerfortheMercedes-BenzF-CELLWorldDrive.ThisendurancetripsendsthreeB-classF-CELLhydrogen-poweredfuel-cellcarsrightaroundtheworld.Lindeisthesolesupplierofmobilehydrogenforthezero-emissionsvehiclesfortheentiretour.Thetriptakeseachofthecarsaround30,000kilometresacrossfourcontinentsand14 countriesin125days.

FEBruArY

↳InTasmania,LindeofficiallybringsonstreamAustralia’sfirstmicro-LNGplant.Theproject,whichisassociatedwithalong-termsupplycontractforLNGRefuellersPtyLtd,includesthesup-plyofsixfillingstationsforthetransportcompanyintheTasma-nianregion.

↳AtitsCebusiteinthePhilippines,LindeinvestsEUR3.8mintheconstructionofaplanttoproducecarbondioxide.Thenewplant,whichproduces24 tonnesof carbondioxideperday,suppliestheshipbuilderTsuneishiHeavyIndustries.

MArCH

↳InPasirGudanginMalaysia,Lindeofficiallyopensanewairseparationplant.TheEUR47mprojectisLinde’sbiggestsingleinvestmentinMalaysiaanddemonstratesthatheretootheGroupisgearingitsbusinesstowardslong-termgrowth.Theplanthadstartedproductioninthesecondhalfof2010.

↳ Linde introduces its new segment structure in theGasesDivision.TheGroupalsosetsoutreallocatedregionalresponsi-bilities.Linde’sGasesDivisionnowreportsonthebasisofthefollowingthreereportablesegments:EMEA(Europe,MiddleEast,Africa),Asia/PacificandtheAmericas.LindealsoestablishesaspecificregionalresponsibilityontheExecutiveBoardfortheAsia/PacificsegmenttocapitaliseonthehugepotentialofferedbygrowthmarketsinAsia.

AprIL

↳Lindeannouncesthatitisfurtheradvancingtheuseofhydro-gen as an environmentally sound fuel inNorth America. AtCoca-Cola’sproductionsiteatCoca-ColaBottlingCo.ConsolidatedinCharlotte,NorthCarolina,Lindewillsetupazero-emissionshydrogenfuellingsystemtosupply40forklifttrucks.

MAY

↳LindeistobuildandoperatealargehydrogenandsynthesisgasplantinChongqingChemicalParkinwesternChina.Lindeimplements theproject ina jointenterprisewithChongqingChemical&PharmaceuticalHoldingCompany(CCPHC).Thenewon-siteplantwillinfuturesupplycarbonmonoxide,hydrogenandsynthesisgastotheBASFandCCPHCproductionplantsbasedthere.TheinvestmentintheprojectisaroundEUR200m.Thenewplant,whichisbeingsuppliedbyLinde’sEngineeringDivi-sion,isexpectedtocomeonstreaminthethirdquarterof2014.ThisprojectstrengthensLinde’spresenceinwesternChinaandreinforcesitspositionastheleadinggasesandengineeringcom-panyinChina.

↳InSweden,Lindeofficiallyopensthecountry’sfirstterminalforliquefiednaturalgas(LNG).LindeistheownerandoperatoroftheterminalandsellstheLNGtocustomersinindustry,transportandshipping.Withthisnewterminal,Lindehasgainedentryintoapromisinggrowthmarket.

JuNE

↳Lindeannouncesthatitisworkingtogetherwithcarmanu-facturerDaimler topressaheadwith thedevelopmentofaninfrastructureforfuel-cellvehicles.Overthenextthreeyears,thetwocompaniesplantobuildanadditional20hydrogenfill-ingstationsinGermany,therebyensuringasupplyofhydrogenproducedexclusivelyfromrenewablesourcesforthesteadilyincreasingnumberoffuel-cellvehiclesontheroads.Asaresultof theLinde/Daimler initiative,which involves investment ineurorunningintothedouble-digitmillions,thenumberofpublichydrogenfillingstationsinGermanyissettomorethantriple.

Reviewoftheyear

JuLY

↳Lindepavesthewayforentryintothepromisingmarketseg-mentoffloatingLNGplants.TogetherwithitsprojectpartnerSBMOffshore,Netherlands,theGroupsignsacooperationagreementwiththeThaioilgroupPTT(PetroleumAuthorityofThailand)todevelopafloatingnaturalgasliquefactionplantintheTimorSeaoffthenortherncoastofAustralia.TheprojectwillinvolvetheconversionofnaturalgasfromthreegasfieldsintoLNG.Ifthegasreservesmeetexpectations,theprojectwillmoveintothefront-endengineeringanddesignphases.Thefinalinvestmentdecisionshouldbemadeattheendof2012.Commercialproduc-tionwouldbeexpectedtocommenceattheendof2016.

↳ Linde enters into an agreementwith the Chinese YantaiWanhuaGrouptobuildtwoairseparationplants.Theplantswillhaveatotalproductioncapacityof110,000normalcubicmetresofoxygenandnitrogenperhour,andwillalsosupplythird-partycustomers.Theyareexpectedtocomeonstreamatthebegin-ningof2014.

AuGuST

↳Lindeisinvolvedinthemajorpipelineproject,NordStream,whichhasassuredthesupplyofnaturalgasfromRussiato26 mil-lionEuropeanhouseholdssincetheendof2011.Forawholeweek,withoutinterruption,Lindesupplied14,000normalcubicmetresofnitrogenperhour,injectingitintothepipeline.Thiswasfortheinertisationofthepipeline:i.e.rinsingthepipeswithnitrogentoremovereactivegases.

↳WiththesupportoftheUSDepartmentofEnergy(DoE),Lindeiscontinuingtodevelopcarboncaptureandstorage(CCS)tech-nologyincoal-firedpowerstationsintheUnitedStates.TheDoEdecidedtoprovideUSD15moffundingtobuildapilotplantinWilsonville,Alabama,totestinnovativeCO₂scrubbingprocessesasof2014.TheseprocessesaimtoseparatetheCO₂inthemostenergy-efficientandcost-effectiveway.Intheplant,Lindewillseektoremoveatleast90percentofthecarbondioxidefromthepowerstationfluegases.Energycostswillrisebyonly30 percentasaresult.

SEpTEMBEr

↳Workingtogetherwithanumberofpartners,LindelaunchesthefirstpublichydrogenfillingstationintheUK.Both350barand700bartechnologycanbeusedatthefillingstation,whichissituatedinSwindonontheM4motorwaybetweenLondonandSwansea.

↳LindesignsacontracttobuildEurope’slargeston-sitefluo-rineproductionplantforSchücoTF,Germany’sleadingmanufac-turerofthin-filmsiliconsolarmodules.Byusingenvironmentallyfriendlyfluorine,Schücoisabletoreduceemissionsfromitspro-ductionplantsby103,000tonnesofCO₂equivalentperannum.

OCTOBEr

↳InSouthKorea,Lindestartsproductionatthenewairsepara-tionplantontheGiheungsite.Theplantproduces3,000tonnesofnitrogenperdayforcustomersintheelectronicsandsemi-conductorindustries.AtEUR130m,thisairseparationplantisLinde’sbiggestinvestmenttodateinSouthKorea.

↳Lindelaunchesanewmodelrangeinthegrowingmarketseg-mentofsmallhydrogenplants.WithitsHYDROPRIME®product,Lindeisexpandingitsportfoliotoincludeastandardisedrange,sothatitcanofferthemarketthewholespectrumofsizesforhydrogenandsynthesisgasplants.

NOvEMBEr

↳LindebuildsupitsbusinessrelationshipswiththeChinesesteelindustryandcommitstoprovidingallthegassuppliesforHebeiPuyangIronandSteelinWu’aninnorthernChina.Underthison-siteagreement,Lindewillacquireandoperatethesevenexistingairseparationplantsandanexistingpipelinenetwork,equippingthemwiththelatesttechnology.Atthesametime,Linde’sEngineeringDivisionwillconstructanewairseparationplantonthesite,whichwillhaveaproductioncapacityof30,000normalcubicmetresofoxygenperhour.TheinvestmentintheprojectisaroundEUR120m.

DECEMBEr

↳LindeinvestsEUR42mintheJilinChemicalParkinnorth-eastChinatobuildanewhydrogenplant.Thenewplantisexpectedtocomeonstreamattheendof2013andwillsupplyhigh-purityhydrogentoseveralcompaniesatthisintegratedchemicalcom-plex.Productionplantssituatedhere includethoseofEvonikIndustriesandJishen,ajointventurebetweenPetroChinaJilinBeifangChemicalGroupandJilinShenhuaGroup.

C5

Glossary

→ Silicon Siliconisahard,brittlenon-metalwithadarkgreysheenandadiamond-likelatticestruc-ture.Crystallineandamorphoussiliconcanbedifferentiatedbythesizeofthecrystals.Siliconisatypicalsemiconductorelement.Itsabilitytoconductelectricityincreaseswithtemperature.Addingmetalatoms(impurities)alsoincreasessilicon’sconductivity.

→ Steam reformingAprocessformanufacturingsynthesisgas –amixtureofcarbonmonoxideandhydrogen –fromcarbon-containingfeedstockssuchasnaturalgas,benzene,methanol,biogasorbiomass.

→ Stranded gasThisreferstoanaturalgasreservethathasbeendiscoveredbut remainsunusable forphysical or economic reasons. Strandedreservesaregenerallyeithertoosmallortooremotetojustifytheconsiderableexpenseinvolvedinbuildingapipelineinfrastructure.

→ Synthesis gas (syngas)A mixture of carbon monoxide (CO) andhydrogen(H₂),syngasservesasaninterme-diatefortheproductionofsyntheticfuelsandotherproductssuchashydrogen,ammoniaandmethanol.Itcanbasicallybemadefromagaseous,liquidorsolidfeedstock.

→ Thin-film technologyTomanufacture solar modules, extremelythin(0.001millimetres)layersofphotoactivesemiconductors are applied to a substratematerial.Thesethinfilmssignificantlyreducemanufacturing costs by cutting the bill ofmaterialsforsilicon–anotherwiseexpensivecommodity.

→ Biogas Biogasisgeneratedwhenplantmatterdecaysinbiogasfacilities.Itsmaincomponentsaremethaneandcarbondioxide.Methane–alsotheprimarycomponentofnaturalgas – isrecoveredtoproduceenergy.

→ Carbon Capture and Storage (CCS) This process involves separating CO₂ fromcombustionfluegasesandstoringit,espe-ciallyinundergroundsites.TheaimhereistoreducethelevelsofCO₂emittedintotheatmosphere.

→ Clean Energy partnership (CEp) CEPisEurope’slargestproof-of-conceptproj-ectdemonstratingtheviabilityofhydrogenforeverydaymobility.ItisaflagshipprojectforroadtransportwithintheGermanNationalInnovationProgrammeforHydrogenandFuelCellTechnology(NIP).TheGermanMinistryofTransporthasbeensponsoringCEPsince2008. The partnership brings technology,oilandenergycompaniestogetherwithcarmanufacturersandtwopublictransportser-viceproviders.LindeisoneofthefoundingmembersofCEP.

→ Fischer-Tropsch synthesis Aprocessusedtoproducesyntheticfuels.TherawmaterialusedforFischer-Tropschsynthe-sis(FTS)issynthesisgas,amixtureofcarbonmonoxideandhydrogen.Thesynthesisgascanbeproducedfromcoalornaturalgas(andalsofromoilfractionssuchasheavyoil).Itiscompletelysulphur-free,althoughpurificationissometimesrequiredtoachievethis.Conse-quently,thefuelsproducedbyFTSarealsocompletelyfreefromimpurities.

→ Fuel cell Asysteminwhichhydrogenandoxygenreacttoformwaterwithoutaflame(coldcombus-tion),generatingasignificantamountofelec-tricalenergy.Sofuelcellstransformchemicalenergyintoelectricalpower.

→ Gas-to-liquids (GTL) plant GTLinvolvesconvertingnaturalgastosynthe-sisgasbyaddingoxygenandsteamandfur-thertransformingthistohydrocarbonsusing→Fischer-Tropschsynthesis.

→ Integrated gasification combined cycle (IGCC)

IGCC isacombinedcyclepowerplantwithupstreamfuelgasification.Theprimaryfuel,suchascoalorbiomass,isconvertedtoanenergy-rich combustion gas in a gasifier,achievingthermalefficiencylevelsof80per-cent.

→ Ionic compressorIoniccompressorsrepresentahugeleapinthe evolution of compression technology.Hereconventionalmetalpistonsarereplacedbyaspeciallydesigned,nearlyincompress-ibleionicliquid.Theseorganicsaltsremainliquidwithinaspecifiedtemperaturerange.Theinnovativedesignenablescompressionat a near-isothermal temperature. Whichmeansthatdriverscanrefuelmuchfaster.AbuscanberefuelledinjustsixminutesusingLinde’sMF-50 ionic refuelling system, forexample.And theMF-90 refuellingsystemforcarstakesonlythreeminutestofillthetank–providingenoughfueltolast400–600kilometres.

→ LNG Liquefiednaturalgas (LNG) is regardedasa promising fuel for future energy needsbecauseofitshighenergydensity,constantheatratingandhighpurity.

→ Mixed Fluid Cascade (MFC®) liquefaction process

Threecustom-mixedrefrigerantcyclesprovidethecoolingandliquefactiondutywiththisprocess.Speciallydevelopedfor industrial-scale natural gas plants,MFC®maximisesenergyefficiency.

→ pyrolysis Pyrolysis uses heat to crack organic com-pounds. The high temperatures involved(500–900°C)forcethebondsinlargemol-eculestobreakdown.

→ rectification columnThis iswhererectification–alsoknownascounter-flowdistillation – takesplace inanaturalgasplant.Thisisamulti-stepprocessthatseparatesamixtureintoitscomponentfractions.

C6

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Linde AGKlosterhofstrasse180331MunichGermanyPhone +49.89.35757-01Fax +49.89.35757-1075www.linde.com

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Linde Annual 2011

Economy & Finance