20. November 2020 | 11:10 CET
Air Liquide, Linde, Royal Helium: Air Anchor
According to PWC, sustainability is a crucial issue for the oil and gas industry. Until now, the core of existing sustainability strategies has primarily involved compliance with regulatory requirements in the areas of health, employee well-being and safety. For some years now, renewable energies have been on the upswing, and decarbonization is the order of the day, posing new challenges for the sustainability strategies of oil and gas companies. Current climate policy, pressure from shareholders and the public, and the investment strategies of major financial institutions are forcing companies to invest in the use of "green" energy sources and reduce their emissions. Through improved technologies and processes, ecologically generated electricity is becoming increasingly competitive.
On the one hand, it can be seen as threatening, but also an opportunity for business models in the oil and gas industry. Their well-known representatives will continue to play an essential role in the global energy mix for the foreseeable future. For all companies in the industry, this situation represents a balancing act. They must develop transparent sustainability strategies to safeguard their traditional business areas. Still, at the same time, they must also take advantage of new opportunities and seize those arising from the transition to a climate-neutral economy.
time to read: 4 minutes by André Will-Laudien
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
Air Liquide - Footprint in the air
Air Liquide launched a project in 2017 to optimize the bulk supply chain from start to finish and launched five major pilot projects in Canada, the US, France, Germany and China. They were supported by Air Liquide's R&D, digital and IT teams who worked together to develop and industrialize customized digital solutions.
By digitally connecting assets throughout the supply chain, from manufacturing plants and trucks to tanks at customer sites, Air Liquide claims to collect and analyze data to help its customers consistently deliver a better customer experience and greater efficiency.
Matthieu Giard, VP and member of the Executive Committee of the Air Liquide Group which oversees the Industrial Merchant business, told gasworld.com: "Industrial Merchant is both Air Liquide's historical core business and a business that is rapidly changing through the use of data and digital technology. The launch of our IBO supply chain digitalization program for liquefied gases on a global scale is a new and significant step in Air Liquide's customer-centric transformation. Customers will now benefit from a service that ensures greater safety and reliability, as part of an approach that also helps to reduce the overall carbon footprint." Anyone looking to make sustainable investments in industrial gases will find Air Liquide as a standard in the CAC-40 with a market value of EUR 66.4 billion. The share is in line with the indices at 12.2% in 2020.
Linde - Honor to whom honor is due
With the 18th annual confirmation, Linde has again been recognized as a global leader in sustainability in the Dow Jones SustainabilityTM World Index (DJSI World) and the DJSI North America. Linde is the only Company in the chemical industry that has remained in the DJSI World for eighteen consecutive years. The DJSI World is a reliable benchmark for investors who incorporate ESG factors into their decision-making. It identifies the top 10 percent of companies in each sector among the top 2,500 companies in the S&P Global Broad Market Index. The companies are selected based on a detailed analysis of long-term economic, environmental and social criteria. Linde received a perfect score in the sector for several criteria, including risk governance, codes of conduct, climate strategy, water-related risks, employee development programs and philanthropic activities.
Linde helps its customers to improve their environmental performance and reduce their ecological footprint. In addition to the DJSI World and DJSI North America, the Company is also a member of the FTSE4Good Index Series. In June 2020, Linde was awarded an A in the MSCI's ESG ratings, is included in the 100 Best Corporate Citizens 2020 and received a silver class award in the Sustainability Yearbook 2020, which is published by S&P Global in cooperation with RobecoSAM. This is a great honor for a Company, and it was essential for us to emphasize this sufficiently in this context. Equity investments can, therefore, also be genuinely sustainable.
Linde's market capitalization is already a remarkable EUR 111 billion, making it number 2 in the DAX and providing investors with an annual return of 11.9% in 2020. These numbers may not yet reflect all the respectable successes.
Royal Helium - Not only in balloons
Let's turn to a third gas producer in our analysis. The Canadian, Royal Helium, is a pure helium explorer with the focus on research and development of primary helium production in southern Saskatchewan. Helium is one of the most challenging substances to transport because it remains gaseous up to very low temperatures and only becomes liquid near absolute zero. It is the only substance that does not become solid even at absolute zero (0 K or -273.15 °C) under normal pressure.
Besides neon, helium is the only element for which no compounds have been detected so far, even under extreme conditions, that did not decompose immediately after formation. Helium occurs in nature, only atomically. The most common stable isotope is 4He, another isotope is 3He which is extremely rare on earth. Helium can only be used and processed under industrial pressure.
Royal's projects have been methodically investigated for their helium potential for more than two years and have been reviewed by experts, professional geologists and engineers. Royal Helium Ltd. has initiated the design and scoping study for a large scale industrial gas generation plant in Saskatchewan to be conducted by the Saskatchewan Research Council. It is Royal's first step in determining the economic potential of a large scale facility to separate and monetize the gas streams associated with helium production wells in Saskatchewan. In Saskatchewan, helium is produced along with large streams of other inert gases for which there is a large and established North American and global market. Inert gases are gases that are very inert and participate in only a few chemical reactions. Royal is now investigating whether there is a way to monetize the entire gas stream. The results of this first technical and economic study are expected to be available in December 2020.
The somewhat speculative value has a current capitalization of only CAD 14.7 million and has returned to its July chart breakout level of CAD 0.26. With the release of the current study, the value could quickly pick up speed again.