Praxair And BP Finalize Hydrogen Supply Agreement.

Business Editors

DANBURY, Conn.--(BUSINESS WIRE)--Sept. 5, 2002

Continuing with its strategy to expand its Gulf Coast hydrogen business, Praxair, Inc. (NYSE:PX) has finalized an agreement with BP whereby Praxair will supply hydrogen to BP's Texas City, Texas, chemicals and refinery complex.

Praxair will build two new hydrogen plants in the U.S. Gulf Coast area using state-of-the-art design and emission controls in order to supply the hydrogen to BP. The estimated start-up of the plants is in the second half of 2004.

BP will use the hydrogen as a feedstock in various chemical processes, in the production of very low-sulfur gasoline and diesel fuel, and for upgrading heavy oil components to lighter, clean fuels. BP is committed to supplying a full slate of low sulfur, cleaner burning fuels from its Texas City refinery over the next few years. The hydrogen agreement is also fully aligned with BP's commitment to reduce emissions of nitrogen oxides in the Houston/Galveston area as well as reduce carbon dioxide to combat global warming.

Anticipating the growing requirements of BP and other refining customers, Praxair previously announced plans to add approximately 300 million cubic feet per day (354,000 cubic meters per hour) of hydrogen capacity to its 300-mile Gulf Coast pipeline system, the largest in the world. With the expansion, Praxair's customers from Houston, Texas, to Lake Charles, Louisiana, will have access to over 600 million cubic feet per day of hydrogen. The hydrogen will be supplied from a series of new and existing steam-methane reformers and hydrogen-recovery systems.

"Praxair plans to play a key role in helping refiners meet increasingly stringent regulations for transportation fuels that will be implemented over the next four years," said Dan Yankowski, vice president, South Region, for Praxair's North American Industrial Gases organization. "Our ability to understand the refiners needs and to reliably supply hydrogen will be critical in helping them reduce their costs and comply with the regulations."

Praxair supplies a complete portfolio of large-volume industrial gases, cylinder gases and specialized services to refinery customers and is a leading supplier of hydrogen to customers worldwide. It operates 22 steam methane reformers and seven major hydrogen pipeline systems that deliver more than 500 million cubic feet per day (590,000 cubic meters per hour) of hydrogen. Praxair supplies more than 50 refineries and petrochemical plants from its Gulf Coast pipeline system in Louisiana and Texas.

BP is the largest oil and gas producer and one of the largest retailers in the United States following a series of mergers and acquisitions with Amoco, ARCO, Burmah Castrol and Vastar. Today, with operations in almost every state, BP is a leader in oil and gas exploration, production, refining, chemicals, commercial products, gas trading and solar energy business. BP has 100,000 employees worldwide and 42,000 in the United States with major operations in Houston, Alaska, Los Angeles and Chicago. BP's market capitalization is $180 billion and the company is one of the top three oil companies in the world. More information on BP is available on the Internet at www.bp.com.

Praxair is the largest industrial gases company in North and South America, and one of the largest worldwide, with 2001 sales of $5.1 billion. The company produces, sells and distributes atmospheric, process and specialty gases, and high-performance surface coatings. Praxair is a recognized leader in the commercialization of new technologies that bring productivity and environmental benefits to a diverse group of industries, including aerospace, chemicals, electronics, energy, food and beverage, healthcare, manufacturing, metals and others. More information on Praxair is available on the Internet at www.praxair.com.