Valero will also source more than 200 million standard cubic feet per day of hydrogen for its Gulf refineries from Air Products. (Earlier post.)

In Louisiana, Praxair is installing a new, 135 million scfd hydrogen plant at Valero’s St. Charles refinery. Under a long-term agreement, Valero will consume 120 million scfd of hydrogen and approximately 400,000 pounds per hour of steam at its new 50,000 barrels-per-day hydrocracker. Start-up is expected in the fourth quarter of 2012.

Praxair is extending its Louisiana pipeline by 50 miles, connecting the new hydrogen plant in St. Charles to Praxair’s existing complex in Geismar, Louisiana. The pipeline extension is scheduled to be in operation by the second quarter of 2012.

The new facilities will allow Praxair to supply other customers in Louisiana, providing a hydrogen supply alternative to refineries and chemical plants located in the lower Mississippi River corridor.

Additionally, Praxair is installing a new 135 million scfd hydrogen plant at Valero’s Port Arthur, Texas, refinery. Plant start-up is scheduled for the first quarter of 2013. Under the new contracts, Praxair will supply 150 million scfd of hydrogen and approximately 200,000 pounds per hour of steam to Valero’s 50,000 barrels-per-day hydrocracker. Hydrogen will be supplied from the new plant in conjunction with Praxair’s one billion scfd pipeline and storage complex.

Hydrogen is used by petroleum refiners to produce ultra-low-sulfur diesel fuels. Demand for ultra-low-sulfur diesel fuel continues to increase in order to comply with environmental regulations.

Worldwide, Praxair operates 40 hydrogen production facilities and seven hydrogen pipeline systems.