Air Liquide said it will invest approximately $150 million to expand its production capacity and pipeline network in Tennessee as part of a new long-term contract with LG Chem. The company said it will supply oxygen to LG Chem’s future cathode active material plant.

The investment is driven by LG Chem’s need for oxygen at its future cathode active material manufacturing plant for lithium-ion electric vehicle batteries, Air Liquide said. According to the company, it will build, own, and operate a second air separation unit, liquefier, storage, and a pipeline at its Airgas production facility in Clarksville, Tennessee.

The expansion of the Airgas facility, first inaugurated in 2013, is expected to be completed in 2027. It will produce additional oxygen, nitrogen, and argon, enabling the company to ensure a supply to industrial, healthcare, pharmaceutical, food production, and water treatment customers in Kentucky and Tennessee, it said. Air Liquide plans to use renewable electricity to produce low-carbon products.

“Serving a key industry in the energy transition, this investment is in line with the Group’s Advance strategic plan and our commitment to supporting our customers with concrete solutions,” Matthieu Giard, group VP, Americas, said. “This is further recognition of our expertise in the United States, where the energy transition is gaining momentum and where we benefit from a solid position, combining both a historic presence in major industrial basins as well as a local anchoring thanks to Airgas. As part of the long-term contract signed with LG Chem, we will be putting our solutions at the service of the battery ecosystem in the United States. Additionally, through this investment, Airgas will more than double its local liquid nitrogen, oxygen and argon production which will enable us to support the increasing demand from merchant customers in Tennessee and surrounding states.”