Feb 24, 2022
Operator
Good morning and welcome to the Chart Industries, Inc 2021 Fourth-Quarter and full-year results conference call. All lines have been placed on mute to prevent background noise.
After the speakers ' remarks, there will be a question-and-answer session. The Company's release and sub financial presentation was issued earlier this morning and can be accessed by visiting Chart's website at www.
chartindustries.com. A telephone replay of today's broadcast will be available following the conclusion of the call until Thursday, March 3, 2022.
The replay information is contained in the Company's press release. Before we begin, the company would like to remind you that statements made during this call that are not historical, in fact, are forward-looking statements.
Please refer to the information regarding forward-looking statements and risk factors included in the company's earnings release and latest filings with the SEC. The Company undertakes no obligation to update publicly or revise any forward-looking statement.
I would like to turn the conference call over to Jill Evanko, Chart Industries CEO.
Jill Evanko
Thank you, May. Good morning, everyone, and thanks for joining Joe Brinkman and me today for our fourth quarter and full-year 2021 earnings call.
As usual, I will refer to the supplemental presentation which can be found on our website. Starting on Slide 3, I'm going to give you our punch line takeaways for those who want the summary version in one or two minutes here.
We're extraordinarily pleased to share that our fourth quarter of 2021 set new quarterly records and orders backlog in sales, resulting in full-year records for each of those as well. The fourth quarter was inline, and for some metrics, above our expectations that we had heading into the quarter, and we were able to accelerate some projects and burn some lower margin backlog off as well.
Additionally, fourth quarter reported non-diluted earnings per share of $0.34 or adjusted non-diluted EPS of $0.73, was in line with our expectations and contributed to our record adjusted non-diluted full-year EPS of $2.84. For 2022, as well as the coming years, I would describe our perspective as very excited about our positioning in the markets we play, our complete portfolio of molecule agnostic technology and equipment.
And for the first time seeing all elements of LNG progressing quickly. I'm more confident in our baseline reiterated 2022 guidance, given the commercial activity and our pricing and cost actions.
And I'm also more confident than I have ever been previously, that there will be upside to it given the pending big LNG potential work. Given the escalating fighting in Ukraine in the past day, and what we know right now, our comments today remain intact.
I'd also remind everyone that we're not a pure-play company in any end market or molecule. We are molecule agnostic in terms of variety of applications ranging from LNG to hydrogen to traditional oil and gas, which is one of the greatest aspects of our business.
So if one or more of these end markets or applications is positively or negatively impacted from macro circumstances, others are likely to be oppositely impacted. Now, let's get into detail on each of these and our outlook.
On slide 4, you can see that not only did we set records for the total company in orders, sales, and backlog, both in the fourth quarter and the full year. But that it was driven by very broad-based demand across our product categories and geographies.
Additionally, the first quarter 2021 mark the third time in 2021 that we set a new order record. Orders for the year were $1.68 billion, over 26% higher than the former full-year record orders.
This resulted in record backlog of $1.19 billion, of which 80%, approximately, is forecasted to shift in 2022, Every application within our Specialty Products segment had set a record for orders and sales in 2021. And each application had full-year order growth above 15% compared to 2020.
Total Specialty Products full-year orders of $649 million were a 132% increase over 2020. Food and beverage full-year orders were 49% higher than the full year 2020, and fourth-quarter 2021 food and beverage sales also hit record highs.
We anticipate continuing record order levels in food and beverage in 2022 with ongoing restaurant footprint growth and specific projects such as our national account, Chick-fil-A, doing refurbishment work to upgrade over 100 stores with our tanks beginning this month. Every product category within our Cryo Tank Solution segment had record sales and record backlog for the year.
For the full-year 2021, we sold a total of 594 trailers, a nearly 65% increase over 2020. Additionally, orders for fueling stations set new records both in the fourth quarter as well as the full year, with 48 stations sold alone in the fourth quarter.
Both broad-base demand as well as these trailer and station trends continued into 2022 so far with an additional 13 stations built in the first six weeks of this year, as well as an additional 109 trailer orders both in that same 45-day period. These orders contributed to January 2022 being our highest order January in our history.
Also, we have seen very strong demand for rail cars recently from multiple customers, including one order in February 2022 for $6 million. Rail is another differentiated specialty products category for us.
The fourth quarter and full-year 2021, we're also our highest sales quarter and year in our history with $378.9 million in sales for the quarter and $1.318 billion in sales for the year. Fourth quarter sales increased 21% when compared to the fourth quarter of 2020, an increase of 32% when you exclude big LNG revenue, which was $25 million in the fourth quarter of 2020.
Generally, we were able to meet customer delivery expectations in the fourth quarter of '21 despite the supply chain logistics, inflation, and labor challenges I will speak to in a moment. Much of the ability to keep up with shipments was the result of our strategic inventory build throughout the year.
Repurchased just under $100 million of additional material in 2021 than in a typical year. With our remaining safety stock, we feel confident in our ability to execute against our backlog.
The sales progression throughout 2021 is shown on Slide 5, as well as adjusted operating income as a percent of sales. You can see that both the third and fourth quarter of 2021 had adjusted up a margin of approximately 8.7%.
Pointing to the far right-hand side of the slide, you can also see that there was approximately $16.8 million that was a drag to operating income in Q4. These were costs which were not adjustments to either our adjusted operating margin or our adjusted EPS figures.
Without these items, adjusted operating margin would have been just over 13%. These items included logistics, transport, freight cost, inefficiencies from labor disruptions and specific increases in material costs and expedite fees.
With respect to labor, our COVID-19 absences were still meaningful in the fourth quarter, yet better than the third. And these absences did not meaningfully impact our sales in the fourth quarter of 2021.
Eight of our global manufacturing sites had 100% on-time delivery in the fourth quarter, which was worth noting given all of the well-advertised challenges across all industries. I'd point out that we have had continued absence early in the first quarter due to COVID globally, and we've had contemplated that into our guidance.
We have taken specific actions today to address each of these, some of which you heard on our third quarter earnings call. And the next pages in the supplemental deck address additional steps taken which will positively offset these challenges incrementally throughout 2022.
This can't be accomplished with pricing alone, and so using our groupings of three that we like to do, we've taken pricing, cost reduction and automation actions. While we did not adjust for the cost that I just described, there were certain one-time or specific costs in gains that we do add back or reduce from our adjusted EPS and you can see those on Slide 6.
We added back restructuring and severance costs, the write-off of bank fees resulting from our October 2021 refinance of our revolving credit facility, deal and acquisition-related costs, and organic capacity and startup costs. We reduced EPS, adjusted EPS, in particular by the gain booked in Q4 related to our original minority investment in Earthly Labs upon the completion of the full acquisition of that business in December of 2021, as well as the mark-to-market gains within the quarter on our equity investments, As previously indicated on the Third Quarter 2021 Earnings Call, we anticipate add-back amounts to reduce as we head into 2022, given timing of acquisition integrations, in-flight capacity startup expenses, as well as not anticipating any further banking or financing charges or changes.
Details of the reported non-diluted EPS of a $1.66 for the full year and the record adjusted non-diluted EPS of $2.84 is shown on Slide 7, a detailed reconciliation to these is included in the press release financials. So let's talk about why we have confidence in our 2022 outlook, and also our confidence in pricing covering cost on new orders since the end of the third quarter of '21.
slide 8 shows our 3 main material categories on the left side of the page, all increasingly above last year. So same point in time this year versus same point in time last year of roughly 50% or more between those 2 periods.
Therefore, pricing actions were and continued to be absolutely necessary in combination with these cost reduction activities that we're about to speak to. We priced in 3 categories as well, shown on the right hand side of slide 8.
Standard pricing for book and ship products, which we have adjusted prices as we have seen, costs change. Project-based pricing for which we have meaningfully shortened bid validity timing to capture the most current material costs.
And finally, the long-term agreement category, where when possible, we have worked with our customers to adjust pricing mechanisms to more accurately need to reflect the current state versus the typical lagging mechanism, which were fine in environments that are not hyper-inflationary. As I reflect on the fourth quarter in the first month of 2022, material costs and availability behaved materially, pun intended, as we had expected heading into each quarter, and we took additional actions that I'll go into on Slide 9.
Before turning the page, nearly all of what you hear are challenges on this topic. Just let me take 1 moment and point out a piece of positive news, which is that we are seeing better availability in carbon and stainless steel recently.
And carbon steel pricing has been trending down over the last 60 days. Additionally, availability of containers and trucks has been improving, and container cost was down 13% from the end of Q3 to the end of Q4, 2021.
If there is one slide in his presentation that should provide you with a level of detail that we're comfortable with coming out of the cost price drag as we burn off lagging backlog, it is slide 9. In addition to the pricing actions you heard about in October, we implemented two additional price increases in the fourth quarter of 2021.
And increased our temporary surcharges, which are expected to cover our additional costs on new orders. To open 2022, we took further price increases on specific product categories and LTA mechanisms adjusted up for certain agreements.
Given the increases in transport and freight costs that are well-documented, we have eliminated free freight on volume discounts and in order to keep product moving through our shops, we have implemented storage fees for customers delaying picking up product. As I said earlier, staying ahead of the inflationary environment and other class challenges cannot be accomplished with pricing alone.
The second leg of this is organic cost-out actions, and you can see specifics on Slide 10. We have approximately $29 million of cost out actions underway, with $14.5 million of it related to sourcing, $10 million operational, whether bringing outside work in, automating processes, robotic welding, just to name a few, and about $2.5 million by leveraging our Hyderabad, India Center of Excellence for certain functions and open roles.
Some of the automation, productivity, and optimization projects in-flight require organic capital expenditure investment, and you can see specifics of that on slide 11. In addition to our investments in augmented reality for welding training, robotics on certain product lines in our facilities globally, and 3D printing for jigs and fixtures, we are also investing in expanding capacity for high-demand products.
The capacity expansion, coupled with our flex manufacturing approach, which has been underway for about 2 years now. With the intent to have each of our products being capable of being made in more than one location, as well as focusing certain facilities with specific skill sets on higher value end products.
There are numerous of these types of projects underway. So let me just speak to a few of them briefly.
We're well underway on adding a 98-inch brazing furnace and associated brazed aluminum heat exchanger line to our Tulsa, Oklahoma manufacturing location. This will allow Bruce quarters to be manufactured both in Wisconsin and Oklahoma and provide flexibility for Specialty Products as well as big LNG.
This line is expected to be complete around the end of the year. This is located at the same site as our expanded towards flex manufacturing, where we're doing higher volumes, larger components such as skids for a variety of our product lines.
And not to just be a volume facility. We have our 3D printing capabilities at this site as well.
Our Germany Trailer facility is very busy as you heard, with the numbers that I shared earlier. And we're expanding it onto the adjacent land that we own.
This expansion not only allows for expanded industrial trailer and gaseous hydrogen trailer manufacturing that we currently do at that site, but also will give us production capacity for liquid hydrogen trailers in the EU. Once the expansion is complete, dislocation will offer service and refurbishment of stationary equipment.
Our Sri City, India expansion is underway, also, at our own land at our existing sites. Our India business posted record orders and sales in 2021 and demand is expected to continue to increase.
And you've heard us talk about our love of the Teddy Trailer and Tank location in Theodore, Alabama, which came to us through our acquisition of the business in October of 2020. The location sent numerous records for production order intake, sales, and margin in 2021 and we are leveraging a talented workforce and local pool of talent as well as the 300,000-square-foot facility for additional product manufacturing, freeing up space in other locations.
We accelerated certain capital investments into the fourth quarter of '21, as shown on Slide 12, which resulted in full-year 2021 capital spend of $52.7 million. Fourth-quarter of 2021 capital spend of $16 million included certain activity in our capacity expansions just described, as well as robotics.
Consistent with our expectations, we generated cash from operations of $20 million in the fourth quarter, when adjusted for one-time impacts, adjusted free cash flow was $34 million net of capital expenditures. Throughout 2021, we strategically decided to increase our on-hand inventory balance as a result of the significant increases in material costs.
And the already frequently discussed availability challenges. This decision resulted in lower than typical free cash flow for the year.
We are pleased with the decision as we were and are able to meet our broad-based demand. And while we continued to carry a higher than typical inventory levels into this year, 2022, to meet this demand in an ongoing difficult supply chain environment, we still anticipate that free cash flow for 2022.
We'll reflect the tempering of these challenges as the year progresses, as well as the timing of sales out of our backlog. Our outlook for 2022 free cash flow is approximately $175 million to $225 million, excluding any free cash flow impacts from Big LNG work that is anticipated to be booked in the year, but is not yet in backlog.
So now let's turn our attention to innovation that is underway: segment specifics in our 2022 outlook. Slide 13 shows our Nexus of Clean menu, full solutions including process technology and equipment for clean power, water, food, and industrials.
The neat part of this menu is that customers can choose a total solution or treat it as an ala carte menu, picking what piece or part they need. As I said earlier, our equipment is molecule and technology agnostic so it can work for a variety of needs.
Furthering this full solution set and expanding our Carbon Capture in food, beverage, and cannabis applications and Specialty Products was the completion of our acquisition of Earthly Labs in December of 2021, the world leader in installations of small-scale Carbon Capture. Through Earthly Labs, we booked our first winery install, it's Trefethen Winery, our first distillery, our first New Zealand installation, and our first UK customer.
Not to be outdone though was our ChartWater platform, which consists of AdEdge and BlueInGreen process technologies with Chart equipment, which posted record orders backlog in sales in both the fourth quarter as well as the full year. We're beginning to see multiple water treatment opportunities in non - North American locations such as India, including a $6-million-win yesterday.
Specialty Products tends to be the segment, also, with the most first of a kind, and you can see that on slide 14, there are 22 of these folks in the fourth quarter 2021 contributing 79 in the full year. On the right-hand side of Slide 14, you can see our 402 new customers for the full-year 2021 with 37% in EMEA and India, 29% in North American, 24% in China, and 10% in rest of world.
Another way at looking at how broad-based the demand that we're seeing really is. One of the things we pride ourselves on as well, is our leading innovation mindset and being the first to translate that innovation into actual products in orders.
We're very privileged to have, as a result of our acquisitions in the Nexus of Clean, all of the founders and CEOs of those businesses decide to stay in the Chart family. In order to harness that are amazing intellect, entrepreneurial spirit, and start to leverage the inter-linkages among clean power, water, food and industrials.
We accreted our founders’ innovation team, as seen on Slide 15. And internally we called out the Ocean's 11 team, but our lawyer said I can't really use that for copyright purposes.
So we'll go with Foundries and Innovation Team. These Founders continue to run their businesses, but have joined forces to come up with innovative ideas on bringing their individual products or technologies together.
And we've already seen immediate impacts to the business as shown on Slide 16, and that's just a subset of what's happening. For example, AdEdge is utilizing our Tulsa flex manufacturing facility and our Repair Service and Leasing 24-hour service capabilities, which resulted in a win of $1.4 million, reverse osmosis contracts just in January.
Both AdEdge and Earthly Labs are selling water treatment to Earthly brewery customers. That's less than 2 months in and also pretty need is that we have a new addition to our emerging leader program from the AdEdge team, bringing additional high-potential talent into the broader business.
A founders’ innovation team is also coming out with the next generation of technologies. Slide 17 shows one that the AdEdge team is working with hydrogen companies to design and implement into electrolyzer offerings.
This is a containerized water treatment solution for ultrapure water for green hydrogen electrolysis. All right, so that's pretty cool, but now you can ask me a technical question in Q&A on that particular application.
For the technical stuff, I'm going to turn it over to Brinkman.
Joe Brinkman
Thanks, Jill. Now, let's turn to a few data points for the four segments.
Starting on Slide 18, you can see our hottest Specialty Products area, hydrogen. Fourth-quarter 2021 Specialty Products orders of $182.3 million, included hydrogen and helium orders of $85.4 million, including a 15 ton per day hydrogen liquefier and 19 hydrogen trailers, with five of these sold for use in South Korea.
For the full-year 2021 we received orders for 62 hydrogen trailers compared to a prior record of 26 ordered in 2020. This activity contributed to full-year hydrogen and helium orders of $282 million, a record year, and a 640% increase over 2020.
Also, we recently announced the first ever successful test of a fuel cell operating with liquid hydrogen, utilizing Ballard 's fuel cell and Chart 's hydrogen vehicle fuel system. We supported students at the University of Delft with their development of Le Mans style hydrogen racecar.
And in the fourth quarter, we completed an MOU with [Indiscernible] for the development of more standardized and integrated hydrogen solutions. It is also noteworthy that the geographic spread of hydrogen customers is expanding.
And we are in the various stages of discussions with over 300 potential customers globally. We included slide 19 for information on some of the countries that are becoming more active commercially in hydrogen over the past 3 to 6 months.
Also, a differentiator for our hydrogen product offering is our ability to have certifications in these regions. And there are currently no global hydrogen certifications.
The China Group Code is a great example for the liquid hydrogen storage tanks. As a reminder, and as a result of this, we booked a $9 million hydrogen order in the third quarter of 2021 for a customer's project in China.
What isn't showing on the slide in the deck, but worth quickly touching on, is Carbon Capture. Our large industrial Carbon Capture offering, Sustainable Energy Solutions ' Cryogenic Carbon Capture has recently had wider commercial acceptance.
We are currently working with 199 potential and current customers for the SES offering. In the fourth quarter, we booked an order for a feasibility study using our CCC technology with International Flavors and Fragrances.
Also, the national oil and gas company in Colombia signed a contract with us to conduct a feasibility study in a flue gas stream for one of Ecopetrol 's refineries. Result of the evaluation will be used by Eagle Petrol to estimate the feasibility of this technology and reducing its CO2 emissions.
We continue to believe that carbon capture needs to be a key part of this decades plan to achieve both public and private sector 2030 carbon emission reduction targets. Moving to Cryo Tank Solutions, slide 20 focuses on Chart China.
I mentioned the Group Code and liquid hydrogen tank order on the last slide, which is one of many examples that our China business is evolving into a key supplier, both to our sites as well as our external customers. This location is by far our largest intercompany supplier, which allows us to leverage our flex manufacturing capabilities that Jill described earlier.
And note the numerous records set by the team on the left-hand side of the slide, including full-year 2021 record orders, sales, operating income dollars, and operating income as a percent of sales. Lastly, on the right-hand slide of Slide 20, you can see some of the recent Chinese policies which indicates support for cleaner power.
We are well-positioned in the country to be a key participant in fulfilling equipment needs for these upcoming national policies. We continue to target 20% of total revenue in the coming few years for our repair, service, and leasing segment.
There are numerous drivers of that growth, including the additional footprint we have in place. 2021 being our first full year of having more fulsome repair and service capabilities and customers in Europe, additional long-term agreements and an increasing level of onsite startup work.
One of the larger drivers of this grows -- growth is the leasing business. You can see on slide 21, the significant progress made in a short period of time on increasing our assets available in our leasing fleet, as well as more than doubling the number of customers with active leases in one year.
And perhaps the most impactful is the revenue from leasing of $49 million in 2021 expected to grow in 2022. It is finally a very exciting time for LNG.
Whether Big LNG, Small LNG, LNG infrastructure, all of which are positives to us. We were actively involved in the startup processes at Venture Global Calcasieu Pass, export terminal this past month.
And in the fourth quarter of 2021, we were issued another patent for our IPSMR process technologies, covering the process system itself. Additionally, IPSMR and IPSMR Plus have been qualified by another major international energy company, TotalEnergies.
And we continue to expect Venture Global Plaquemines Pass phase one to proceed to FID in the first half of 2022. This project is anticipated to include approximately $136 million of Chart content.
In the fourth quarter of 2021, we received a $1 million 1st release on engineering work on this project, and yesterday, a 2nd release of $9 million. Cheniere, whose Corpus Christi stage three Project we anticipate will include approximately $375 million of our content, also released us an engineering work in December 2021 and we expect a full notice to proceed in 2022.
Tellurian Driftwood Project phase one continues to progress towards their intent to proceed to construction in early 2022. We anticipate this will include over $350 million of Chart content, none of which is in our backlog.
We were awarded approximately $80 million of orders for three small and utilities skill LNG liquefaction projects with three different customers during the last week of 2021. Contributing to a total of seven liquefier orders in 2021, our record number of liquefiers booked in our history.
And we believe this is just the beginning of the small-scale trend. Our commercial pipeline of small, utility scale and re-gas potential projects totaled over $1.5 billion.
There was a line in our press release related to what we expect to be a constructive oil and gas spending environment this year. In the past few months, we have seen an uptick in process, and upstream inquiries, and in traditional applications as well as new, energy-focused infrastructure projects.
Additionally, bio-gas projects are gaining traction as their production cost is not impacted by direct market pricing. Back to you, Jill for Slide 23.
Jill Evanko
Thanks, Brinkman. Considering our record order Q4 and full-year 2021, record backlog is year-end, as well as visibility to our strongest ever commercial pipeline of potential work, we reinforce our anticipated 2022 full year sales outlook range of $1.7 billion to $1.85 billion.
This outlook does not include any additional or new Big LNG projects, although we do expect orders, as Brinkman just said, in the first half of 2022. It does include the engineering work which began for two Big LNG projects in December.
Associated adjusted non-diluted EPS is expected to be in the range of $5.25 to $6.50 on approximately 35.6 million weighted shares outstanding, and assumes a 19% effective tax rate. We anticipate the first half of 2022 will include a margin drag, similar to what we described last quarter from historical levels, from the ongoing macro challenges, but increasingly be offset as the year progresses by the positive impact from the actions we described on today's call, as well as one that will continue to take as we respond to ever moving macro situations.
Slide 24, is important to your modeling. Our first quarter is typically sequentially lower than the prior fourth quarter.
This is expected to be the same for Q1 of 2022. Also, the timing of our first quarter 2022 sales are seasonally in line with the typical Chart year where the first quarter is the lowest of the year given Chinese New Year and customer capital spend behavior.
Sales are expected to sequentially increase throughout the year. Our historical revenue timing has typically been stronger second and third quarters, with the lower quarters being the first and the fourth.
In 2021, we experienced steadily increasing revenues quarter-by-quarter through the year. We expect that trend to occur again in 2022.
In particular, given the timing of revenue recognition related to the four liquefaction orders that we booked the last week of December, 2021. You can also see the legal clarification in the last bullet on Slide 24 that the slide is not intended to convey specific quarterly guidance and we don't intend to provide quarterly guidance information on a quarterly basis.
Right, before opening it up for Q and A, I'd like to provide an update on our latest information regarding the one specific preclosing liabilities that we maintained related to the divestiture of the cryobiological business, which was completed on October 1st, 2020 with a sale to Cryo Port. This relates to the lawsuits related to Pacific Fertility clinic, details of which can be found in our previous 10-Qs and 10-K, and including additional information in our 10-K, which we intend to file later today.
We have not reached a conclusion that losses in these cases are currently probable. However, based on further developments including the status of the various lawsuits, preliminary discussions in an attempt to resolve the entirety of these cases, and the consideration of insurance coverage, we estimate that losses ranging from $0 to up to $50 million are reasonably possible.
This is a current estimate, so the ultimate cost arising from this matter could be materially lower or higher depending on the actual costs incurred to resolve the claims in the lawsuits. We will provide updates in future quarterly filings to the extent any developments change.
Additionally, registration for our Investor Day on May 5th of this year at the New York Stock Exchange, which is scheduled from 7:30 AM to 11:30 AM, Eastern Time is now open. Registration can be completed online, at the link that's shown on Slide 25 of the supplemental deck.
So with that, May, let's open it up for Q&A
Operator
[Operator Instructions]. Please limit yourself to ask one question and one follow-up.
First question is from the line of Eric Stine from Craig-Hallum. Your line is now open.
Eric Stine
Hi, Jill. Hi, Joe.
Jill Evanko
Hey, Eric.
Joe Brinkman
Hi.
Eric Stine
So maybe just starting on the orders, I know you're trying to stay ahead of it, the materials costs. you've got some storage charges.
You mentioned storage fees, all of that. And still having a record order quarter in year in the phase of that, I mean, are you getting any push back on that from the market or is there a level that you foresee that you think that would start to impact order levels?
Jill Evanko
Generally, our customers are very reasonable, understand what the current situation is. And it has not meaningfully impacted the demand as you commented in your question.
So we see pieces and parts in terms of push back, it depends on any particular situation or product category which we work to manage through with the customers. And that in some cases can be moving delivery schedules around, and replacing componentry with other components.
So there's a lot of different moving pieces that go into how we handle this and how we price and the timing of such. At this point, we continue to move those prices forward and include additional surcharges where necessary, and we intend to keep doing that.
And what we've seen here is that if there are -- if there is lost business related to those pricing changes, that there are others that are [Indiscernible] for those slots.
Eric Stine
Okay. That's great.
And maybe just a follow-up on that. Obviously again, big quarter, was that -- do you see that as indicative?
I know that it's continued in January. I mean, was there any aspect of that that maybe was up buy ahead of those price increases?
Or this kind of maybe not that this level is sustainable, but that you see sustainable orders strength going forward.
Jill Evanko
So I would say my answer to the buying ahead at the end of the fourth quarter is no. That wasn't the case at the end of the second quarter last year.
So far different in terms of the reason for Q2 being the former record in Q4 being the new record, didn't have really anything in the fourth quarter to do with buying ahead of pricing. Most of that price was already taken in the quarter itself.
There is definitely forward progress on particular projects, which I think drove these customers saying, hey, I have to get this moving. And so therefore, I tell one story.
Heck, we had our team negotiating with the customer in Germany Christmas eve night, and they wanted to stay until they got the design and everything locked and loaded because the timing on implementation of said projects is very important to these customers. So we're seeing timing [Indiscernible] times deliveries being as if not more important to our customers than the pricing, discussions and challenges that we have to have those conversations on.
Do I think that this trend continues? I would tell you I was surprised that January order levels were as strong as they were.
I would've anticipated at least a breath after the December. And if you looked at the way the Q4 order intake went for those three months, December was the highest of the three months.
So I was expecting everybody to just take a New Year's pause for a moment, and that did not happen. What's interesting is it's not any piece or a part, it's pretty widespread.
I commented in my script around railcars, in particular, because that's another indicator that you're seeing infrastructure capital spend continuing on. And it's not just a piece or a part on the railcar side.
So we've gotten multiple customers coming to us for railcars right now. Trailers -- transportation and movement in infrastructure is really hot right now.
Eric Stine
Okay, that's great color. Thanks, Jill.
Operator
We have our next question from the line of Ben Nolan from Stifel. Your line is now open.
Ben Nolan
Great. Thanks.
Jill and Joe.
Jill Evanko
Hey Ben.
Ben Nolan
I wanted to get to Big LNG. I know we hate to talk about it.
But just a few things. First of all, is it relates to Plaquemines and there was the limited notice to proceed.
How much of that revenue hits this year versus next year, and then ultimately assuming some of these things do moving forward, what's the right number to think about? The 2022 impacts versus what's a little bit later.
Jill Evanko
So let's start with the second half of the question. If Plaquemines moves to full notice to proceed for us, which would be the full order of a $136 million on phase one in the coming, let's just say two months here, I do anticipate that to be the case, then I'd approximately $25 million to $30 millions of revenue associated with that into 2022.
And then you can spread the rest across another seven quarters evenly. With respect to the limited notice to proceed, including the additional $9 million yesterday, that's a good indicator that the project is progressing as we're expecting it to and included in that 25 to 30 is the 10 that I'm talking about, so that's how to think about that.
And then you can pretty evenly utilize that math across other projects related to -- okay if you book it in March, you start to get the revenue in September. You can put that amount of book to revenue, time to these other projects and pretty evenly extrapolate what I just said on Plaquemines.
Ben Nolan
Okay. That's helpful.
And then switching gears for my follow-up. As it relates to the increased level of activity around U.S.
oil and gas, just drilling and production and so forth. I know you guys are a little bit more midstream focus, and so there might be a little bit of a lag there, but assuming that we stay on this kind of a pace, how should we think about sort of what -- or is there a way to think about what the impact of that might be to growth and heat exchanger business?
I guess that's probably where it mostly is and relative to your -- what's already in your guidance.
Jill Evanko
Thanks for picking up on that. I was -- that was part of my opening comments around, being molecule agnostic.
We still -- we do simply still serve the oil and gas markets as they need. We've built very minimal positive growth associated with this into our outlook because we haven't seen a lot of speculative buys, like in a historical up-cycle for oil and gas.
With that said, as Brinkman briefly mentioned, we have seen an uptick in process upstream inquiries in some of the traditional applications over the last 2 months. I would say that there's not a lot of upside built into the current guide.
As we are a little bit of wait and see mode, but that it, it progresses in hold as you described, that is upside to what is built into our current guidance.
Ben Nolan
Okay. All right, I appreciate it.
Thanks, Jill.
Jill Evanko
Thanks, Ben.
Operator
Next question is from the line of John Walsh from Credit Suisse, your line is now open.
John Walsh
Hi. Good morning and congrats on wrapping up a strong year.
Jill Evanko
Thanks, John.
John Walsh
Wanted to first start and maybe help us understand some of the margin dynamics as we look forward. I apologize if I missed it.
Can you talk about what your kind of margin in your backlog looks like either on a year-over-year basis as you put some of these larger projects in first of a kind in there?
Jill Evanko
Sure. And John, just to be specific, looking at forward, is that your question, into [Indiscernible]?
John Walsh
Yeah. Correct.
Yeah. So as you execute on that backlog, I think this quarter you said you executed on some lower-priced backlog, Just --
Jill Evanko
Yes
John Walsh
-- how much of the margin lift is already baked, because it's just executing on the backlog?
Jill Evanko
Yeah. And there is definitely, I would say that one of the questions I anticipate somebody to ask is around the Cryo Tank Solutions gross margin in the fourth quarter, which I referred to that as accelerating some of the backlog burn off.
And that's the segment where the majority of the lag is. So that's a positive to stepping out of this for 2022.
And I would say Q1 you'll still see us burning that off, which with the way a typical Q1 is from a revenue perspective, and burning some of that off. I'd look at the gross margin there in the middle of 20%, and, and I'm not adjusting that.
So let's just say 26% as we're in the first quarter. And then I'd meaningfully step it up their into Q2 to 28% plus.
And then Q3 and Q4 we, based on how the projects are and how we price those projects, we have a high-level of confidence in that -- that we priced it appropriately. We have the materials associated with that.
Again, we bought a lot of that material in the fourth quarter and the third quarter, so the second half is really strong in terms of the margin associated with these projects in backlog.
John Walsh
Great. And then maybe shifting gears to cash.
Could you just maybe remind us your priorities if these big LNG projects hit, that's going to be a nice influx of cash. You obviously pulled forward some Capex spending.
But how are you thinking about the balance between further M&A and maybe share repurchase?
Jill Evanko
Definitely. So, let's see, I'll go out on a limb here and say that if I could've been buying shares even if we're in a close window, I can't -- I couldn't be buying shares in terms of share buyback, but I would have been over the last few weeks.
With that said, our priorities for cash are around the Capex that we described on the organic side. Number one for us is continuing to automate, optimize our manufacturing given our expectations of the continued demand.
And in terms of M&A and inorganic side of things, we are in opportunistic mode, so we feel great about when we did the deals we did, and having the portfolio that we have right now. it's really the first time that we've had what we want in our offering completely, and we don't have anything in the offering that we want to get rid of.
So that's a great place to be, to be very selective on the M&A side. And then obviously debt pay down with that cash.
To your point, we would have a higher free cash number assuming these Big LNG projects unfold as we expect them to in 2022. And at that point, we'd be looking at other uses of the cash after the investment for growth organically and debt pay down.
So let us get there on the execution side, and then we'll look at other ways to utilize that cash if and when we have that conversation. But focus on growth, automation, productivity, and debt pay down.
John Walsh
Great. Thanks for taking the questions.
I'll pass it along.
Jill Evanko
Thank you, John.
Operator
Next question is from the line of Rob Brown from Lake Street Capital. Your line is now open.
Rob Brown
Hi, good morning, Jill.
Jill Evanko
Hey, Rob.
Rob Brown
My question is on capacity. If Big LNG orders start to hit, how are you on capacity?
And I guess the Tulsa edition helps, but maybe where are your -- where do you sit with capacities if you get these orders?
Jill Evanko
We're in very good shape on capacity that -- for -- we plan -- been planning for this for years. And as you may recall back in 2016, 2017, we added the world's largest brazing furnace into our La Crosse, Wisconsin facility, which actually we have the two world's largest brazing furnaces there.
And then our decision to put the 98-inch furnace into Tulsa adds some flexibility. And the reason we didn't do another of the world's largest is because the 98-inch core -- so the world's largest is 138 inches.
The 98 inch cores are more common in the small-scale applications in the hydrogen applications specialty applications. And so now we'll have a really nice balance of the 98 inch furnaces in both locations.
And then the two larger ones for the Big LNG in Wisconsin. So all told, that even if all of these Big LNG projects hit at the same exact time, we're ready for that, and we're actually ramped up in terms of labor for that.
And we're more than capable to bring on additional liquefaction projects into our backlog with our currency capacity.
Rob Brown
Great, excellent. And then in the Carbon Capture market, you're seeing some stuff starting to hit.
How do you see that playing out over the next year or two? Do you see projects kicking off or is it still early development [Indiscernible]?
Jill Evanko
That's a really interesting question, because I would've thought that that market would be more commercialized to date. And it hasn't been.
Now in the last six months, we've seen these pre -feed and feed studies, and as Joe just described, the ones with -- the one with ISS and the additional and we just booked with the National Oil and Gas of Colombia. These are real projects, so I anticipate we will be booking a full Carbon Capture industrial sized project within the next six months.
Given the timing of the way the feed does and how it's kind of usually 10 to 20 weeks on those. That's why I say in the next 6 months.
I think it's going to start to roll a little bit here. I think it would accelerate meaningfully if the 45Q were addressed in a broader-based fashion at a slightly higher 45Q credit price.
With that said, none of these guys we're working with on the industrial side are waiting for that to happen. They are saying, I've got to move sustainability in ESG is a really important part of our culture as well.
And we can make the economics work even without 45Q. So I think on the larger industrial side, it's going to move.
I think in some of these other applications, the 45Q to is a meaningful part of the decision-making.
Rob Brown
Okay, great. Thank you.
I'll turn it over.
Jill Evanko
Thanks, Rob.
Operator
We have our next question from Ian Macpherson from Piper Sandler. Your line is now open.
Ian Macpherson
Hi, good morning, Jill, Joe.
Jill Evanko
Morning Ian.
Ian Macpherson
Joe world is reminded this morning that energy security from the U.S. is probably at an increase in premiums.
We've and I know that you don't want to harp on Big LNG as central [Indiscernible] even though it's a big near-term event, but you've talked about optionality around some of your three primary projects having accelerated Phase 2 deployment as well. Do you think that recent events amplified those probabilities?
Or just how are you thinking about Gulf Coast LNG? And maybe more runway for the cycle beyond this year?
In [Indiscernible], what's happening in Europe?
Jill Evanko
I think that question is spot on. And I think that the current state of affairs could further accelerate what was already accelerating and toward these phase twos.
So without going into a lot of detail on specific projects, we do expect that certain phase twos happen much faster than was previously designed. And perhaps more projects happen faster now, given the situation in the global domain.
So, [Indiscernible] this unfortunate situation ultimately amplifies the fact that energy security and energy infrastructure is going to be a meaningful part of the coming years here, which in turn benefits the Chart business.
Ian Macpherson
My others have been asked and answered. Appreciate all the color today.
I'll pass it over to [Indiscernible].
Jill Evanko
Thank you Ian. Appreciate you.
Operator
We have our next question from Andres Menocal, Evercore ISI. Your line is now open.
Andres Menocal
Good morning, Joe.
Jill Evanko
Hey Andre.
Andres Menocal
So I guess my first question and this is always interesting to me is what you're seeing in terms of the industrial gas customers. I know a couple of quarters ago it seemed like there is an inflection in demand from semiconductors and electronics.
And just curious to see if you're seeing any change in your customer behavior just at a high level in terms of what we saw in Europe recently, just given the margin compression from higher electricity prices. And is there a sense that maybe that they're going to shift their buying behaviors away from Europe in light of that or anything related to it?
Jill Evanko
We have not seen that to date. I'm not.
I think that that's a very good question to watch for in particular, in light of what's happening in the macro environment. So far we haven't seen that.
What we have seen is pieces in parts moving in different directions with these industrial gas customers, around what type of molecules they're spending time and money on. And so we've seen, obviously we talk a lot about Hydrogen, Helium is another one that we have seen more equipment [Indiscernible] around.
So a little bit around the pieces and parts of the types of offerings that they have, but less so geographic movement. I think that is something we will need to watch going forward.
And in turn, it really is a benefit for us to have the global manufacturing footprint that we do have to be able to decide where we want to make what and back to that flex manufacturing concept of making everything that we do in more than one location. And to go off just a little bit on a tangent here, we saw that the local supply base, it has really benefited us.
But one example I have is sending a tank in a container from China to Germany in 2019 would cost us about $77,000, and now it costs us about $375,000. So you get the sense of the magnitude of moving the pieces around the globe, and localization is a benefit in the footprint as well as in the supply chain.
Andres Menocal
Got it. Thank you.
Thanks a lot. Very helpful color.
My second question is on India. The whole concept of energy transition.
It's been very topped bus weight and I'm just highlighting the recent Green Hydrogen policy. And it seems like it's good in some sense, especially on the electricity side.
as they waive some of the transmission charges as an example. But it seems like it's lacking, in another sense, as we don't see infrastructure development plans for transportation in storage of Hydrogen and amongst a number of other items.
So what's your sense on that in as far as it pertains to Chart and your footprint there and how that would benefit end market demand for your products?
Jill Evanko
We are very bullish on India and across the spectrum. Right now, we see quite a bit of India infrastructure on the natural gas side, we expect that will continue with key customers that you all would be aware of.
We're heavily involved via the U.S. India strategic partnership for them, as well as with Indian government on these, the setting of the strategies.
And there is a focus and there will be actions associated and funding associated with not just cleaner power or cleaner energy. And I think it's broader than just hydrogen, but also with clean water.
So we've set ourselves up and it's also very important in India to manufacturing India, which we've been doing for decades via the BRV acquisition that we did a few years back, and they've been established for a couple of decades there. That's important to us, so we're really well-positioned to be localized.
In water, my comment about our win yesterday, over $6 million order win for water treatment projects is important, because we're seeing the government and the government officials paying close attention and putting real dollars to it. India on water treatment, they're working to provide clean tap water by 2024 to all of the households across 600,000.
That's a $50 billion investment. And they have commented about $65 billion between now and 2025 on natural gas infrastructure.
So real dollars are going into this. And I think that the national hydrogen strategy that was recently unveiled in last week, there will very quickly moved to real funding for projects.
So we're thrilled with our physician in India and think that that's upside. We've just built regular growth off of '21 into 2022.
I think that upside isn't 2022 per se, it will be a little bit, but in the coming few years, this isn't a late decade. This is a first half of the 20s.
So very excited about that, and thanks for picking up on that, Andres.
Andres Menocal
Thanks, Jill. I'll turn it back to the queue.
Operator
Next question is from the line of Marc Bianchi from Cowen. Your line is now open.
Marc Bianchi
Thanks. I wanted to talk about orders first, and sort of the interplay between orders and revenue as we look beyond '22.
So, you had really strong order quarter here in fourth quarter, and if I annualize that, so if I assume you kind of get that level of orders for every quarter throughout '22, it just gets to the top end of the revenue guidance, so your kind of barely at one times book-to-bill in '22 if you replicate that really strong order number. What kind of orders do you expect in '22, and what sort of order number will we need to see to enabled growth in '23?
And this is all excluding Big LNG.
Jill Evanko
Understood -- I understand your question, Marc, good question. And what I would say is we are expecting -- and we started to see this in '21, but expect that this trend accelerates in 2022 around what we would deem small and mid-scale project work.
It said differently because I think there's varying different -- definitions of MTPA, size is associated with small and mid-scale. But rather for us projects that are in the $10 to $50 million range.
Those used to be really few and far between. And we saw numerous of those in '21.
And based on what's in our commercial potential pipeline, expect that those size orders are happening more frequently. So that's one of the key drivers in 2022 to get to that above one-time book-to-bill orders to revenue metric.
And the other side of that are the liquefier projects, which in some cases can be $50 million to $75 million. So those are more frequent, but not yet consistent every quarter, which is why we don't go out and say, hey, now 460 is our new every quarter level.
So that's really the nuance to why we haven't just said, all right, take the record level and maintain that as happening every quarter because there's not a level of consistency to those larger particular projects, but there is becoming a level of consistency to those middle-sized ones. So that's really what you need to see is the combination of more frequent, little middle, and a few biggers to get us to looking at the growth.
The other side of things is what we don't build in to kind of our regular book and ship in that 40% probability figure that you see I think on Slide 23 or 22 in the deck of book and ship type of products is the industrial gas majors. Those are not ones that we put into sales force for our pipeline method of approaching bookings, so those are kind of regular course of business, and we're seeing a lot of activity there and expect growth in that order book as well, so there's pieces and parts that go into that.
And that's all excluding the big LNG side, but it's really going to be these larger, these little bigs in the bigs.
Marc Bianchi
Okay. Off out of road to my model for those.
Jill Evanko
Yes, [Indiscernible]
Marc Bianchi
Yeah. On the hydrogen and helium, I've got a few questions around this.
First one is just why do we group hydrogen and helium together? And what's the maybe if you could parse the hydrogen number, I'd be curious to know what that is.
And then as you think about that category, what's the kind of growth outlook for '23? I think on the last call we talked, you thought it would be 40% to 50%.
But you had a really strong fourth-quarter, so I don't know if any of that opportunity is pulled forward.
Jill Evanko
Yeah. So, we launched Hydrogen and Helium together I would look to Brinkman and he would say because they're both extraordinarily cold, coldest molecule.
But with that said, the -- you can utilize technology for both that's very similar, and you can utilize, for example, a Helium cycle in to generate Hydrogen -- liquid Hydrogen. So the characteristics of how you handle them are very similar, and therefore that's why we put them together.
If you looked at the $282 - ish millions of Hydrogen Helium orders last year, about 50 was Helium associated. So the rest Hydrogen related.
Now there's some nuances to that because there is about $90 million in the remaining $230 million that utilizes some Helium technology for a Hydrogen application. So it gets a little bit hairy, but straight up Helium was 50 of the 282.
And no there -- while yes, we were surprised by a couple of those orders happening in December, they've now been backfilled by additional potential orders in that commercial pipeline. So I don't view it as reducing the opportunity.
Actually, the pipeline of potential orders, across these categories, is the highest that has ever been. As of, the last time I checked is about a week ago.
So it's filling up nicely.
Marc Bianchi
Okay. Great.
Well, if I could just squeeze one more in on that point with Hydrogen orders. We've seen Plug kind of continually do different kinds of deals to try to backward integrate here, the latest one with fives.
What -- how much of a threat is that to the order outlook there and maybe talk a little bit about the barriers around that business.
Jill Evanko
Definitely. So we're actually just with Plug on Friday and they continued to intend to buy from us across the spectrum of these -- of these types of applications.
With the intent that over the course of time may bring some of that in-house, not all of it in-house. In terms of the ability to take the pieces in parts that they have recently invested in or partnered up on and have it worked together is very difficult to do.
So, I would equate it to the fact that if you've had 10 different pieces of an airplane from 10 different parties that haven't had a lot of experience in Hydrogen applications and then you had to put it together and make the airplanes fly. That will take some development work and some time.
So our view is that Plug 's approach to the hydrogen economy is a great thing for the economy, and -- but also that cryogenics is hard to do. So there are some barriers to be able to very quickly accomplish that.
I would also point out, Marc, that our outlook on the specialty side, in particular on hydrogen, is not changed and not at all heavily reliant on Plug Power as a particular customer, given that we have over 325 different potential customers we're currently working with. So I think it's great and healthy for the industry, but it will take time and therefore we still expect them as a customer in the near and medium-term as well as in the long -term, but probably at a lower level in the long -term as they bring some of this capability in-house.
Marc Bianchi
Great, thanks so much
Jill Evanko
Thank you.
Operator
Next question is from the line of Chase Mulvehill from Bank of America. Your line is now open.
Chase Mulvehill
Hey. Good morning, Jill.
Jill Evanko
Good morning, Chase.
Chase Mulvehill
So I guess quick question on the guide. Pretty wide range here.
I think it's -- if I'm doing the math right, it's about $ 45 million between the high-end and the low-end. So I guess, two questions.
Number one, is there any particular segment that's driving the variability here? I mean, if so which segment?
And then number two, pretty wide range, would you care to push us towards the low end, the midpoint, or the high end of annual guidance?
Jill Evanko
The variability in that, well just early in the year to be able to really hone in particular given the large amount of potential in the first half in our commercial pipeline, no pressure selling billing in the commercial team to get those orders booked. So that really the first half kind of order book is what will drive you to the higher end of the range.
If it goes the way that we anticipate, it will certainly I would -- we would refine that range that direction. But the second half of your question, I have learned my lesson and then I'll drive everybody to the low-end of the range, so that I can beat it.
But, I think, we have a high level of confidence. We would not have reiterated that outlook just based on -- and the fourth-quarter gave me more conviction in that so I think we all were very comfortable with where consensus sits today.
I'd note that of our approximately 20 analysts, a seven to eight of them have big -- some Big LNG already in those numbers. And that's something just to -- that we have to make sure we're clear on.
So certainly if we book any of these Big LNG projects, that's on top of our current guidance range. So we could get a little more specific when we have one of these booked as well, that would take you from the 17 to something certainly in the middle of that range.
Chase Mulvehill
Okay. Perfect.
And then in 2020 to order outlook. I mean, obviously pretty strong even if we just exclude Big LNG and 2021 Specialty Products.
I mean, massive jump in orders. How should we think about Specialty Product orders in 2022?
I mean, Hydrogen and Helium orders where 282 if the model is right? How much should those increase in 2022?
And what about the -- what I'll call baseline or base business and Specialty Products? How should we think about the order growth of that business this year?
Jill Evanko
Definitely. So included in the specialty in the Hydrogen and Helium you had, approximately a $150 million of liquefier, the rest of that being equipment.
Equipment we expect to be double digit growth. We expect the entirety of specialty to certainly continue at double digit growth.
When you start getting peeling back the layers, we expect another year of record on food and beverage. We expect space exploration to be certainly up, probably 20% on that particular business.
The rail business is going to be very active, railcar side of specialty. Cannabis, we would expect to be record again.
And when I say record like, these are 20 plus percent type of year-over-year increases that we're anticipating in these categories. Same with Carbon Capture, where I would -- same with water, where I would say the -- you got to think through how you want to model the liquefaction versus the equipment on the Hydrogen side.
So similar to my answers to Mark's questions, how you think about when we get a liquefier order and they're not always every single quarter. That is what could drive the year-over-year growth to be a lower number on Hydrogen and Helium, but that's really timing, because we think these liquefaction orders are going to happen.
It's just do they happen in Q2 or Q4, or Q1. And then the last one in Specialty that I would call out that we expect to be flat if not down a little bit would be the HLNG vehicle -- over-the-road vehicle tanks because they had such a huge year in 2021 and we're still seeing -- our customers are still seeing the semiconductor supply chain challenges in the trucking industry.
So that one, I would be cautious on.
Chase Mulvehill
Okay. All right.
I appreciate the color. I'll turn it back over.
Thank you.
Jill Evanko
Thank you.
Operator
Next question is from the line of Pavel Molchanov from Raymond James. Your line is now open.
Pavel Molchanov
You were asked a little bit earlier about at the broader context of energy security and I wanted to zoom in on your presence in Europe as it relates to green hydrogen, other aspects of the energy landscape. What percentage of revenue does that represent, and where is the manufacturing located?
Jill Evanko
So far, Hydrogen in Europe in particular, we do mostly infrastructure in Europe. So the Hydrogen liquefaction projects are right now in North America.
So, Canada and the U.S. In terms of the infrastructure, the projects would be primarily around Germany, the Czech Republic, and France, and Italy would be where the Hydrogen work is happening in terms of the customers and use of that infrastructure.
And we manufacture gases Hydrogen trailers in Europe, in Germany. We do the liquid work in the United States before export to those customers in the E.U.
And then we have the ability to do all of the products that we do in Europe outside of Europe as well. So that goes back to that doubling down of where we make what.
So the question really would become if there was an issue in Europe, would we reallocate any of those particular production activities to another location? If we needed to do that, we certainly have the ability to do those tanks in China, in India, as well as in the United States.
So we have the flexibility. I think it's a matter of whether the customer would want to take those from those locations.
Pavel Molchanov
Right? Price up net gas in Europe, $25.
And that's before the last 24 hours, I suppose. Have you noticed a noticeable urgency on the part of European customers to -- well for one thing, reduce their reliance on conventional gas and in favor of bio-gas or green hydrogen as a replacement?
Jill Evanko
We've definitely seen an update in bio-gas. That's been one that has been accelerating over the last, I'll say 6 months or so, half a year, which is 6 months, and not in a change in behavior around moving to green Hydrogen.
Those who were heading that direction we're already heading that direction a year plus ago and so have stayed the course versus seeing an acceleration of those types of projects. Yet we haven't seen any slowdown on the guest side either.
So I would say generally, not a material impact to date, but I think that the point is valid and we're paying attention to that. For us, it's again playing that molecule agnostic game.
We can serve all of these different applications, and so we're willing to do that. It's just really what is the customer's desire to do so.
Pavel Molchanov
Thank you very much.
Jill Evanko
[Indiscernible]
Operator
Next is Craig Shere from Tuohy Brothers. Your line is now open.
Craig Shere
Hi. Congratulations on another great quarter.
Jill Evanko
Thank you, Craig.
Craig Shere
Just one question for me. It was already asked about your capacity to meet the potential tsunami of Big LNG orders that could be coming in.
But I'm a little more focused on the next 2, 3, 4 years in specialty. I anticipated you might have $1.3 billion in specialty revenue in 2024.
Given where labor markets are and could possibly go, how confident are you that you can execute and deliver on everything the market may need?
Jill Evanko
I'm very confident given the completion of the investments that we laid out on one of the early slides in today's presentation, that's critical to this, because you're absolutely right that the amount of demand ahead of us is incredible. And we talked about this at the Board level around the number one thing that we need to do to just continue this exclusive growth opportunity ahead of us is ensure that we have the capacity to meet this demand.
So it is -- we are entirely. what is it?
All-in, feed-in first on these capacity expansion projects as well as the automation. I would say I'm less concerned on the labor.
Particular point, I'm more concerned that we get the right machinery in the right locations so that we can take, for example, a larger SKID out of a shop that we need another space for another line in i.e., New Prague, Minnesota, where we do some of these particular hydrogen tanks. We also are going to do and are already doing these hydrogen tanks in Teddy, Alabama.
So the pieces and parts that we've laid out, getting them to completion is the number one priority around ensuring we can meet the demand on the specialty side.
Craig Shere
Do you see this as an ongoing process or do you think that your planned investments this year and what you've made more recently, covers a lot of ground? Are you going to have to worry about this the next two, three years?
Jill Evanko
I think that this year and next year, that's why we put the 23 forecast on Capex on Slide 11 of the deck at 47 Marc. And obviously, we're not that good to be that precise.
But I think between what we've done to date and what's laid out on Slide 11 will be in very good shape. And there's other kind of sub-tier projects that are inflate right now, that I'm not going to drag you guys through, but those are also meaningful.
So how do we leverage, for example, taking certain repair and service work out of combined shops and putting it into a Greenfield shop that we already have built. How do we move the pieces and parts around?
So with all of that and the subtext, I feel good about where we'll be after we're completed with the 12 projects on Slide 11.
Craig Shere
Great. Thank you.
Jill Evanko
Thank you.
Operator
[Operator Instructions] Your next question is from the line of Vebs Vaishnav from Coker Palmer. Your line is now open.
Jill Evanko
Hey, Vebs, if you're there, can't hear you. Okay May, I think that Vebs might've had technical error or has dropped off.
So, if there are no further questions in the queue, may we'll conclude the call for today?
Operator
Thank you, ma'am. This concludes today's conference call.
You may all disconnect.