By Monica Houston-Waesch

FRANKFURT--German industrial gases group Linde AG will build an air separation unit in eastern Germany, supplying ArcelorMittal with oxygen and nitrogen for its steel plant in Eisenhuettenstadt.

The project, costing around 85 million euros ($107 million), will also supply liquid gases to the regional market and replaces an older facility. Linde's engineering division will build the plant, while its gas unit LiGaPro will operate the plant after completion.

"This major on-site project builds on our long-standing and successful partnership with ArcelorMittal," Linde board member Aldo Belloni said.

By combining gaseous and liquid production streams, the plant will increase energy efficiency, Linde said.

Write to Monica Houston-Waesch at Nikki.houston@wsj.com

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