Industrial Market Outlook: Uptick in Refinery Maintenance Turnarounds Seen for 2017

Researched by Industrial Info Resources (Sugar Land, Texas)--North American refinery turnaround activity will increase this year as operators begin to catch up on maintenance schedules, according to one of the presenters at Industrial Info's 2017 Industrial Market Outlook in Houston, Texas.

Chris Paschall, Vice President of Global Research, Oil & Gas and Petroleum Refining Industries, said refinery maintenance spending has been down during the past two years in terms of the units involved, as well as expenditures. He noted this came at a time when refining utilization rates were very high--96-97%--as refiners sought to process as much as they could to take advantage of high margins.

"I think there is a break in the clouds here in terms of maintenance opportunity," he said. "We are really thinking this will be the year maintenance turnarounds will start to increase."

Turnaround spending by the North American refining industry as tracked by Industrial Info has been about $1.5 billion a year for the past two years, he said. Spending for 2017 could increase to $1.7 billion. Less refining units will undergo major maintenance turnaround activity this year, which suggests "there are larger units going down in 2017, the spend is going to be greater and we are going to see more activity in 2017."

Due to its high concentration of refineries and plants, maintenance spending will be greatest in the Southwest Region, with more than 100 projects worth more than $600 million.

Refiners will gear non-maintenance capital spending programs this year to optimization and reliability projects, Paschall said.

Also, chances are good that at least two grassroot refinery projects could progress in the near future, including the 55,000 barrel-per-day (BBL/d) Davis refinery in North Dakota by Meridian Energy Group (Irvine, California), and the 50,000 BBL/d Freer crude oil refinery in Texas by Raven Petroleum LLC (The Woodlands, Texas).

Much of the 2017 Industrial Market Outlook event in Houston focused on the wave of optimism among several industries that has been sparked by the election of U.S. President Donald Trump. For related information, see January 19, 2017, article - Industrial Market in Review: Trump Bump to Bolster Capital Spending in 2017.

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