Over $1.2 Billion in New Chemical Project Activity Identified During July in North America

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Researched by Industrial Info Resources (Sugar Land, Texas)--Project activity for the Chemical Processing Industry (CPI) began the second half of 2008 with good momentum in July with more than $1.2 billion in new project activity identified as part of Industrial Info's North American Project Database. The North American CPI has continued to perform strongly this year despite significant increases in operating costs related to transportation, energy and higher feedstock prices.

In addition to new project activity reported last month, another $1.8 billion in previously identified projects was updated and released with new details. Over $1 billion of the total CPI project activity reported in July had been previously approved or funded with another $1.3 billion awaiting approval over the next few months. A third-party contractor, such as an engineering firm; an engineering, procurement and construction management company; or a general contractor, has been identified for at least 30 of these projects already.

Among the largest projects reported last month included plans by BASF SE's (OTC:BASFY) North American affiliate, BASF Corporation (Florham Park, New Jersey), for an estimated $50 million expansion of the Hannibal insecticides plant in Palmyra, Missouri. Koch Nitrogen Company (Wichita, Kansas) has begun structural erection for a nearly $60 million expansion of a urea unit located in its Enid, Oklahoma, plant. Engineering and procurement services are being provided by Pegasus TSI (Tampa, Florida) and construction management by Palmetto Management & Engineering LLC (Greenville, South Carolina). Another major project also located in the central U.S. that was updated last month is Midwest Chlor-Alkali LLC's (Indianapolis, Indiana) plan for the construction of a grassroot chlor-alkali plant to be located in Eddyville, Iowa. Permit approvals for the estimated $140 million project are expected soon, and a design-build firm has been selected to construct the project, which is expected to be in the field late this year.

The cost of crude oil and natural gas has begun to recede slightly in recent weeks with expectations that this trend might continue in the coming months. As politics of the presidential election year begin to dominate the news headlines, decisions on major projects could be postponed. This could mean we will see fewer projects be funded or approved in the latter half of this year. This potential slowdown in project approvals should not be interpreted as a loss of confidence in the industry. The slowdown is a natural effect that has been seen previously in major election years.

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