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Released July 27, 2020 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Honeywell International (NYSE:HON) (Morris Plains, New Jersey) is the latest big-ticket service and technology provider to feel the economic shock from the COVID-19 pandemic. The company saw overall sales for the second quarter decline 19% when compared with the same period last year, with its aerospace and energy businesses down 27% and 17%, respectively. Industrial Info is tracking about $28 billion in active projects involving Honeywell, including nearly $19 billion worth that have been delayed or otherwise affected by COVID-19.
Click on the image at right for a graph detailing Honeywell's active global projects, by industrial sector.
Honeywell's aerospace segment was battered by significantly weaker demand for commercial aftermarket, following a nearly 90% decline in year-over-year U.S. commercial air travel, and ongoing problems associated with Boeing Company's (NYSE:BA) (Chicago, Illinois) 737 MAX. Although Honeywell's Performance Materials and Technologies segment, which covers much of its energy-related business, also saw steep declines, executives noted that the company had experienced few project cancellations in the quarter.
Indeed, Honeywell is still part of many big-ticket projects across the U.S. that have seen their construction start and/or completion dates pushed back, but have not been canceled. These include Vaquero Midstream's (The Woodlands, Texas) $150 million third train at its cryogenic natural gas-processing plant in Coyanosa, Texas, which sits at the heart of the Permian Basin. The project was in its earliest construction stage when the outbreak began to hit the U.S., and work has been postponed until January 2021 at the earliest.
The same site's estimated $150 million Train IV was slated to begin construction following the third train's originally scheduled completion in early 2021, but this has been pushed back by a full year. Honeywell's UOP Russell subsidiary is providing key technological components for both trains. For more information, see Industrial Info's project reports on Train III and Train IV.
Honeywell also remains attached to DCP Midstream Partners LP's (NYSE:DCP) (Denver, Colorado) plans to add four natural gas-processing trains at its Bighorn processing plant in La Salle, Colorado. Each train is expected to process 200 million standard cubic feet per day of gas from the Denver-Julesburg Basin, bringing the site's full capacity to 1 billion standard cubic feet per day. Honeywell's UOP Russell subsidiary is slated to perform design-engineering services for the project, all of which now are on hold with construction kickoff dates not yet determined. For more information, see Industrial Info's project reports on Train II, Train III, Train IV and Train V.
In Canada, Honeywell is serving as technology provider on Inter Pipeline Limited's (TSX:IPL) (Calgary, Alberta) estimated $1.64 billion propane dehydrogenation (PDH) plant at its Heartland Petrochemical Complex near Fort Saskatchewan, Alberta. Construction began in early 2018 and still is set to wrap up at the end of 2021, but Inter Pipeline recently acknowledged that precautions related to COVID-19 forced them to rearrange labor schedules and increase spending related to the project. A company spokesperson recently told Fort Sask Online that "we've been able to keep everybody coming to the site, collecting a paycheck, supporting their families" since the outbreak. For more information, see Industrial Info's project report.
Alberta slid into a recession in 2019 as commodity prices began to weaken, and the pandemic has only worsened the province's economic outlook. Recent findings from Statistics Canada show the resource-rich Alberta, Saskatchewan and Northwest Territories experienced contractions in 2019, whereas Canada's overall growth rate was 1.7%; output from Alberta's oil and gas drilling and field services sector plummeted by 22.2%, according to CBC News. Alberta's government sees its petrochemical sector as a potential lifeline and is planning to incentivize project development through a 10-year grant program; for more information, see July 17, 2020, article - Canada's Alberta Province Working on Grant Program to Entice New Petchem Development.
The largest project in Canada involving Honeywell is Pieridae Energy Limited's (Halifax, Nova Scotia) two-phase, 10 million-metric-ton-per-year Goldboro LNG Production Plant in Stormont, Nova Scotia, for which Honeywell is providing control systems. Although the front-end engineering and design is complete and environmental and construction permits have been received, Pieridae has pushed back its final investment decision until next summer. Click here for a list of Goldboro projects involving Honeywell, including a pair of natural gas-fired power units and an liquefied natural gas (LNG) pretreatment unit.
The LNG market has proven particularly tough for energy companies and their service providers so far this year. KBR Incorporated (NYSE:KBR) (Houston, Texas) recently announced it would exit most of its LNG projects, including the Goldboro complex, on which it had been contracted for design-engineering services. For more information, see June 25, 2020, article - KBR Walks Away from Rapidly Weakening LNG Market.
Honeywell is facing similar setbacks overseas. The Middle East-North Africa region has provided the company with a bevy of contract work in recent years, but Kuwait Integrated Petroleum Industries Company (KIPIC) (Safat, Kuwait) recently pushed back the construction kickoff for its multi-phase Mina Al Zour Petrochemical Refinery Integration ("PRIZE") project in southern Kuwait by almost a year, to first-quarter 2022. KIPIC selected a Honeywell subsidiary to provide front-end engineering design and advanced process control technology to several major phases of the project, including the:
Click on the image at right for a graph detailing Honeywell's active global projects, by industrial sector.Honeywell's aerospace segment was battered by significantly weaker demand for commercial aftermarket, following a nearly 90% decline in year-over-year U.S. commercial air travel, and ongoing problems associated with Boeing Company's (NYSE:BA) (Chicago, Illinois) 737 MAX. Although Honeywell's Performance Materials and Technologies segment, which covers much of its energy-related business, also saw steep declines, executives noted that the company had experienced few project cancellations in the quarter.
Indeed, Honeywell is still part of many big-ticket projects across the U.S. that have seen their construction start and/or completion dates pushed back, but have not been canceled. These include Vaquero Midstream's (The Woodlands, Texas) $150 million third train at its cryogenic natural gas-processing plant in Coyanosa, Texas, which sits at the heart of the Permian Basin. The project was in its earliest construction stage when the outbreak began to hit the U.S., and work has been postponed until January 2021 at the earliest.
The same site's estimated $150 million Train IV was slated to begin construction following the third train's originally scheduled completion in early 2021, but this has been pushed back by a full year. Honeywell's UOP Russell subsidiary is providing key technological components for both trains. For more information, see Industrial Info's project reports on Train III and Train IV.
Honeywell also remains attached to DCP Midstream Partners LP's (NYSE:DCP) (Denver, Colorado) plans to add four natural gas-processing trains at its Bighorn processing plant in La Salle, Colorado. Each train is expected to process 200 million standard cubic feet per day of gas from the Denver-Julesburg Basin, bringing the site's full capacity to 1 billion standard cubic feet per day. Honeywell's UOP Russell subsidiary is slated to perform design-engineering services for the project, all of which now are on hold with construction kickoff dates not yet determined. For more information, see Industrial Info's project reports on Train II, Train III, Train IV and Train V.
In Canada, Honeywell is serving as technology provider on Inter Pipeline Limited's (TSX:IPL) (Calgary, Alberta) estimated $1.64 billion propane dehydrogenation (PDH) plant at its Heartland Petrochemical Complex near Fort Saskatchewan, Alberta. Construction began in early 2018 and still is set to wrap up at the end of 2021, but Inter Pipeline recently acknowledged that precautions related to COVID-19 forced them to rearrange labor schedules and increase spending related to the project. A company spokesperson recently told Fort Sask Online that "we've been able to keep everybody coming to the site, collecting a paycheck, supporting their families" since the outbreak. For more information, see Industrial Info's project report.
Alberta slid into a recession in 2019 as commodity prices began to weaken, and the pandemic has only worsened the province's economic outlook. Recent findings from Statistics Canada show the resource-rich Alberta, Saskatchewan and Northwest Territories experienced contractions in 2019, whereas Canada's overall growth rate was 1.7%; output from Alberta's oil and gas drilling and field services sector plummeted by 22.2%, according to CBC News. Alberta's government sees its petrochemical sector as a potential lifeline and is planning to incentivize project development through a 10-year grant program; for more information, see July 17, 2020, article - Canada's Alberta Province Working on Grant Program to Entice New Petchem Development.
The largest project in Canada involving Honeywell is Pieridae Energy Limited's (Halifax, Nova Scotia) two-phase, 10 million-metric-ton-per-year Goldboro LNG Production Plant in Stormont, Nova Scotia, for which Honeywell is providing control systems. Although the front-end engineering and design is complete and environmental and construction permits have been received, Pieridae has pushed back its final investment decision until next summer. Click here for a list of Goldboro projects involving Honeywell, including a pair of natural gas-fired power units and an liquefied natural gas (LNG) pretreatment unit.
The LNG market has proven particularly tough for energy companies and their service providers so far this year. KBR Incorporated (NYSE:KBR) (Houston, Texas) recently announced it would exit most of its LNG projects, including the Goldboro complex, on which it had been contracted for design-engineering services. For more information, see June 25, 2020, article - KBR Walks Away from Rapidly Weakening LNG Market.
Honeywell is facing similar setbacks overseas. The Middle East-North Africa region has provided the company with a bevy of contract work in recent years, but Kuwait Integrated Petroleum Industries Company (KIPIC) (Safat, Kuwait) recently pushed back the construction kickoff for its multi-phase Mina Al Zour Petrochemical Refinery Integration ("PRIZE") project in southern Kuwait by almost a year, to first-quarter 2022. KIPIC selected a Honeywell subsidiary to provide front-end engineering design and advanced process control technology to several major phases of the project, including the:
- estimated $600 million PDH unit; see project report
- estimated $600 million residue fluid catalytic cracking unit (RFCCU); see project report
- estimated $400 million paraxylene unit; see project report
- estimated $200 million reformer unit; see project report
