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Researched by Industrial Info Resources (Sugar Land, Texas)--Industrial Info, as part of its Global Market Intelligence (GMI) platform, is tracking more than $2.1 billion in Texas Oil & Gas projects that have been affected by the COVID-19 pandemic and the downturn in oil prices. Industries include Oil & Gas Production, Terminals and Pipelines, with the production sector accounting for more than $1 billion in projects. The $2.1 billion is merely a starting point in the amount of affected projects, as several exploration and production companies such as Chevron Corporation (NYSE:CVX) (San Ramon, California) have announced that they will curtail their overall drilling programs in the Permian Basin, and companies such as Occidental Petroleum Corporation (NYSE:OXY) (Houston, Texas) are wiping billions of dollars from their production slates for the year. As Industrial Info's research staff continues its work, the number of affected projects will almost certainly grow.
In the Federal Reserve Bank of Dallas' recent Dallas Fed Energy Survey, released Wednesday, the Fed noted that the index for capital expenditures dropped from 9.1 in the fourth quarter to -49.0 in first-quarter 2020, indicating a reduction in capital spending among exploration and production (E&P) firms. Spending doesn't seem set to rise anytime soon. According to the Fed, "The index for the expected level of capital expenditures next year plummeted from 0.9 in the fourth quarter to -61.9 in the first quarter, indicating E&P firms also slashed expectations for capital spending next year."
Other indexes also indicated a contraction in activity. The equipment utilization index fell from -25.8 in the fourth quarter to -47.2 in the first quarter, suggesting an accelerating contraction in equipment utilization. The company outlook index plunged 77 points to -75.0 in the first quarter, indicating an extremely pessimistic outlook. In addition, 79% of surveyed firms reported greater uncertainty regarding firms' outlooks on the future.
Meanwhile, according to news media reports, the Trump administration is pressing Saudi Arabia to not increase its oil production to a record 12.3 million barrels per day (BBL/d) next month. On Wednesday, U.S. Secretary of State Mike Pompeo spoke with Saudi Arabia's Crown Prince Mohammed bin Salman on the eve of a conference call between G20 leaders regarding the COVID-19 pandemic and its economic fallout. "The secretary stressed that as a leader of the G20 and an important energy leader, Saudi Arabia has a real opportunity to rise to the occasion and reassure global energy and financial markets when the world faces serious economic uncertainty," the State Department said on Wednesday.
According to EnergyNow Media, Saudi Arabia currently has no intention of changing its plans, as it believes that only a collective output cut, rather than one solely from the kingdom, can help turn the market around.
In addition to Chevron and Occidental, both of whom announced a reduction in capital spending this week, one of the biggest blows to Texas project activity comes from Phillips 66 (NYSE:PSX) (Houston), which announced the deferment of major projects, some of which are in Texas. The largest of these is the Red Oak crude oil pipeline, which will transport oil from Cushing, Oklahoma, and the Permian to multiple locations on the Texas Gulf Coast. Construction on the pipeline was planned to begin this summer, with completion slated for the first half of next year. The project has been deferred, and Phillips 66 gave no indication of a potential timeline. Click here for a list of related projects.
Another Texas Phillips 66 project that has been placed on hold indefinitely is Fractionator 4 at the company's Sweeny Hub in Old Ocean, Texas. Fractionators 2 and 3 at the facility are under construction, each of which will add 150,000 BBL/d of natural gas liquids (NGL) fractionation capacity. Both are on track to be completed later this year. Construction on a fourth fractionator was planned to begin later this year, for completion in 2021, but has now been deferred for an indefinite period. For more information, see Industrial Info's project reports on Frac 2, Frac 3 and Frac 4.
Other fractionators placed on hold because of the COVID-19 pandemic include Enterprise Products Partners LP's (NYSE:EPD) (Houston) planned fractionators 11 and 12 at its complex in Mont Belvieu, Texas. Each fractionator would add 150,000 BBL/d of capacity, to bring total plant capacity to 1.25 million BBL/d. Both fractionators were already under construction. Construction of Frac 11 began in early 2019, and it was on track to be in service this summer. Construction on Frac 12 began in summer 2019, and it was planned to be completed in early 2021. S&B Engineers and Constructors Limited (Houston) was the engineering, procurement and construction contractor for both projects. For more information, see Industrial Info's project reports on Frac 11 and Frac 12.
Pipeline projects that have been frozen due to poor market conditions include ONEOK Incorporated's (NYSE:OKE) (Tulsa, Oklahoma) expansion of its liquefied petroleum gas (LPG) pipeline system, which runs from the Permian Basin to the Houston area. The $310 million project entailed installing a series of electric motor-driven pump packages along the pipeline to increase capacity by 100,000 BBL/d. Construction was supposed to begin this summer, taking a little more than a year to complete. For more information, see Industrial Info's project report.
Among the terminals projects that have been affected by the market downturn and COVID-19 is Motiva Enterprises LLC's (Houston) planned crude oil storage addition in Port Neches, Texas, which has been delayed. The project calls for the construction of three 600,000-barrel tanks with external floating roofs to bring the facility's total storage capacity to 4.485 million barrels. Smith Tank & Steel (Gonzales, Louisiana) is the general contractor on the project. For more information, see Industrial Info's project report.
Unfortunately, these Texas projects are just the tip of the iceberg. Industrial Info's research staff has so far uncovered more than $35.8 billion of Oil & Gas projects that have been affected by the market downturn and virus. Click here for a list of affected projects throughout the world (filtered by your subscription).
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
In the Federal Reserve Bank of Dallas' recent Dallas Fed Energy Survey, released Wednesday, the Fed noted that the index for capital expenditures dropped from 9.1 in the fourth quarter to -49.0 in first-quarter 2020, indicating a reduction in capital spending among exploration and production (E&P) firms. Spending doesn't seem set to rise anytime soon. According to the Fed, "The index for the expected level of capital expenditures next year plummeted from 0.9 in the fourth quarter to -61.9 in the first quarter, indicating E&P firms also slashed expectations for capital spending next year."
Other indexes also indicated a contraction in activity. The equipment utilization index fell from -25.8 in the fourth quarter to -47.2 in the first quarter, suggesting an accelerating contraction in equipment utilization. The company outlook index plunged 77 points to -75.0 in the first quarter, indicating an extremely pessimistic outlook. In addition, 79% of surveyed firms reported greater uncertainty regarding firms' outlooks on the future.
Meanwhile, according to news media reports, the Trump administration is pressing Saudi Arabia to not increase its oil production to a record 12.3 million barrels per day (BBL/d) next month. On Wednesday, U.S. Secretary of State Mike Pompeo spoke with Saudi Arabia's Crown Prince Mohammed bin Salman on the eve of a conference call between G20 leaders regarding the COVID-19 pandemic and its economic fallout. "The secretary stressed that as a leader of the G20 and an important energy leader, Saudi Arabia has a real opportunity to rise to the occasion and reassure global energy and financial markets when the world faces serious economic uncertainty," the State Department said on Wednesday.
According to EnergyNow Media, Saudi Arabia currently has no intention of changing its plans, as it believes that only a collective output cut, rather than one solely from the kingdom, can help turn the market around.
In addition to Chevron and Occidental, both of whom announced a reduction in capital spending this week, one of the biggest blows to Texas project activity comes from Phillips 66 (NYSE:PSX) (Houston), which announced the deferment of major projects, some of which are in Texas. The largest of these is the Red Oak crude oil pipeline, which will transport oil from Cushing, Oklahoma, and the Permian to multiple locations on the Texas Gulf Coast. Construction on the pipeline was planned to begin this summer, with completion slated for the first half of next year. The project has been deferred, and Phillips 66 gave no indication of a potential timeline. Click here for a list of related projects.
Another Texas Phillips 66 project that has been placed on hold indefinitely is Fractionator 4 at the company's Sweeny Hub in Old Ocean, Texas. Fractionators 2 and 3 at the facility are under construction, each of which will add 150,000 BBL/d of natural gas liquids (NGL) fractionation capacity. Both are on track to be completed later this year. Construction on a fourth fractionator was planned to begin later this year, for completion in 2021, but has now been deferred for an indefinite period. For more information, see Industrial Info's project reports on Frac 2, Frac 3 and Frac 4.
Other fractionators placed on hold because of the COVID-19 pandemic include Enterprise Products Partners LP's (NYSE:EPD) (Houston) planned fractionators 11 and 12 at its complex in Mont Belvieu, Texas. Each fractionator would add 150,000 BBL/d of capacity, to bring total plant capacity to 1.25 million BBL/d. Both fractionators were already under construction. Construction of Frac 11 began in early 2019, and it was on track to be in service this summer. Construction on Frac 12 began in summer 2019, and it was planned to be completed in early 2021. S&B Engineers and Constructors Limited (Houston) was the engineering, procurement and construction contractor for both projects. For more information, see Industrial Info's project reports on Frac 11 and Frac 12.
Pipeline projects that have been frozen due to poor market conditions include ONEOK Incorporated's (NYSE:OKE) (Tulsa, Oklahoma) expansion of its liquefied petroleum gas (LPG) pipeline system, which runs from the Permian Basin to the Houston area. The $310 million project entailed installing a series of electric motor-driven pump packages along the pipeline to increase capacity by 100,000 BBL/d. Construction was supposed to begin this summer, taking a little more than a year to complete. For more information, see Industrial Info's project report.
Among the terminals projects that have been affected by the market downturn and COVID-19 is Motiva Enterprises LLC's (Houston) planned crude oil storage addition in Port Neches, Texas, which has been delayed. The project calls for the construction of three 600,000-barrel tanks with external floating roofs to bring the facility's total storage capacity to 4.485 million barrels. Smith Tank & Steel (Gonzales, Louisiana) is the general contractor on the project. For more information, see Industrial Info's project report.
Unfortunately, these Texas projects are just the tip of the iceberg. Industrial Info's research staff has so far uncovered more than $35.8 billion of Oil & Gas projects that have been affected by the market downturn and virus. Click here for a list of affected projects throughout the world (filtered by your subscription).
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.
