Canadian Refining Industry Booming with Over $2.2 Billion in Proposed Capital & Maintenance Spending for 2006

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). As the refining industry nears the completion of a very successful spending year in Canada, it’s time to take a look at what 2006 will have to offer. Currently, the refining industry has over $2.2 billion in the form of 45 capital or maintenance projects in the planning stages for Canada in the coming year.

While this is a significant amount of work for the industry in Canada, it is also a decrease of what has been done in the country in recent years. Spending in both 2004 and 2005 was more substantial, with expenditures of $3.8 billion and $2.8 billion respectively, a fact mostly due to the cyclical nature of the industry. In addition, with oil prices hitting record highs and with hurricane Katrina ravaging the Gulf Coast, the effects of which will be long-reaching for the refining industry, the spending numbers may dramatically increase as companies may boost production to meet the rising demands.

Click on the image at right to view a chart showing the breakdown of industry spending by year

As with most years, the majority of the spending work in Canada is centered in Alberta. The Fort McMurray region, which is rich with oil sands, has proven to be a tremendous boon for the country by not only attracting investments from the refining industry , but also the oil and gas transmission industry and the metals and minerals industry. Among those three industries, billions of dollars are spent annually to develop the region, remove its oil sands from the ground, process them and transport them South where they can be more easily distributed in Canada and the United States.

This is not to say that Alberta is Canada’s only province that will see investment from the refining industry in the coming year. New Brunswick, Ontario and Quebec will also see industry spending in the coming year on maintenance and capital work in their respective provinces.

Click on the image at right to view a table showing the breakdown of 2006 spending by Province.

Some examples of Canada’s refining spending in the coming year will be a proposed $400 million 700-megawatt (MW) combined-cylcle cogeneration addition in New Brunswick, a $50 million crude, two unit expansion in Quebec, a $50 million 50 MW cogeneration addition, and a $30 million refinery maintenance turnaround in Ontario. Alberta will host a $250 million mild hydrocracker unit addition, a $200 million diluent recovery unit addition and a $150 million crude and vacuum unit addition.

When 2006 is finally put behind us, the refining industry will be able to look back on yet another profitable spending year. While the spending numbers will most likely be down from recent years, over $2 billion is nothing to turn your back on.

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