Capital and Maintenance Spending in Gulf Coast Region Will Remain Robust in 2007

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Researched by Industrial Info Resources (Sugar Land, Texas). Some of the largest industrial projects that begin construction each year traditionally take place in the coastal regions of Texas, Louisiana, Alabama and Florida, commonly referred to as the Gulf Coast region of the United States. Looking ahead into 2007, this year doesn’t appear to be an exception with more than $26 billion in total spending from about 550 projects that have been identified to begin construction this year across twelve different industries. A significant portion of this activity is made up of projects that were originally planned to begin construction in a prior year. These projects make up an estimated $2.9 billion of the total project activity planned for this year.

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

Currently, $2.8 billion of the capital spending has been approved and some phase of engineering or execution is underway. Another $7.9 billion is in an advanced phase of planning with the expectation of permit or board approval in the near future to allow for construction to begin this year. Together, these 131 individual projects total an impressive 24% of the activity.

The construction of multiple grassroot LNG receiving terminals and the proposal for more than one coal or petroleum coke gasification plants in the region will dominate potential spending this year. At least $10.9 billion is earmarked for these projects, nearly 41% of the total spending in the region during 2007. The demand for these projects is largely driven by our demand for natural gas and clean burning fuels for both industrial and consumer uses. The downstream effect these huge projects have is tremendous and supports the growth of the power, petrochemical and other industries that largely depend on natural gas to remain competitive.

An industry that has the potential for a standout year is Pulp, Paper and Wood. Although, its project activity is limited to a few large projects, progress is being made for a couple of large projects including a tissue machine addition in Alabama and a large machine conversion in Florida. The Chemical Processing Industry (CPI) will fall in fifth place for overall spending, although the level of project activity far exceeds all other industries in the region with 177 projects currently identified. This is almost twice the level of project activity of its closest follower, the Petroleum Refining Industry with 95 projects currently identified. The Gulf Coast region is home to some of North America’s largest and most sophisticated chemical plants and refineries consistently ranking them among the region’s top spenders year after year.

Industrial Info's Gulf Coast Online Plant Directory provides management contacts, addresses, and phone numbers for 2,481 major operational industrial plants on the Gulf Coast.

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