Capital Spending on Delayed Cokers in North America Exceeds $5.3 Billion

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Researched by Industrial Info Resources, Incorporated (Sugar Land, Texas). Capital spending on coker projects is on the rise as petroleum refiners in North America continue to evaluate options to improve profit margins. The main trend driving capital spending is the ability to increase or add bottom-of-the-barrel upgrading, which refers to the refining of heavy residual stream coming from the vacuum unit. As the availability of higher cost sweet crude dwindles, many are opting to change the diet of the refinery to process a less expensive, sour crude slate, mainly imported from Canada, Mexico, South America and Saudi Arabia.

Click image right to view active project breakdown by market region.

Industrial Info is currently tracking 57 delayed and fluid coker projects, representing more than $5.3 billion in total investment value at petroleum refineries in the U.S. and Canada. These projects are scheduled to begin construction in July 2005 and extend out to 2012.

Click on the image to the right to view project breakdown by classification.

A majority of the capital spending is geared to increase production of the coker, either through an expansion or the addition of a new unit. This represents 34 projects with just over $5 billion in total investment value (TIV). The second trend is targeted to improve operator safety and end of campaign life coke drum replacement projects. Manual decoking of a coke drum is highly dangerous to the unit operators, and could be deadly if not performed properly, but the addition of automatic deheading devices and emergency chutes can reduce the risk.

As profit margins continue to rise, more refiners are pushing cokers to their limits, in some cases exceeding design parameters, in order to produce additional refined products. Coking cycles have been reduced to twelve to fourteen hours or less, causing additional stress to the drums. As a result, the life expectancy of a drum will be reduced. A majority of the drums are fabricated overseas, and the long-lead time to order is hovering around 20-24 months.

Coker project activity is up considerably in 2006 when compared to 2005. Industrial Info is currently tracking 57 projects, compared to 43 at last analysis. See July 21, 2005 news article for details - North American Petroleum Refiners Plan Record Number of Delayed Coker Projects.

Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.