Chemical Industry Carries Nearly $3 Billion of Momentum into New Year

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Researched by Industrial Info Resources (Sugar Land, Texas)--The economic troubles of the last 18 months have pressured many chemical plant owners in the United States and Canada to delay or postpone a significant number of both capital and maintenance projects into the approaching year. The common hope that each plant owner holds is that economies, both domestic and abroad, are improving enough to put a great number of these projects back on the drawing board for 2010. Based on Industrial Info's North American Project Database, there is currently an estimated $3 billion in capital and maintenance projects planned to begin construction in 2010 that were originally planned to begin construction in 2009 or earlier.

Click on image at right for details of planned projects in 2010 that have been delayed from previous years.

Over half of this spending is planned to take place in Texas and Louisiana, the centerpiece of the North American Chemical Processing Industry (CPI). Nearly half of this deferred spending is represented by only a handful of projects, and a further delay or cancellation of even a few of these projects could greatly affect overall Chemical Industry spending in 2010. An example of this includes plans delayed by Westlake Chemical Corporation (NYSE:WLK) (Houston, Texas) for the addition of a new chlor-alkali unit at the Geismar, Louisiana, chemical plant site. This project was originally planned to begin construction in early 2008 and was delayed until 2010 or later, depending on market conditions. Another very sizeable delay includes ADA-ES Incorporated's (Littleton, Colorado) plans to begin construction in the spring of 2008 for a grassroot activated-carbon plant in Underwood, North Dakota. ADA-ES expects construction on this nearly $300 million plant to begin by the fourth quarter of 2010. Despite the delay on this project, ADA-ES did begin construction in late 2008 of its first commercial-scale activated-carbon plant in Coushatta, Louisiana, which is expected to be operational early next year.

The largest amount of delayed spending from a previous year is represented by the industrial gases segment of the CPI, with more than $800 million of delayed spending. This segment of the CPI has performed stronger than virtually every other chemical segment in recent years, largely due to strong demand from petroleum refiners for over-the-fence hydrogen. Across most segments of the CPI, there seems to be renewed optimism and confidence that global demand is beginning to recover, increasing the odds that many of these projects will actually get under way in 2010.

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Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy related markets. For more than 26 years, Industrial Info has provided plant and project opportunity databases, market forecasts, high resolution maps, and daily industry news.