E&C Firm Activity Continues to Increase in the Chemical Processing Industry

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Researched by Industrial Info Resources (Sugar Land, Texas). The number of planned Chemical Processing Industry (CPI) projects for 2007, in which awards or selections for engineering, design and construction services continues to increase sharply. Industrial Info is currently tracking over 72 CPI projects scheduled to begin construction next year that these or related services have been secured at more than 65 unique plant locations across the United States and Canada. These projects currently total nearly $3.5 billion in capital project activity representing an average project total investment value (TIV) of $48.4 million.

Click on the image at right to view a chart showing the breakdown of CPI projects with E&C Firm involved

Over 50 different contractors have been identified as part of this analysis with services ranging from architectural, design engineering and estimating, detailed engineering, procurement and construction management. Companies such as S&B Engineers & Constructors, Limited (Houston, Texas), Jacobs Engineering Group, Incorporated (Pasadena, California), Lockwood Greene, Ford Bacon & Davis, LLC, CH2M Hill, and a few others each show up as being awarded or selected for multiple projects next year. An overwhelming majority of the selected services are for engineering and design at an estimated $2.3 billion of the total. Deign-Build, E+P+C/M or Turnkey selections make up most of the balance at nearly $1 billion.

Geographically, the most significant level of project activity within these 72 projects will be in Texas and Louisiana with roughly 20 projects valued at over $900 million. Projects in North and South Carolina equal another $450 million while Illinois leads as the top individual state thanks to plans by Rentech Energy Midwest Corporation (NYSE:RTK ) (Denver, Colorado) to begin construction next year for its $700 million plans to convert its natural gas-fed fertilizer plant located in East Dubuque, Illinois to coal. WorleyParsons Group, Incorporated (Houston, Texas) and Kiewit Industrial Company (Shawnee Mission, Missouri) are providing support for the project with plans to have a completed cost estimate early next year.

“Considering there are still hundreds of projects planned for next year where design and engineering services are still open combined with the very positive outlook on the CPI, the number projects available to contractors and the value of the projects are certain to increase substantially in the coming months,” commented Trey Hamblet, VP Chemicals Group for Industrial Info. “Another encouraging fact about the projects identified so far is that $800 million of the total activity has already received capital approval,” Mr. Hamblet added. Looking back at projects Industrial Info reported with plans to begin construction in 2006, 113 projects were identified in which a third party firm was selected or hired to execute a project in the United States or Canada.

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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.