E&C Selections Continue to Rise as the Year Rolls out for the Chemical Processing Industry

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Researched by Industrial Info Resources (Sugar Land, Texas). As the year continues to develop so do the number of capital and maintenance projects in the chemical processing industry (CPI) where E&C firms and major contractors have been identified, selected or awarded. Industrial Info is currently tracking over 125 projects where contractors have been identified with plans for construction to begin this year, representing a total investment value of over $3.4 billion. This equals approximately 17% of the total CPI project activity currently being tracked for 2007 as part of the North American Project Database .

Click on the image at right to view a chart showing the breakdown of projects by market region.

Contract services for these projects range from engineering only, engineering & construction combined, design-build, architectural and many others. Engineering services have been identified for over 50 of these projects representing the majority of the spending at $2.2 billion, nearly 20 of the projects have chosen combined E&C services with project values of $674 million, and 11 have selected design-build services equaling over $379 million in total spending. Over $1.4 billion of these projects have already been approved and another 20 projects totaling $588 million are in some advanced phase of planning and pending approval.

This analysis of contractor selections for 2007 reveals a substantial increase in contractor selections compared to what was originally reported at the close last year when 72 projects had been identified according to the December 19, 2006 article -E&C Firm Activity Continues to Increase in the Chemical Processing Industry.

Producers of petrochemicals, plastics and resins represented the largest number of project opportunities from these 126 projects equaling nearly 40% of the project activity and over $700 million in total spending. Although substantially fewer projects, producers of industrial gases, inorganic chemicals, and acids represented an estimated 33 projects or 26% of the project activity with combined spending totaling more than $1.5 billion. This substantial lead is largely due to plans by Rentech Energy Midwest Corporation (Denver, Colorado) (AMEX:RTK ) to begin construction this year for its $700 million project to convert its natural gas-fed fertilizer plant located in East Dubuque, Illinois to coal. Progress for this project appears to be moving along swiftly with early design and engineering support being provided by WorleyParsons Group, Incorporated (Houston, Texas) and Kiewit Industrial Company (Shawnee Mission, Missouri).

The Southwestern and Great Lakes Regions hold a majority of all the activity and total spending as they traditionally do. The Southwest due to its population of large petrochemical plants its close proximity major Gulf ports. The Great Lakes is home to many of the largest specialty chemical plants including resins and plastics serving the automotive markets. These two regions combined are home to over $2 billion of the projects reviewed in this analysis and over half of the total project activity.

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