Energy Concerns Drive an Increase in Boiler Additions and Replacements in the Chemical Processing Industry

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Researched by Industrial Info Resources (Sugar Land, Texas). Industrial Info is currently tracking just over $80 million in capital projects planned to either replace existing process steam boilers or add new steam capacity at Chemical Processing Industry (CPI) plant locations in the United States and Canada over the next two years. These projects come after many of the larger petrochemical and CPI plants performed numerous boiler and process steam projects during the last several years, as part of NOx and emission reduction projects. The increased focus on efficiency and reliability by most of the industry continues to drive this spending trend as the cost of energy feedstock remains high.

Click on the image at right to view a pie chart showing the breakdown of CPI boiler projects by project status.

The majority of future capital will target boiler replacements of aged equipment that cannot be upgraded to an efficient and cost effective operational level in comparison to newer technology. Roughly, 10% of the spending will be invested in waste heat boiler additions to capture a heat source within an existing process in order to generate additional process steam for captive use.

While expenditures for boiler projects averages around $2 million each, two projects in particular greatly exceed this trend. For one, Cognis Oleochemicals LLC (Cincinnati, Ohio) is awaiting final permit approval for the installation of up to four new natural gas and oil fired boilers that will replace two thirty year old coal-fired boilers. Cognis has hired a turn-key contractor for this estimated $30 million project and is hopeful construction will begin late this summer, with a startup planned for spring 2007. Kraton Polymers LLC (Belpre, Ohio) is in the early phases of studying the potential replacement of two large forty-year-old coal-fired boilers at its plant location in Belpre, Ohio. The replacement of these units would most likely entail new coal-fired units, which offer a greatly reduced emission rate and increased operating efficiency.

As the CPI continues its quest to remain competitive in a market where the cost of fuel, transportation, and raw material feedstock continues to rise, capital budgets will increasingly include expenditures aimed at cost savings. Cheaper energy, process steam and equipment reliability will play a key role in succeeding at the bottom line.

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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.