Forecast Maintenance Turnaround Activity for Gulf Coast Region Remains Flat Although Spending Increases by 28%

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Researched by Industrial Info Resources (Sugar Land, Texas). At this time last year, Industrial Info was tracking just over 50 maintenance turnarounds scheduled to take place during the last quarter of 2005 along the United States’ Gulf Coast region. Similar activity in the number of planned turnarounds has been identified for the fourth quarter of 2006, although the value of these maintenance turnarounds increased substantially. The total investment value (TIV) of turnaround projects during this period last year totaled $215 million compared to over $300 million forecast for 2006, an increase of 28%. See related Industry Alert titled: Fourth Quarter 2005 Maintenance Spending Along the Gulf Coast Region Forecast to Increase by 26% When Compared to 2004.

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

Currently, Industrial Info is tracking 53 individual planned maintenance turnarounds planned to kick off in the Gulf Coast during the fourth quarter spread across six different industries including Chemical Processing, Power, Petroleum Refining, Metals & Minerals, Food & Beverage and Pulp, Paper & Wood. Another seven turnarounds originally reported to begin this fall have been rescheduled, four of which already took place earlier this year and the remaining three moved out to the first quarter of 2007. The Chemical Processing Industry (CPI) will represent the largest number of turnarounds during the fourth quarter at 27 turnarounds valued at an estimated $99 million while Petroleum Refiners will lead spending at nearly $137 million from just nine major planned turnarounds. An overwhelming majority of the activity for these two industries will take place in Texas and Louisiana, where these two industries combined represent the largest number of operational plants in the region just ahead of the Industrial Manufacturing Industry.

The most significant planned CPI turnaround is expected by Lyondell Chemical Company (Houston, Texas) at its Channelview, Texas CVO South plant for the propylene oxide styrene monomer (POSM) unit No. 1 in October. Chalmette Refining, LLC (Chalmette, Louisiana) will perform a nearly four-week planned turnaround for a portion of its Chalmette site beginning in October at an estimated cost of over $35 million.

Owners of industrial plants in the Gulf Coast region have had the good fortune of a very quiet tropical storm and hurricane season in the region helping to keep many planned turnarounds on schedule. The last quarter of the year is traditionally a period when planned turnaround activity peeks with the passing of the summer heat and the cooling of related summer time energy costs. Activity for maintenance turnarounds in the Gulf Coast has continued to increase in recent years and setting expectations by most equipment and service providers to count on it in future.

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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.