Houston Abounds with Refinery, Petchem Projects Despite Weakened Economy

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Researched by Industrial Info Resources (Sugar Land, Texas)--A newly released survey indicates the economy in Houston, Texas, has weakened for the 10th month in a row. With its massive array of refineries, terminals and petrochemical plants, the U.S. energy hub has been hard hit by the collapse of oil and gas prices. Still, Houston and the surrounding Harris County are home to 364 active projects being tracked by Industrial Info, with a combined worth of $31.66 billion. Significantly, construction is under way on nearly two-thirds of those projects, with a combined value of $10.4 billion.

Houston's economy weakened again in October, according to the latest survey of supply chain managers. The survey data is used for the Houston Purchasing Managers Index (PMI), which registered 48% last month. The index has a range of 0 to 100, and readings below 50% generally indicated production will contract in the near future, according to ISM-Houston, an affiliate of the Institute for Supply Management (Tempe, Arizona).

Job losses in Houston eased in October, according to ISM-Houston, but further erosion was seen in sales, production and purchases. Most of the decline was seen in businesses tied to oil exploration and production, which in turn has impacted durable goods manufacturing and wholesale trade. Among the oil and gas exploration sector, capital and operating expenses continued to fall. The health care segment was the big exception to the trend, as it continued to show strength.

Despite those sobering trends, industrial projects still abound in Houston and the surrounding region. The top 10 Harris County projects being tracked by Industrial Info are tied to oil and gas.

Topping the list are two projects, each valued at $2.5 billion.

Construction is well under way on the ethane cracker addition at Chevron Phillips Chemical Company LLC's (The Woodlands, Texas) Cedar Bayou complex in Baytown, Texas. Working with JGC Corporation (Yokohama, Japan), Fluor Corporation (NYSE:FLR) (Irving, Texas) and WT Byler Company (Houston), Chevron Phillips expects construction to continue through second-quarter 2017. The cracker will produce 3.3 billion pounds of ethylene per year. Chevron Phillips is a 50:50 joint venture by Chevron Corporation (NYSE:CVX) (San Ramon, California) and Phillips 66 (NYSE:PSX) (Houston).

Not to be outdone, Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) hopes to finish a 3 billion-pound-per-year ethylene unit addition at its Baytown olefins complex in first-quarter 2017. Civil construction kicked off in third-quarter 2014. Project contractors include Linde Group (Munich, Germany), Bechtel Corporation (San Francisco, California) and Mustang Engineering (Houston).

. Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.