Industrial Project Spending Projections for Gulf Coast Reach $250 Billion for Next Five Years

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Researched by Industrial Info Resources (Sugar Land, Texas)--Over the next five to six years, total industrial-related spending for the U.S. Gulf Coast region is projected to reach $257 billion. This figure is exclusive of commercial and residential developments and solely related to industries such as LNG liquefaction, natural gas liquids (NGLs), chemicals and refining. The largest share of the capital is concentrated in LNG liquefaction for export to markets in Europe and, with the expansion of the Panama Canal nearing completion, Asian markets as well.

With U.S. natural gas prices hovering between $3.60 and $3.80 per thousand cubic foot (Mcf), the price differential between natural gas in the U.S. and foreign markets like England, France, Italy, Germany, Japan, China, Taiwan and South Korea make exporting natural gas to these markets a very lucrative proposition.

Oil & gas projects account for 60% of the $257 billion in proposed Gulf Coast spending. The heaviest concentration of spending is proposed along the stretch of coast line from Brownsville, Texas, to Pascagoula, Mississippi, amounting to 270 projects carrying a capital value of more than $150 billion. On this section of coastline, companies such as Cheniere Energy (NYSE:LNG) (Houston), Sempra Energy (NYSE:SRE) (San Diego, California), Exxon Corporation (NYSE:XOM) (Irving, Texas), Freeport LNG Development Company, Trunkline LNG and many others are proposing LNG liquefaction plants with multiple trains. Currently, only Cheniere Energy has begun construction on liquefaction facilities, with two trains totaling 9 million tons per year of LNG, and an additional four trains scheduled for the advanced stages of planning. The majority have existing contracts. The facility will be constructed in Louisiana; where Cheniere has an existing LNG regasification terminal. Completion of the first two trains is planned for late 2014 or early 2015.

Lake Charles, Louisiana, is ground zero for companies planning to construct new LNG liquefaction and export plants, or to convert existing LNG import & regasification terminals into bi-directional facilities. Cheniere Energy, Exxon, Trunkline and Sempra have existing regasification facilities located within 70 miles or so of Lake Charles.

The projects mentioned above do not take into account the proposed LNG liquefaction schemes planned in Alaska, British Columbia or Oregon, or the projects that are planned for the U.S. Atlantic coast. With the low price of natural gas and new discoveries being announced daily, the U.S is poised to become the world's largest exporter of LNG.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and nine 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.