North American Petroleum Refining Industry Seeing Downward Trend in Turnarounds

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Researched by Industrial Info Resources (Sugar Land, Texas)--The number of units scheduled for planned maintenance repairs in the fall for the North American Petroleum Refining Industry has been on a downward trend, marking 2007 as the second consecutive year for declining planned maintenance.

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

Strong profit margins, labor constraints and several major expansions are some of the key reasons for the decrease in turnarounds. A number of multi-billion-dollar expansions are being planned to go into operation between 2008 and 2011. Most of these expansions involve new units, as well as the revamping of existing operational units, so most of the construction work will typically be done at the pre-turnaround stage. For more details, view related October 4, 2007, article - North American Petroleum Refining Industry Could See Five-Fold Increase in Capital Spending in 2008 Compared to 2006. More than likely, a lengthy outage will follow to tie in all of the projects, which will allow for expansion completions — whether it’s an expansion increase or just a modification to a unit. Industrial Info forecasts a decrease of about 22% for the number of units scheduled for planned maintenance repairs for fall 2007 (September-December), compared with the same period last year: 307 in 2006 and 237 for 2007.

Another contributing factor for this year’s downward trend could be because all of the heavy industries are competing for the same laborers, including skilled craftsmen, pipefitters and electricians. Because of this trend, some of the planned turnarounds have been pushed to 2008 or later, as well.

In 2004, the large number of turnarounds, 492, can be linked to the implementation of projects to meet federal and state environmental mandates, including low-sulfur gasoline and ultra-low-sulfur diesel. 2005, which had 592 turnarounds, was an anomaly, which saw an increase in turnarounds. Many refineries on the Gulf Coast had to shut down to repair damage from hurricanes Katrina and Rita.

Industrial Info’s Unit Turnaround Tracking covers 269 refineries and their 1,115 major units, including crude units, FCC & TCC Units, Hydrocrackers and more. The database tracks start and end dates for all turnarounds with monthly updates as schedules change.

Industrial Info Resources (IIR) provides marketing communication services ranging from industrial database solutions to market forecasting, custom analytics, and specialty promotions that support high-level image campaigns.