Planned Maintenance Turnarounds in the North American Petroleum Refining Industry to Decrease by 8% in the Fall of 2006

---

Researched by Industrial Info Resources (Sugar Land, Texas). The number of units scheduled for planned maintenance repairs for the remainder of this year at refineries located in North America is down by 8% as compared to the same period in 2005. This decrease in activity is arguably being attributed to several different events that occurred over the last year.

Click to view Turnaround Activity Comparison by Market Region

Obviously, Hurricanes Katrina and Rita had a major impact to planned turnaround schedules. All of the refineries that were shutdown due to the hurricanes have restarted, except one, BP, which expects to return to normal operations by the end of this year. Another major influence has been the shortage of labor coming from skilled craftsmen such as iron workers, millwrights, pipefitters and electricians. Companies that provide personnel for construction, as well as equipment service providers are having difficulties meeting demand, due to attrition over the past decade and by rising hourly rates. A third factor that may have contributed to the decrease is that there were a significant amount of shutdowns scheduled earlier this year in order for refineries to upgrade process units to produce ultra-low sulfur diesel by the mandated June deadline.

Click to view Turnaround Activity Comparison by Month

There are currently 206 individual unit turnarounds planned for the remaining five months of 2006 compared to that of 222 that occurred during the same period last year. The Southwest region continues to have the highest amount of turnaround activity, as compared to the other regions, due to greatest concentration of refineries located in the area, followed by the West Coast, with 39 units scheduled for planned maintenance overhauls.

One of the largest turnarounds scheduled for this year will occur at BP’s refinery located in California. The $54 million maintenance turnaround will include work on the crude units, a 39,000-barrel per day delayed coker, several hydrotreaters, and associated equipment. This work is scheduled to begin in October.

Economists predict high profit margins for gasoline and diesel fuels will continue for the remainder of the year. The likelihood of several major turnarounds being delayed remains very high at this point, as refining companies evaluate options to increase revenue.

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.