Planned North American Chemical Industry E&C Activity in 2009 Remains Steady So Far

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Researched by Industrial Info Resources (Sugar Land, Texas)--Industrial Info is currently tracking more than $4 billion in capital and maintenance project activity in the North American Chemical Processing Industry (CPI) planned or scheduled to begin construction in 2009. These projects have already secured design, engineering, procurement or construction services. Even as announcements of project delays and plant-capacity curtailments seem to have become regular news in today's market, the number and value of projects identified as being under contract or having secured E&C services have increased compared to this same time last year. In December 2007 this same analysis was completed for 2008, identifying 120 projects valued at $3.8 billion.

There are more than 150 individual projects planned to begin construction next year with E&C services selected or contracted with values ranging from more than $1 million to $1 billion each. This increase in E&C activity is thought by some to be the result of plant and project owners seeking third-party help to more cost-effectively design, manage and execute project activity. As CPI markets across the globe continue to experience a slump in demand, the ability to incrementally increase capacity or execute large expansions with the most cost-effective labor is a growing requirement. Fewer CPI companies can afford to maintain large internal engineering, design and project management teams for the execution of large projects.

Of the more than $4 billion in project activity of this type identified for next year, an estimated $2.7 billion in capital projects has already been funded or approved and is in some advanced phase of engineering and presumably nearing the construction phase. About $158 million in capital projects is pending approval while just more than $370 million represents planned unit or plant maintenance turnarounds in which on-site or alliance contractors are used. The remaining $1.1 billion is in the form of capital projects in some phase of early planning, design or estimating with expectations of developing quickly enough to begin construction during 2009.

Geographically it is not surprising that Texas and Louisiana account for the majority of this planned activity with more than $2.8 billion in total investments. These states are home to some of North America's largest petrochemical complexes serving the United States' largest refined-products terminals and network of integrated refineries.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.