Spending for Canadian Chemical Processing Projects to Increase Sharply in 2005

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Even though, the Chemical Processing Industry (CPI) is not the largest industry segment in Canada, it is expected to represent nearly a billion dollars in total capital and maintenance projects during 2005. This is a sharp increase over 2004 with current projections showing the industry closing with an estimated $580 million for the year. This increase of nearly 100% is quite impressive, considering there are less than 450 operational CPI plants in all of Canada.

Click on the image at right to view a regional breakdown of Canadian CPI projects planned to begin construction in 2005.

Comparing some of the largest planned CPI projects for 2004 and 2005, Air Products and Chemicals Incorporated (APCI) (NYSE:APD ) (Allentown, Pennsylvania) shows up as one of the top spenders both years. APCI plans to begin structural erection this month for its planned grassroot hydrogen plant in Edmonton, Alberta. See related Industry Alert titled: Air Products Nears Mechanical Construction Kick-Off for Grassroot Hydrogen Plant in Alberta. Early next year APCI plans to begin construction of a new hydrogen plant on the site of Shell Canada Product's petroleum refinery in Sarnia, Ontario.

Another Canadian company appearing as a top CPI spender both years is QIT-Fer & Titane Incorporated (Sorel-Tracy, Quebec) with construction already underway for a $100 million titanium dioxide plant expansion in Sorel-Tracy that began earlier this year and a second phase expansion of equal size planned to begin construction sometime in 2005.

Plans by Keltic Petrochemicals Incorporated (Halifax, Nova Scotia) to build a billion dollar grassroot complex in Atlantic Canada to include an ethylene plant and LNG terminal would easily top all spenders and represent the most significant CPI investment in Canada. Industrialinfo.com has been tracking plans by Keltic for this huge new complex since 2002. See related Industry Alert titled: Keltic Petrochemicals Files Regulatory Permits for a New LNG Terminal.

Currently, Industrialinfo.com is tracking nearly 60 projects planned to begin construction in Canadian provinces during 2005. The largest concentration of projects is planned in Quebec, with 22 projects and an estimated Total Investment Value (TIV) of nearly $200 million. Next in line when comparing project activity would be Western Canada, with eighteen projects and then Ontario with fifteen projects. Total spending in these two regions combined equals over $190 million in capital and maintenance expenditures. If Keltic's plans for a grassroot complex stay on schedule, Atlantic Canada will easily lead in total spending.

Quebec's leading position in 2005 project activity is quite significant considering Quebec is home to only 27% of the operational Canadian CPI plants. Traditionally, the largest spenders are petrochemical producers, primarily located in Ontario and Western Canada. Ontario is home to nearly half the total CPI plant population in Canada. Spending in this region is expected double in comparison to 2004, increasing from just over $50 million this year to an estimated TIV of over $107 million in 2005.

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