Spring 2005 Shaping Up for Increased North American Petroleum Refinery Unit Maintenance Turnaround Activity

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Lately, the trend for North American petroleum refiners has been to put off planned maintenance turnarounds for as long as possible, in order to maximize capacity output, enabling refiners to take advantage of continuing high profit margins. North American refiners continue to postpone maintenance work, originally scheduled for the traditional Fall time period, to the first quarter and Spring of 2005, and in some cases turnarounds are being pushed further out to take advantage of market conditions. The traditional Fall turnaround period in the refining industry is the months of September, October, and November. The Spring turnaround months are February, March, and April. These months are typically lower demand months, where refiners can shut down unit production for brief periods of time to perform routine and scheduled maintenace activities or tie in capital project upgrades.

Since our last report on petroleum refining turnaround activity in June 2004, (Forecast Maintenance Spending for North American Refiners Down in the Fall 2004), Industrialinfo.com is seeing a continuation of this trend, leading to a possible increase in turnaround activity in 2005. Nowhere is this trend more prevalent than in the Southwest region, where refiners have scheduled 86% more unit turnarounds for Spring 2005, than in Fall 2004. However, if refining margins remain favorable, expect to see refiners continue to postpone maintenance turnaround work until market conditions warrant.

Click on the image at right to view the Spring 2005 Regional Refinery Unit Turnaround Map.

Favorable operating conditions for refiners over the past 1-2 years have led to the deferment of a significant number of planned maintenance turnarounds at North American petroleum refineries. More than 75 unit turnarounds have been rescheduled from 2003 and 2004 to the first quarter of 2005, or later.

Currently, there are 298 units scheduled to be shut down for maintenance, repair, and overhaul during the first quarter of 2005, at 190 operating petroleum refineries in North America. That's a 37% increase from scheduled turnarounds during Fall 2004. Refiners are planning maintenance turnaround activity for 64 crude units, 55 reformers (Semi-Regen and CCR), and 29 fluid catalytic cracker units (FCCU).

Not surprisingly, Texas leads all states, with 29% of the planned unit turnarounds at 58 different units. California is second, with 39 units, and Louisiana is third, with 22 units. Valero Refining Company leads all refiners, with 32 units scheduled to shut down during the first quarter of 2005 for scheduled maintenance turnaround work. Refiners in the oil and gas leading Southwest U.S. region, which includes Texas, Louisiana, Oklahoma, and Arkansas, have scheduled 108 unit turnarounds for Spring 2005. That’s a sizable 86% increase in turnaround activity, when compared to the 58 units that were scheduled for 4Q04.