Texas Chemical Industry Looks for Much Better Prospects in 2010

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Researched by Industrial Info Resources (Sugar Land, Texas)--After a predictably dismal year in 2009 for the Chemical Processing Industry (CPI) in Texas, a stronger outlook for 2010 appears to be in the making. Texas CPI plant owners saw more than $900 million in projects placed on indefinite hold or canceled entirely this year. As 2010 approaches, CPI project activity currently reported in Texas shows an increase in overall capital and maintenance spending by an estimated 36%, with the total investment value totaling more than $1.5 billion. This puts Texas in a very comfortable place as the No. 1 CPI spender in the United States, followed by neighbor Louisiana, which has $1.1 billion identified so far for 2010.

Building on the enthusiasm that things will continue to improve next year is the more than $400 million in capital projects for 2010 that are in some advanced phase of planning, or are pending approval in the coming months. Another $150 million already has been approved and engineering is under way, with plans for construction to begin in the first few months of 2010. Maintenance project activity is also expected to increase next year, with planned maintenance turnarounds expected to increase nearly 24%.

Among the largest projects approved for next year are plans by Enterprise Products Partners LP (Houston, Texas) for the addition of a second natural gas fractionation train at the company's Mont Belvieu, Texas, plant site. Engineering and construction for this estimated $100 million project will be completed by S&B Engineers and Constructors Limited (Houston) with construction tentatively getting under way during the first quarter of next year. Huntsman Corporation (NYSE:HUN) (Salt Lake City, Utah) is planning to begin work in January for a series of capital improvements at its propylene oxide unit in Port Neches, Texas. Turner Industries (Baton Rouge, Louisiana) has been selected as the general contractor for this work, which will take place in tandem with a major turnaround of the unit that is expected to cost more than $50 million to complete.

Although Texas and CPI producers in the region were affected by the recent recession, they stand to improve the quickest as markets begin to improve and downstream industry begins to replenish inventories.

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