U.S. Southwest Leads Nation with More than $18 Billion in Second-Quarter 2015 Construction Starts

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Southwest leads all other U.S. geographic regions in the total investment value for projects currently planned to kick off in second-quarter 2015, at $18.29 billion. Low commodity prices, particularly for natural gas, are driving much of the spending, with almost 70% of the total coming from three industries: Oil & Gas Production, Power, and Chemical Processing.

Click on the image at right for a graph detailing active projects scheduled to kick off in the second quarter of 2015 in the U.S. Southwest by industry.

The Southwest region includes Arkansas, Louisiana, Oklahoma and Texas. The bulk of the spending comes from projects along the Gulf Coast in Texas and Louisiana.

It's no surprise that the boom in U.S. natural gas development has pushed the Oil & Gas Production Industry to the front of the line in spending, with 83 projects that have a total value of more than $6.3 billion set to kick off in the second quarter. The largest of these is Cheniere Energy Incorporated's (Houston, Texas) $4.1 billion construction of a 4.5 million-ton-per-year liquefied natural gas (LNG) production train at its liquefaction facility in Corpus Christi, Texas. The train will have a natural gas inlet capacity of 1 billion cubic feet per day and utilize ConocoPhillips' (NYSE:COP) (Houston) Optimized Cascade Liquefaction Technology. Endesa S.A. (Madrid, Spain) has signed a 1.5 million-ton-per-year purchasing agreement that will cover the next 20 years.

The Power Industry isn't too far behind with 40 projects that have a total value of more than $4.35 billion. One of the largest is Competitive Power Ventures Incorporated's (Silver Spring, Maryland) $1.38 billion construction of the Pondera King Energy Center in Houston, Texas. The 900-megawatt (MW), natural gas-fired, combined-cycle station will feature four 171-MW General Electric (NYSE:GE) (Fairfield, Connecticut) MS7001FA.07 combustion turbine generators with heat-recovery steam generators, and two 108-MW steam turbine generators. Kiewit Construction Company (Houston), part of Kiewit Corporation (Omaha, Nebraska), is performing engineering, procurement and construction services.

The Chemical Processing Industry is spending much less that the Production or Power industries, but still has an impressive $2.12 billion attached to 110 projects that are set to kick off in the second quarter. Among them is Shintech Louisiana LLC's (Addis, Louisiana) $120 million expansion of a vinyls complex in Plaquemine, Louisiana. The project, which is part of a three-phase expansion, will replace the sieve trays on two distillation columns and install four heat exchangers to increase capacity to 1.1 million tons per year. This phase is set to be completed in November; the third currently is set to be completed in January 2016. Shintech is a subsidiary of Shin-Etsu Chemical Company Limited (Tokyo, Japan).

Among all other industries, one of the largest projects set to kick off is in the Petroleum Refining Industry: INCA Refining LLC's (St. James, Louisiana) $400 million construction of a crude oil topping refinery in Convent, Louisiana. The 125,000-barrel-per-day (BBL/d) facility is designed to produce naphtha, diesel, jet/kerosene, lube oil and residue oil. It is set to be completed in late 2016.

More than half of the region's TIV--more than $10.7 billion--is related to 96 projects that are now in the engineering stages. The region also has 128 projects worth more than $7 billion in the planning stages, where plenty of factors could increase, decrease or eliminate the expected spending, while 224 projects worth almost $554 million already have kicked off the first stage of construction and will kick off the second in the fourth quarter.

Industrial Info's Gulf Coast Region Labor Market Analysis provides insight into historical and forecast capital and maintenance spending through 2020, as well as current wage rates and expectations for the future. To learn more about this product, contact Industrial Info's VP of Labor Analytics, Tony Salemme, at tsalemme@industrialinfo.com or by calling (209) 547-9878.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, three offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.