U.S. Southwest Region Attracts $317 Billion in Industrial Development

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Researched by Industrial Info Resources (Sugar Land, Texas)--What is the largest region for industrial project activity in the U.S.? The Southwest region, which includes the states of Arkansas, Louisiana, Oklahoma and Texas, leads the nation with more than 2,500 active industrial projects totaling $317 billion. Why are companies investing in the Southwest? If you ask executives at Luxemburg-based Tenaris S.A. (NYSE:TS) why they selected Texas after a worldwide site study for a new, $1.5 billion seamless steel pipe mill, they are likely to include transportation infrastructure, business security and skilled labor as leading factors, not to mention closeness of proximity to oil and gas industry end users. The U.S. shale gas boom has led to increased demand for line and drill pipe, causing a number of suppliers to increase production to meet demand.

Click on the link at right to view a chart showing the breakdown of active U.S. industrial projects by market region.

Just last week, Tenaris announced plans for an additional investment in Texas with construction of a sucker rod mill in Conroe, Texas. This comes on the heels of completion of a sucker rod mill in Mexico in late 2011. Made of steel, sucker rods are used in oil industry pumping systems.

Of the total $317 billion in active industrial projects in the Southwest, 15% are under construction, including more than 407 projects totaling $46.7 billion. One of those projects is Cheniere Energy Incorporated's (NYSE:LNG) $5.6 billion natural gas liquefaction and export plant at the company's Sabine Pass LNG terminal in Louisiana. Construction began last year on the first two trains and is expected to continue through 2016.

Another 734 projects totaling $43 billion are scheduled to begin construction before the year's end. For example, many U.S. olefins producers are looking to take advantage of inexpensive natural gas feedstock that is available because of the shale gas boom and subsequent availability of inexpensive natural gas. ExxonMobil Chemical Company, a subsidiary of ExxonMobil (NYSE:XOM), is evaluating the possibility of beginning construction later this year on an ethylene plant, also in Texas. The potential $2 billion investment involves construction of a 3 billion-pound-per-year ethylene unit at the company's olefin complex in Baytown, Texas.

The remaining $227 billion in active projects are scheduled to begin construction in 2014 or beyond.

All figures are derived from Industrial Info's North American Industrial Project Database.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, 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.