Gulf Coast Chemical Plant Owners Lead U.S. in Expansions and Additions

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Researched by Industrial Info Resources (Sugar Land, Texas)--The Chemical Processing Industry (CPI) of the United States has improved significantly this year in regard to both project numbers and total spending. While spending across the industry looks promising, the CPI companies with plant locations along the U.S. Gulf Coast region are posting some of the most impressive results, especially planned expansions and major additions. The Gulf Coast region includes the coastal stretches of Texas, Louisiana, Alabama, Mississippi and Florida, home to 481 operational chemical plants.

Industrial Info is currently tracking more than $3.1 billion in planned and approved projects that will be considered major expansions or additions to existing chemical plants in the U.S. in 2011. Nearly two-thirds of this activity, $1.9 billion, is planned to take place at chemical plants in the Gulf Coast region. Considering that only 15% of the operational CPI plants are located in this region, these investments reinforce the region's impact on the overall growth of the industry.

In addition to these expansions and additions, there is another $850 million in "in-plant" capital projects planned for the CPI along the Gulf Coast for this year, plus two grassroot plants totaling another $251 million. In-plant capital refers to projects such as debottlenecks, modifications, renovations, compliance, retrofits and similar projects. CPI plant owners along the Gulf Coast will contribute almost 50% of the industry's total project investments in 2011.

Some of the largest projects planned to begin construction in the Gulf Coast region this year include plans by The Dow Chemical Company (NYSE:DOW) (Midland, Michigan), Westlake Chemical Corporation (NYSE:WLK) (Houston, Texas), Air Products & Chemicals Incorporated (NYSE:APD) (Allentown, Pennsylvania), Sasol North America Incorporated (Houston, Texas) and PCS Nitrogen Incorporated (Northbrook, Illinois).

Dow Chemical is building a new chlorine unit as part of its complex in Freeport, Texas, and Westlake is constructing a new chlorine unit addition at its site in Geismar, Louisiana. Both of these projects have been under consideration for several years are finally getting under way. Among the most encouraging projects pointing to renewed confidence in the chemical market are plans by PCS Nitrogen to restart an estimated 450,000-ton-per-year ammonia unit at its Geismar plant. This unit was taken offline many years ago, when the cost of feedstock had risen to near historic highs.

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