Chemical Processing Project Spending Seen Growing Sharply In Second Quarter

Increase for capital and maintenance estimated at 20 percent, according to Industrial Info Resources.

The Chemical Processing Industry is looking at a strong start for capital and maintenance spending, in the U.S. and Canada, during the second quarter of 2007 with a projection of an increase of over 20 percent for project activity, according to research released Tuesday by Industrial Info Resources. 

The increase is based on more than 280 active projects that Industrial Info previously reported, with a construction start planned for the second quarter of 2007 having a total investment value (TIV) forecasted at $2.6 billion.

Industrial Info estimates that 38 percent of the project activity is for planned maintenance turnarounds projected to be done during the second quarter – a major increase of 26 percent for turnaround project activity in 2006.

The biggest turnaround projects are slated for Western Canada, but the Gulf Coast region of the U.S. will see the major portion of the overall activity with an estimated $65 million from only 25 planned turnarounds.

In the U.S., the Gulf Coast and Southwest regions will share a large portion of the capital spending planned for the second quarter, with almost 50 projects projected to reach over one billion in total spending. Coming in next, but with only half that amount of spending from about 35 projects, is the Great Lakes region, the report notes.  

The single biggest project will be a combined investment of $642 million from Formosa Plastics Corp. USA, Chevron Phillips Chemical Co. LP and Pioneer Americas Inc. for projects in Texas and Louisiana. 

On the West Coast, Praxair Inc. will start building, by June 2007, a grassroot 260 million scfd hydrogen plant in Richmond, Calif., to meet the increased demand for hydrogen by petroleum refiners, according to the report.

In the Great Lakes region, BASF Corp. is planning to expand its recently acquired site in Wyandotte, Mich., with an investment of $140 million beginning in April, Industrial Info reported.

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