Gulf Coast Region's Project Spending Said To Be Still Going Strong Into 2007

Demand for natural gas and clean burning fuels is driving project spending in the region.

The Gulf Coast region of the U.S. (Texas, Louisiana, Alabama and Florida), which usually has some of the biggest industrial projects starting construction each year, will again follow suit as over $26 billion in total spending from approximately 550 projects across 12 industries is projected to begin construction in 2007, according to new research by Industrial Info Resources.

A large portion of this activity, an estimated $2.9 billion of the total project activity planned for 2007, is comprised of projects that were originally planned to begin construction in a previous year, notes Industrial Info.

Currently, $2.8 billion of this capital spending has been approved and some engineering or execution is being done. Another $7.9 billion is in an advanced phase of planning with permit or board approval expected in the near future to allow for construction to begin in 2007. Combined, these 131 individual projects total 24 percent of the activity.

According to Industrial Info's research, the building of multiple grassroot LNG receiving terminals and the proposal for more than one coal or petroleum coke gasification plants in the region will dominate potential spending in 2007.

At least $10.9 billion in spending is planned for these projects, which is almost 41 percent of the total spending in the region during 2007.

The demand for natural gas and clean burning fuels by industrial and consumer users is one of the main reasons for the demand of these projects. The downstream effect of these projects supports the growth of the power, petrochemical and other industries that mostly depend on natural gas to remain competitive, Industrial Info's report shows.

The Pulp, Paper and Wood industry might have a very strong year in 2007, forecasts Industrial Info, even though project activity is limited to a few large projects, including a tissue machine addition in Alabama and a large machine conversion in Florida.

The Chemical Processing Industry (CPI) comes in at fifth place for overall spending, although the amount of project activity, currently identified at 177, is more than all the other industries in the region, Industrial Info's statistics show. The Petroleum Refining Industry has 95 projects currently identified.

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