US Downstream Engineering, Construction & Maintenance Market Outlook 2017

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A new whitepaper recently released by Petrochemical Update provides a market outlook on US Downstream Engineering, Construction & Maintenance spending in 2017.

Combined American and Canadian refinery capital spending is expected to hit $6 billion in 2017

A new whitepaper recently released by Petrochemical Update provides a market outlook on US Downstream Engineering, Construction & Maintenance spending in 2017. The paper notes that despite weaker oil prices, analysts expect U.S. refinery capital spending to rise over the next three to five years as refiners race to prepare facilities to meet new regulations from the Environmental Protection Agency (EPA) and take advantage of cheap domestic feedstock.

Combined American and Canadian refinery capital spending is expected to hit $6 billion for those projects beginning construction in 2016, with another $14.49 billion planned for construction kick-off in 2017 and $17.32 billion planned for 2018, according to Industrial Info. Refiners are delaying major capital-investment projects in favor of smaller, lower-risk revamps and expansions, until this phase of uncertainty passes. Moving forward, a larger percentage of this spending will go on small-to-midsized capital projects, as companies focus on quick opportunities for returns on investment, as opposed to pushing for larger projects.

The shale-gas boom has delivered the U.S. petrochemicals industry a competitive advantage, and a wave of construction activity is underway that will see ethylene capacity increase by 40% to about 37 mtpa by 2019, according to the U.S. Energy Information Administration (EIA). In addition to capacity expansions at existing facilities, six ethane crackers will each add at least 1 mtpa of capacity. These crackers are: ■ Louisiana sites: Sasol North America and a Lotte Chemical-Axiall joint venture, both at Lake Charles; ■ Texas sites: Chevron Phillips Chemical at Baytown Cedar Bayou; Dow Chemical at Freeport; ExxonMobil at Baytown; Formosa at Point Comfort. In 2017 ethane consumption is projected to increase by 80,000 bbl/d as some of the new capacity comes online, according to the EIA

In LNG The U.S. will have added around 64 million tons per annum of LNG export capacity once the first wave of construction is completed by around 2019, according to Industrial Info.

Scheduled plant outages, turnarounds (TARs) and shutdowns are expected to increase by 5.4% to $10.43 billion across all U.S. industrial markets in 2017, with the petroleum refining industry to see the biggest increase, according to IIR. Refiners will increase planned maintenance spend by 38.5% to $1.26 billion next year, in the consultancy’s estimates. The chemicals-processing sector will see a 4% increase to $1.81 billion, and the power sector a 9.3% increase to $3.54 billion. A combination of the other industries (pipelines, alternative fuels, metals, pulp and paper, food and beverage, manufacturing, and pharmaceuticals) will fall 4.7% to $3.82 billion.

The full 40 page whitepaper (US Downstream Engineering, Construction & Maintenance Market Outlook 2017) is available to download for free via the Petrochemical Update website here - http://1.petchem-update.com/LP=15410 in addition to a detailed market analysis the whitepaper also features project case studies with senior executives at Dow Chemical, Dupont, Freeport LNG, Braskem and Meridian Energy.
For more information, please contact

Joshua Bull
Managing Director
Petrochemical Update
josh(at)petchem-update(dot)com
+44 (0)20 7375 7227

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