October 2018

Trends & Resources

Industry Perspectives: New downstream project announcements surge 43% over the past year

According to the Hydrocarbon Processing Construction Boxscore Database, more than 320 new downstream capital projects have been announced over the past year.

Nichols, Lee, Hydrocarbon Processing Staff

According to the Hydrocarbon Processing Construction Boxscore Database, more than 320 new downstream capital projects have been announced over the past year (FIG. 1). This total represents a 43% increase in new project announcements year over year. Since September 2017, new project announcements have averaged nearly 25/mos. Most of these new projects (80%) are within the gas processing/LNG and petrochemical industries. A breakdown of each sector includes:

  • Gas processing/LNG—41% (133 projects)
  • Petrochemicals—39% (127 projects)
  • Refining—20% (61 projects).
FIG. 1. New project announcements, September 2015–September 2018.
FIG. 1. New project announcements, September 2015–September 2018.

 

With more than 110 projects, the Asia-Pacific region continues to lead in new project announcements. The US follows the Asia-Pacific region with a 26% market share in new project announcements. Both the gas processing/LNG and petrochemical industries in the US have benefitted greatly from domestic shale gas production, which has created a boom in the development of new natural gas gathering and processing capacity, infrastructure buildouts, LNG export capacity and a renaissance in the country’s petrochemical sector. A breakdown of market share in new project announcements over the past year includes:

  • Africa—4% (14 projects)
  • Asia-Pacific—35% (113 projects)
  • Canada—6% (18 projects)
  • Western Europe—6% (18 projects)
  • Eastern Europe, Russia, CIS—8% (27 projects)
  • Latin America—4% (13 projects)
  • Middle East—11% (34 projects)
  • US—26% (84 projects).

The Middle East has increased its market share, as several nations have announced capital intensive projects to diversify their product portfolios from the reliance on crude oil sales. In total, the Asia-Pacific, Middle East and US regions represented approximately 72% of total new project market share in 2018. HP

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