Total capital spending on construction is estimated to exceed $57 billion in 2013 according to Hydrocarbon Processing’s HPI Market Data 2013. This amount includes investments in the development and construction of grassroots facilities, along with upgrades to existing HPI facilities to meet growing global demand. The IEA forecasts that global oil demand will reach 95.7 million barrels per day (MMbpd) by 2017. Over the same time frame, global refining capacity could rise to 100 MMbpd.
In the U.S., the downstream construction sector is benefitting from the recent boom in shale gas production. The U.S. market share for new projects increased from 8% in 2010 to 20% in 2012, which is on par with the Middle East. The two countries rank second behind the Asia-Pacific region, which accounts for 30% of total new projects in 2012.
U.S. companies aim to construct over 190 MMtpy of LNG export capacity over the next several years; more than a dozen LNG export facilities are awaiting approval from the Department of Energy. This LNG construction boom could propel the U.S. to become a dominant LNG-exporting powerhouse within 10 years.
Cheap ethane feedstocks are fueling additional project activity for natural gas liquids (NGLs), fractionators, ethylene crackers and petrochemical infrastructure construction, primarily along the US Gulf Coast. Over 3.5 MMtpy of new cracker capacity is planned to come online by 2017; the largest new unit is Chevron Phillips Chemical’s 1.5-MMtpy ethylene cracker in Baytown, TX. Other petrochemical product producers such as Dow Chemical, Equistar, Formosa, INEOS, LyondellBasell, Sasol and Shell have expressed plans to build new capacity over the next few years.