Industrial Midyear Update 2023
SOURCES: Reuters Energy, Houston Chronical, Economic Alliance Houston Port Region, TCC/ACIT, LCA LCIA, AFPM, API, GBRIA, International Energy Agency (IEA) Refinitiv, and IIR – July 2023 by Jeremy Osterberger, BIC Magazine.
Petroleum Refining:
2023 is a big year for refinery additions; many long-awaited plants will be completed, bringing global refining capacity totals back to 2019 levels.
In North America, 2023 is the biggest year since 2019 for planned maintenance; 2024 is expected to be similar.
Globally, 11 refineries (1.4mn bpd) under construction; 4 refineries (1.4mn bpd) nearing completion
Petroleum Refining Projects (kickoff 2023-24):
ExxonMobil Baton Rouge (Completed) Delek – Tyler Refinery (Completed) Valero – Texas City Refinery (Completed)
Phillips 66 – Lake Charles Refinery (Westlake) (Completed)
Valero – Port Arthur Refinery (Completed)
Flint Hills Resources – Corpus Christi Refinery – West (Completed) Valero – Port Arthur Refinery (High Probability of Completion) Valero – Houston Refinery (High Probability of Completion) Cenovus – Lima Refinery (High Probability of Completion)
Phillips 66 – Sweeny Refinery (Medium Probability of Completion) Chevron – Pasadena Refinery (High Probability of Completion) Marathon – Detroit Refinery (High Probability of Completion)
U.S. Construction Activity by Industry:
Petroleum refining project count is up by 60% from 2022, investments are up by 23% from 2022. O&G Production project count is up by 6% from 2022, investments are down by 26% from 2022. Terminals project count is up by 214% from 2022, investments are up by 140% from 2022.
Alternative fuel project count is down by 4% from 2022, investments are up by 10% from 2022. Chemical processing project count is down by 1% from 2022, investments are down by 30% from 2022.
Industrial manufacturing project count is down by 4% from 2022, investments are down by 64% from
2022.
Midstream Projects likely to move forward:
TC Energy 2023 Intra-Basin Sys Expansion (74 miles) ANR-Gulf Coast & Midwest MarketAccess (125 miles) TC Energy GTN Xpress (85 miles)
TC Energy Edson Mainline (56.2 miles)
Tennessee Gas – Evangeline Pass Expansion (13.3 miles) MPLX/Enlink/Devon/Whitewater – Matterhorn (490 miles)
Upstream:
U.S Gulf of Mexico crude oil production is back to 2019 levels as of Jan 2023 (1.9 million bpd)
– 2023/24 levels expected to reach 2 million bpd
Offshore online projects:
Shell Vito Semi-Submersible FPU: 100,000 bbl/d (1st Qtr. 2023)
BP Mad Dog 2 Semi-Submersible FPU: 120,000 bbl/d (1st Qtr. 2023)
Offshore projects in construction phase include:
Chevron’s Anchor Semi-Submersible FPU: 75,000 bbl/d (1st Qtr. 2024) Shell Offshore Whale Semi-Submersible FPU: 140,000 bbl/d (2nd Qtr. 2024)
Beacon Offshore Shenandoah Semi-Submersible FPU: 70,000 bbl/d (4th Qtr. 2024)
Offshore projects recently approved:
Shell Offshore Dover Subsea Tieback: 20,000 bbl/d (1st Qtr. 2025)
Chevron Corporation Ballymore Subsea Tieback: 75,000 bbl/d (1st Qtr. 2025) LLOG Offshore Salamanca FPU: 60,000 bbl/d (2nd Qtr. 2025)
Carbon Capture and Sequestration:
Currently, 3,700 miles of new CO2 pipeline infrastructure is in active development to transport CO2 to Class VI well locations in permitting. To meet net-zero targets by 2050, a CO2 pipeline buildout of 70,000 miles (or $225 Billion) and $80 billion in carbon capture equipment would be required.
Projects:
Ascension Clean Energy (ACE) – Donaldsonville Grassroot Blue Hydrogen Ammonia Complex Dow Incorporated – Fort Saskatchewan Net-Zero Ethelyne Unit Addition
St. Charles Clean Fuel Holdings – St Charles Grassroot Blue Ammonia Plant
Air Products and Chemicals – Geismar Grassroot Darrow Blue Hydrogen Complex Lake Charles Methanol LLC – Lake Charles Westake G-R-Pet-Coke Plant
Adams Fork Energy LLC – Gilbert Grassroot Blue Ammonia Plant and Carbon Capture
Linde PLC – Beaumont Grassroot Blue Hydrogen Complex
Itochu Corporation -Fort Saskatchewan Grassroot Blue Ammonia-Methanol Plant Newpoint Gas LLC – Portsmouth Brownfield/Retrofit Clean Hydrogen Plant Nutrien Limited – Geismar Clean Ammonia (Blue Ammonia) Unit Addition Sandpiper Chemicals LLC – Texas City Grassroot Blue Methanol Plant Train 1
Air Products and Chemicals – Edmonton G/R Net-Zero Hydrogen Energy Complex
CF Industries Holdings – Donaldsonville Blue Ammonia and CO2 Capture Unit Additions Bia Energy – Shreveport Grassroot Blue Methanol (Alma1) Plant
Dow – UCC Seadrift Operations SMR Nuclear Plant
ESG:
Currently active North America ESG-related projects: $1.33 trillion
- Renewable power: $627 billion
- Renewable power/ energy storage: $134 billion
- Energy storage: $105 billion
- Carbon capture & storage: $180 billion
- Power-to-X: $45 billion
- Renewable fuels: $70 billion
- EVs/Batteries: $127 billion
Main themes:
Maintenance – smaller installed base calls for higher utilization and maintenance Crude and Vacuum Spending – upgrades and crude diet flexibility projects dominate ESG investments – renewable diesel leads the pack
Grassroots Projects – the future of refining
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