IHS Forum: Petrochemicals resurgence in the Gulf of Mexico

The availability of low cost feedstocks in North America combined with lower growth in China will dramatically impact where and how much new capacity will be built over the next 10 years. This presentation will examine the current outlook for planned capacity additions and our outlook for where additional capacity will be added over the next 10 years. For the US, the majority of the activity will be in the Gulf Coast with many of the project currently planned to be on stream by 2017. The amount of investment spending over the next few years and the labor and other support requirement needed to execute the construction projects and operate these new facilities is both an opportunity and a threat and strategies for managing this activity to minimize potential risk will be discussed.

While the USGC will be experiencing a major increase in capacity, activity in the Middle East and in China will also continue, and the US will at its peak the US will still account for less that 14% of global capacity. The rapid capacity expansions in China over the last 10 years have dominated the market and accounted for 64% of the capacity added during this period. Our outlook anticipates that this rate of increase, which has averaged 12% will decline in the years ahead averaging less that 6% on average. These changes in where capacity is being added will impact the supply chains that that support this activity and potentially impact the cost of adding new capacity in the future.

For an in-depth look at Petrochemicals Resurgence in the Gulf of Mexico, come to my session Thursday afternoon at the IHS Forum in Houston, September 17-19.

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.