SOURCE: Industrial Info Resources

Industrial Info Resources

May 05, 2010 05:20 ET

Terminal Owners and Contractors Gain Confidence in U.S. Economic Recovery, a "Navigating the Currents of Change" Webcast on Industrialinfo.com

SUGAR LAND, TX--(Marketwire - May 5, 2010) -  Written by John Egan for Industrial Info Resources (Sugar Land, Texas) -- The still-fragile U.S. economic recovery is good news for crude oil terminals and refiners, but it will take a while before significant new capital construction projects will be announced, according to Jesus Davis, Industrial Info's manager of research for the Oil & Gas Industry.

"The overall economy is the biggest factor affecting demand for crude oil and refined products," Davis said in an exclusive "Navigating the Currents of Change" interview. "Right now, the U.S. has high storage levels for both crude oil and refined products. A lot of refineries are operating at less than full capacity, or even shutting down, so as to not worsen the already-oversupplied market. Given today's reduced demand vis-à-vis years-earlier demand levels, we don't see a lot of new terminal construction in the near term."

But Davis said his conversations with terminal owners and contractors have been more positive in recent weeks: "Right now, the mood is a lot better than it has been. People are a little more optimistic about the future. Six or eight months ago, the tone was much more uncertain. But now we're starting to see companies allocate capital construction dollars, or at least think about spending (capital) dollars this year or next year."

The U.S. economy grew at an annualized rate of 3.2% for the first quarter of 2010, according to data released by the government April 30. During the fourth quarter of 2009, the U.S. economy grew at a 5.6% annualized rate.

Last year was a "very slow year" for new construction in the petroleum terminals and transmission business, Davis noted. "A number of planned capital projects from 2008 were delayed again or cancelled outright, victims of the recession. But some of those projects are starting to come back to life this year, as well as the announcement of a few new capital projects."

LOOP LLC is considering adding storage capacity at one of its locations in southern Louisiana.

Most of the capital construction activity is for import facilities, mainly along the Gulf Coast in Louisiana and Texas, but also a little bit in Mississippi and Alabama, he said. In addition, some terminal construction is taking place in the mid-Atlantic region.

Maintenance spending this year at tank farms that are at refineries and stand-alone terminals is likely to mirror last year's spending levels, Davis predicted. Industry maintenance standards require periodic maintenance of facilities, regardless of economic conditions, which means spending for that activity is relatively constant from year to year, Davis said. "There's a steady, consistent cycle of maintenance spending, regardless of the economy."

Davis encouraged owners and operators of terminals and refiners to attend the upcoming 30th Annual International Liquid Terminals Association (ILTA) Conference and Trade Show, to be held at the George Brown Convention Center in Houston on May 23-26, 2010. IIR will be exhibiting at Booth 920 at that event.

"The ILTA conference is a great opportunity for people to learn more about the industry's latest trends and strategic developments," Davis said. "It's also a great opportunity to learn how Industrial Info can help them identify potential new business opportunities and get ahead of trends affecting the industry."

Click here to join Mr. Davis for a discussion about the increased optimism being felt in the U.S. petroleum terminals industry.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. For more information send inquiries to petroleumterminalsgroup@industrialinfo.com or visit our website at www.industrialinfo.com.

Follow us on: Facebook - Twitter - LinkedIn - Vimeo

Contact Information

  • Contact:
    Joe Govreau
    713-783-5147