Fuel for Thought

  • US petrochemical industry forced to rethink investment decisions amid COVID-19 pandemic

US petrochemical industry forced to rethink investment decisions amid COVID-19 pandemic

Jun 30 2020 Read 665 Times

The COVID-19 outbreak and crude oil price crash have pushed petrochemical companies in the US to announce project delays. With major complexes such as Shell Beaver County Complex and Formosa St. James Parish Complex having already been affected, prevailing uncertainties and economic slowdown due to the outbreak could push companies to make more such announcements over the short-term, says GlobalData, a leading data and analytics company.

John Paul Somavarapu, oil and gas analyst at GlobalData, comments: “Most of the upcoming projects that have been affected are concentrated in US gulf coast states such as Texas and Louisiana and primarily involve shale gas processing. A few of the delayed projects include the Corpus Christi Polymers Project, which was scheduled for Q4 2020 and has been postponed to Q4 2021, and the Formosa Plastics Point Comfort Polyethylene project, which set to come on-stream in Q1 2020 has been delayed to Q3 2020. The industry foresees more such delays, which would have a knock-on effect to impact the progress and start-up of subsequent projects.”

The pandemic has compelled US petrochemical companies to re-evaluate their investment strategies, impacting their FID plans. Projects under early phases of development are expected to be hit hard. The FID of the PTTGC Belmont County project has been postponed indefinitely due to the outbreak, while CP Chem has also deferred the FID plans of its Gulf Coast Complex. 

John Paul concludes: “Petrochemical demand has been knocked down, as the end markets such as automotive, housing and construction have also experienced a decline in demand. Demand of key polymers in the US is expected to decrease by around 4% in 2020, and later rebound in 2021.”

Reader comments

Do you like or dislike what you have read? Why not post a comment to tell others / the manufacturer and our Editor what you think. To leave comments please complete the form below. Providing the content is approved, your comment will be on screen in less than 24 hours. Leaving comments on product information and articles can assist with future editorial and article content. Post questions, thoughts or simply whether you like the content.

Post a Comment





Digital Edition

Petro Industry News July 2020

July 2020

In This Edition Safety - BM 25 & BM 25 Wireless: 10 years of improved safety - Discover the enhanced PS200 Fuel For Thought - FCI announces Adam Schleyhahn as Director of Sales - New...

View all digital editions

Events

FlowExpo 2020 - NEW DATES

Aug 08 2020 Guangzhou, China

securika

Aug 11 2020 Moscow, Russia

National Safety Show

Aug 12 2020 Auckland, New Zealand

IE Expo China 2020 - NEW DATES

Aug 13 2020 Shanghai, China

OIL & GAS AFRICA 2020

Aug 13 2020 Nairobi, Kenya

View all events