When COVID-19 decimated the demand for fuels, the first reaction by industry was to delay costs—especially in gasoline and fuel production. A great number of refinery maintenance turnarounds were canceled or delayed into 2021 or beyond.
Industrial Info Resources, a market intelligence firm in Sugar Land, Texas, fears that this will result in an unprecedented logjam of maintenance work over the next year, as 2020 volumes are piled on top of an already lengthy list of work. The group forecasts an increase of 5.62% in turnaround activity in 2021, and an even greater 19% jump in 2022.
Trey Hamblet, vice president of research at Industrial Info, says the surge is inevitable. “What we originally projected for 2020 fell short by 23 percent,” Hamblet says. “Roughly 75 percent of that activity was pushed into 2021, with the balance of that pushed into 2022.”
Therefore, Industrial Info estimates some $1 billion in additional maintenance spending across North America in 2021. Much of that will be along the Gulf Coast and will likely occur in the latter half of the year.
“That poses some real concerns and risks for the market,” he adds, “and could put constraints on manpower, resources and materials.”
Louisiana, however, might not feel the manpower strain as intently, according to a new feature from 10/12 Industry Report, as capital project delays at Formosa, Methanex and elsewhere have created a worker surplus. “There are people still out of work,” says Fred McManus, chief operating officer at Brown & Root in Baton Rouge. “If there was an emergency outage somewhere today, we could quickly ramp up with an additional 300, 400 or even 500 people. And I don’t see that changing in 2021.”