Price and market trends: Manpower, permitting likely to delay US petchem projects: CEO

14 June 2013 09:29  [Source: ICB]

Shortages of skilled labour are already apparent in the plant turnaround season whilst bureaucracy should improve

The wave of petrochemical plant projects announced for the US in response to the shale oil and gas revolution faces a serious shortage of manpower than can imperil those plans, two chemical producers' CEOs said on 4 June.

Ethane crackers, propane dehydration plants (PDH) and other facilities have been planned in the wake of the shale boom to take advantage of the growing feedstock advantage in the US.

"The queue's already building quite quickly," said Craig ­Morrison, CEO of Momentive Specialty Chemicals, who made his comments at the American Chemistry Council's (ACC) annual meeting in Colorado Springs, Colorado.

Even with only a few projects being built at present, manpower shortages already are being felt throughout the industry, especially along the Gulf Coast, said Jim Gallogly, CEO of Netherlands-based LyondellBasell.

"In turnaround seasons in the spring, we already see shortages of qualified welders and ­pipefitters. This is before significant construction has started," Gallogly said.

"As an industry, we're reaching out to the trades, we're reaching out to a lot of different constituencies to try to get qualified people ready to accomplish what we need to do as an industry."

Part of that outreach is to ­unions, he said.

"We're asking for their help to make sure we do have the crafts necessary," Gallogly said.

The manpower shortage is due partly to an aging population and competition for qualified labour from the drilling industry, ­Gallogly said.

"The oilfield is a wonderful place to be as well," he said.

Manpower will not be the only issue inhibiting petrochemical plant growth, he said.

Permitting has been somewhat slow, with some talk that the US government furloughs that came out of the sequestration budget cuts might be hampering the process, Gallogly said.

But getting a permit should not be as complicated as it currently is, he said.

"We're coming in and doing the right things environmentally," Gallogly said.

"These plants are state of the art, and emissions are very low, and so we think we're giving the regulators something that they can approve without too much discussion, because we're doing it the right way," he added.

Manpower and permitting ­issues likely will lead to delays in the building of announced ­petrochemical plants, he went on to add.

"You should expect the timing will be later than most people are saying," Gallogly said.

By: Jeremy Pafford
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