DCT Industrial had a busy 2017, despite the oil downturn.The real estate investment trust broke ground on three new Houston-area facilities totalling 474,000 square feet, and it acquired 48 acres in the Port of Houston.
The Denver-based company is one of the largest industrial owners and developers in the Bayou City, managing 5 million square feet of industrial real estate locally.Justin Bennett, the senior vice president overseeing DCT’s Houston operations, recently visited with the Chronicle about his outlook for 2018.
Q: How’s business? A: Business is doing very well. A big boon to the industry has been the expansion of plastics.
Source: Q&A: Plastics boom keeps Houston humming – Houston Chronicle
The first of several new petrochemical plants coming online this year became operational this week when Houston-based Occidental Petroleum opened its new facility near Corpus Christi.The $1.5 billion ethylene plant in Ingleside is a joint venture between Occidental’s OxyChem subsidiary and Mexico-based Mexichem. The facility, called an ethylene cracker, takes ethane from natural gas production and converts it into ethylene, which is the primary building block for most plastics.The project is the smallest and first of several Texas Gulf Coast ethylene crackers being completed this year. Others are under construction in the Houston area by Exxon Mobil, Chevron Phillips Chemical and Dow Chemical.The plant will churn out 1.2 billion pounds of ethylene a year that Occidental will turn into vinyl chloride mononers, which Mexichem will then convert into polyvinyl chloride to make PVC piping.
Source: Occidental’s massive petrochemical plant comes online in Texas | Fuel Fix
It’s no secret that sublease space has flooded Houston’s office market amid the oil slump— NAI Partners tallies 7.6 million square feet of it, with about 3 million square feet of it coming out of west Houston submarkets, which have a high percentage of the city’s oil and gas tenants.Traditionally, sublease space makes the market more competitive and benefits tenants, who use the increased options to negotiate a better deal. But this time around, it’s not just the quantity of sublease space that has west Houston landlords nervous, it’s the quality of that space.Jon Silberman, managing partner of NAI Partners’ Houston office, said about 700,000 square feet of the sublease space in west Houston is essentially good as new — space taken in brand-new buildings in 2013 or 2014 that companies took in excess of their current requirements, with hopes of growing into it.
And all of a sudden — and it was sudden — some of those companies hadn’t even moved in yet. If a company leased 10 floors, they maybe built out seven, and had three floors for expansion as they needed them,” Silberman said. “Well, oil tanks, business slows, and they don’t need the three floors of expansion. They may not need the original space they built out.”
via NAI Partners’ Jon Silberman: Quality sublease space puts pressure on West Houston landlords – Houston Business Journal.
On Dec. 11 local business leaders packed into a ballroom at the Omni Hotel near downtown Houston for a yearend chamber of commerce luncheon. There was a lot to celebrate. At more than $500 billion, Houston’s regional economy is now the fourth-largest in the U.S. Over the past decade, Houston has added more jobs—628,000—than exist in all of New Orleans. In August, more new-home permits were issued in Houston than in the entire state of California. Twice as much office space is being built there as in New York City.Despite the Texas-size smiles at the lunch, fear was in the air. A barrel of oil cost $45 less that day than it did in July, the last time prices were over $100. Houston is home to more oil companies than any other city in the world, and a decade of high prices has transformed it. Asked by the moderator at the lunch what they wanted for Christmas, audience members texted in their answers. The word-cloud projected onto a large screen included wishes for a new boat and a BMW X6. At the center in big, bold letters was the top wish: higher oil prices. By the end of the day, oil had fallen below $60 a barrel for the first time since 2009.Although it’s early days for the oil glut, Houston is starting to feel the pain. Energy companies have begun announcing cuts to their 2015 capital budgets of as much as 25 percent. Rig counts are falling in Texas as companies shut down drilling operations. At $60 a barrel, by a rough calculation, companies producing oil in Texas have collectively seen their monthly cash flow fall from $6.4 billion in June to $3.6 billion.
via Houston's Energy Industry Faces Layoffs, Spending Cuts – Businessweek.
London-based BP PLC (NYSE: BP) plans to reduce staff by cutting mid-level managers across the board in production, refining and in corporate offices, the company told the Times of London.The announced cuts come after continued drops in oil prices, which are currently below $70 a barrel. BP, which has about 84,000 employees, is one of Houston’s largest energy employers with about 10,000 people in the region. Some cuts are expected to take place in Houston, where the company houses its main U.S. offices. Project freezes may also take place.
via BP Plc to cut jobs in production, refining as oil prices slump below $70 – Houston Business Journal.
Houston, Tx has seen significant growth in recent years from the shale boom. A material amount of the companies which have the highest revenues and/or employ the most people in the Houston metropolitan area are in the energy industry or provide services to the energy industry. Many of these companies saw big declines in their stocks on November 28, 2014 after OPEC announced they would not be curtailing production.
Houston Tx Companies Equity Returns Dec 1 2014
The Energy Information Administration expects to report condensate production volumes early next year and movements of crude by rail by the summer, agency head Adam Sieminski said today.The agency is continuing to study new areas in need of reporting, including storage volumes on the Texas coast, he said on the sidelines of the Deloitte Oil & Gas conference in Houston, Texas.EIA expects to begin surveying production data directly, including API gravity information, leaving behind a patchwork of state-level production data on which the agency currently relies.”I think by January, I hope, we’re going to be able to start collecting data,” Sieminski said.Rapidly changing US energy development has exposed gaps in the agency’s data, relied upon by both policy makers and industry to help monitor the sector. Condensate, previously a marginal part of crude production, has received special interest as current US policy allows producers of growing volumes of the high-gravity oil to lightly distill and then export it.EIA will continue to rely on US Commerce Department data to track condensate exports, Sieminski said.The agency also plans to begin offering third-party data next year on crude volumes moved by rail. EIA will evaluate whether it will still need to develop its own surveying for a crude logistics method particularly important to the US Atlantic and west coasts.Federal regulations limit the agency’s ability to survey companies for the information without administrative approval. Third-party data is, at this point, faster, he said.But EIA would need administrative approval to modify surveys to gather more information on available storage in the Houston area on the Texas Gulf coast. Sieminski saw a need for such figures, similar to what the agency collects on the crude storage hub at Cushing, Oklahoma.
via News – Argus Media.
The Gulf Coast energy boom continues to drive a hot job market, and companies such as Fluor Corp. are positioned to design and build many of the new projects in the region. Fluor is a complete solutions provider offering engineering, procurement, fabrication and construction services EPFC.A growing resumeDan Spinks, Fluor’s Houston operations vice president and general manager, said, “Our Houston office is currently executing several large projects and we have many good prospects. We look forward to continued growth and are ready to ramp up to meet our clients’ needs and expectations.”In October, Fluor, in a joint venture, announced a new contract to provide engineering, procurement and construction services to Sasol for their petrochemical complex near Lake Charles, Louisiana.This new project will provide significant opportunities for both technical and skilled craft workers. To support this new project, Fluor is hiring construction workers in the Louisiana region, as well as professional engineers and support staff in the company’s Houston office. Fluor also is responsible for significant petrochemical projects in Texas. As part of a joint venture, the company is providing engineering, procurement and construction services for a new ethane cracker for Chevron Phillips Chemical Co. in Baytown. Additional workers are needed in the Baytown area to support the project ramp-up, with an expected peak of 3,500 craft workers hired by fall 2015.In addition, Fluor is designing and building a new expansion to Dow’s Oyster Creek complex in Freeport. The project expects to peak at 3,000 in late 2014.Other refinery projects in Texas, Louisiana and Indiana also constitute Fluor’s deep portfolio of projects in the U.S.Germany-based BASF has chosen Fluor as its engineering partner for chemicals capital projects across North America, and a number of BASF projects are under way along the Gulf Coast.
via Employer Profile: Fluor – Energy boom means job growth – Houston Chronicle.
To capitalize on a flood of domestic and Canadian crude into the U.S. Gulf Coast, logistics giant Kinder Morgan Energy Partners is spending more than $1.5 billion in Houston to build the most flexible oil and fuel transport hub in the country.The company’s expanding infrastructure smorgasbord includes a bit of almost everything at the increasingly crowded Houston Ship Channel – all next door to the biggest concentration of refiners in the country.The buildout, executives say, responds to the increasingly dynamic world of physical crude trading in North America, where the variety of available crudes is growing, and is aimed at securing their central position in moving oil from the U.S. shale boom to market.Customers want multiple options to switch delivery modes on a dime and snag the best price for refinery feedstocks. They need more dock and storage space to handle surging volumes of fuel being shipped overseas.”More of them are producing more than they can consume in the United States. So they want to take it to water, either for movement up and down the coast … or to export because you see a tremendous amount of growth,” John Schlosser, president of Kinder Morgan’s terminal division, said of refiners.Schlosser, who spoke to Reuters on a tour of the company’s facilities, said the company was doubling down on its core business.”Our bread and butter is the midstream – that’s where we’re making all of our investments,” he said. “It’s like connecting the dots.”Kinder’s latest push is to add storage and pipeline connections to final domestic destinations, a huge oil-by-rail offloading operation, and a wider export platform.
via Kinder Morgan builds out Gulf Coast logistics hub in U.S. oil boom | Reuters.
Houston is among the top cities in the country with the most industrial construction underway, thanks mostly to the booming energy industry. And there’s more to come.There are currently 45 spec and build-to-suit industrial buildings totaling 5.2 million square feet under construction in Houston. Only Atlanta; Chicago; Baltimore; Columbus, Ohio; Dallas; Indianapolis; Southern California; and Philadelphia are building more this year, according to Graham Hildebrand, JLL research manager.
via Port of Houston spurs industrial construction – Houston Business Journal.