We believe the investment cycle remains intact. In our initial Under Construction report, we analyze U.S. petrochemical development where we expect over $20 billion to be invested between 2012 and 2017.
Almost 20 million tonnes (metric tons) of U.S. capacity additions by major petrochemical manufacturers have been announced equating to around 70% growth in U.S. capacity over the next five years. We estimate 85% of additions could go on line between 2016 and 2017. In turn, we expect front-end engineering services between 2012 and 2014 should afford multiple engineering-and-construction (E&C) opportunities for higher-margin work followed by higher-revenue engineering, procurement and construction awards between 2014 and 2016.
In addition to direct petrochemical investment, we expect E&C companies to benefit from billions of dollars invested in ancillary gas pipeline, processing and storage infrastructure that should be necessary to transport feedstock from abundant natural-gas regions to petrochemicals facilities. Although infrastructure should be developed simultaneously, we expect gas infrastructure construction activity to accelerate between 2012 and 2017.
U.S. natural-gas prices continue to fall while crude prices remain at investible levels. Both petrochemical and natural-gas export development announcements have accelerated as global natural-gas prices remain well above U.S. natural-gas prices. The crude oil-to-gas ratio remains at all-time highs exceeding 40-1, considerably higher than the 7-1 ratio considered favorable for U.S. petrochemical investment. First mover advantages and reasonable prices for input materials such as aluminum and steel should accommodate the approval of final investment decisions.