LSB Industries Inc. today gave an update on the operational performance of its Pryor, Okla., nitrogen facility and a continued outage at the facility.
Pryor underwent its annual planned turnaround to address routine maintenance issues on July 11, 2015 and concluded the turnaround on Aug. 4, 2015. While in the process of restarting the ammonia plant, Pryor’s automated monitoring systems detected several mechanical issues that prompted management to take the plant out of service. Certain components were removed from the facility, taken off-site for repair and were reinstalled, and the plant restarted on Aug. 21, 2015.
Subsequent to the restart of the ammonia plant on Aug. 21, 2015, Pryor was in production for four days. However, on Aug. 25, 2015 a pipe connecting two primary components of the ammonia plant developed a crack, causing operations at Pryor to once again be suspended. LSB said there were no injuries or environmental impact as a result of the crack, and it appears that the damage is isolated to this one pipe. After inspection by a third party, it has been determined that the pipe repairs should be completed by Sept. 18, 2015.
LSB estimates that the periods of downtime at Pryor in August and September, assuming the ammonia plant is operational by Sept. 18, 2015, will reduce third quarter 2015 sales volumes of UAN and ammonia by a total of approximately 35,000 to 40,000 tons and 5,000 to 6,000 tons, respectively, while lowering operating income by a total of approximately $8.0 million to $8.5 million, which includes lost profit, unabsorbed overhead expenses and costs of repair. Each additional day of downtime at Pryor, beyond Sept. 18, 2015, is estimated to result in a reduction of operating income of approximately $150,000 to $200,000.