Oklahoma City-LSB Industries Inc. said Feb. 26 that its subsidiary, Pryor Chemical Co., has received required regulatory permits to operate the Pryor nitrogen facility in Pryor, Okla. “As previously reported, we have been considering activating a portion of our idle Pryor facility subject to securing a sales agreement with a strategic customer to purchase and distribute the majority of the UAN production and subject to receiving the necessary permits,” said LSB Chairman and CEO Jack Golsen. “Based on our discussions with several large strategic industry customers, we believe that in the near future we will be able to reach an agreement to sell or distribute the UAN production at the Pryor facility. Based on the current status of those discussions, coupled with the fact that we have now received the necessary permits, we are proceeding with the preparations to start the facility. Barring unforeseen delays and subject to securing a sales or distribution agreement as discussed above, we expect to start production at the Pryor facility during the third quarter of 2009. If the Pryor facility becomes operational, we plan to produce and sell approximately 325,000 st of urea ammonium nitrate (UAN) fertilizer and approximately 35,000 tons of anhydrous ammonia annually. The preliminary estimated total cost to activate the Pryor facility is approximately $15 to $20 million, with a portion of these costs to be expensed as incurred. We plan to fund this project from our available cash on hand and working capital. However, the actual timeframe to begin production, the related amount of production and sales, and the total cost to activate the facility could be significantly different from our current estimates.”
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