Pryor Chemical Co.’s anhydrous ammonia and UAN plants in Pryor, Okla., are both offline due to a June 18 fire that destroyed the ammonia plant’s primary reformer. LSB Industries Inc., Oklahoma City, which owns the facility, said the fire was immediately extinguished and there were no environmental releases as a result of the incident. LSB said it was not aware of any injuries resulting from the fire.
LSB is determining the extent of the damages, and based upon its current assessment, anticipates that due to lead times for replacement parts, the repairs will be completed in approximately 90 days. LSB has notified its insurer of this event. The company’s insurance policy, which provides replacement cost coverage, has a $1 million deductible for property damage. The company’s business interruption insurance covering certain lost profits and extra expense has a 30-day waiting period with a $250,000 deductible.
In addition to the fire, there was another incident at the Pryor plant on June 24, which LSB officials described as “a very minor event that produced a lot of misinformation.” LSB CEO Jack Golsen told Green Markets that an anhydrous ammonia leak from a rupture in a pipeline was under control by the time the fire department arrived.
“There was never an evacuation of any surrounding plants,” Assistant Fire Chief Sherman Weaver told the local press. “The fire department never issued an evacuation order for anybody.” That, Golsen added, was a far cry from reports that the plant had been evacuated and people were being advised to stay indoors. “It was a short-term event that was quickly contained,” according to Golsen. “We evacuated the people from the plant for safety precautions. They were actually out for about 15 to 30 minutes and everyone went back to work. When the alarms go off you never know what you’re dealing with, so we just got everybody out.”
Golsen said the ammonia pipe had a rupture that was about ¾ of an inch long. Golsen noted that the Pryor plant has been producing ammonia commercially since the first of the year, “but not in the quantities that we expect to be producing eventually.” He added that “We don’t expect to be in production for another 90 days (because) we still need to make some repairs not connected with this event.”
LSB brought the long-idled Pryor ammonia plant back up in January (GM Jan. 25, p. 10) in hopes of producing ammonia and UAN. UAN capacity is 325,000 st/y, with an additional 35,000 st/y of ammonia available for the market once the UAN is produced. Koch Nitrogen has an agreement to market the UAN (GM May 11, 2009). UAN production was initially slated to begin in 2009; however, the startup date kept being pushed back.
Golsen told analysts in May that Pryor was not yet at targeted quantities (GM May 17, p. 1). “If we were producing at targeted quantities, we’d be making substantial profits today, but we’re not quite doing that. So at this point, I would say we’re virtually covering our costs.” He said the company would put out a press release when UAN production got to a sustained basis. It has not yet done so.
“Startup delays were primarily a result of unanticipated equipment issues that were discovered after we began the startup process,” said Barry Golsen, LSB vice chairman and president, in May. “Some of these were due to vendor deficiencies and some were just not possible to foresee until we activated the plant.” He said that when equipment issues arose, in some cases there were significant vendor lead times. In May, LSB was hopeful those issues were behind it.