LSB Industries Inc. announced Oct. 11 that its subsidiary, Pryor Chemical Co., located in Pryor, Okla., has restarted production of anhydrous ammonia. The facility was shut down after a pipe failure that resulted in a fire in June of this year, damaging the ammonia plant’s primary reformer (GM July 5, 2010).
At present, LSB says repairs have been completed and anhydrous ammonia is being produced at Pryor in accordance with the company’s restart plan. The nitric acid and urea plants will be activated to produce UAN in proper sequence to meet anticipated customer orders. LSB had targeted the end of the September as the date to get the plants up.
LSB has been renovating much of the Pryor facility, which was idled several years ago. To date, LSB says the ammonia and UAN plants have not reached full production.
Back in August (GM Aug. 16) LSB reiterated to analysts that Pryor is a valuable asset that will contribute to earnings for many years to come. “Even considering the delays and increased costs at Pryor, we anticipate completing Pryor for a fraction of the cost of a comparable new plant,” said LSB President Barry Golsen. He added that LSB is enthusiastic about its relationship with Koch Nitrogen Co. on this project, which should facilitate the growth of this business for LSB. Koch has the contract to market the product from Pryor.
Once it achieves full production, the Pryor ammonia plant is expected to begin producing 525 st/d. After upgrades to UAN, some 35,000 st/y should be available for the market. UAN production is expected to be 325,000 st/y. Thereafter, the company can boost that to a rate of 700 st/d. The company has the option in the future to bring up two smaller ammonia plants at the site as well. Their capacity is a combined 200 st/d, which would make a total ammonia production of 900 st/d possible.
In August, LSB said Pryor capital expenditure requirements for the rest of 2010 are about $14 million, most of which will occur in the third quarter. This amount includes $8 million to rebuild and repair the damaged reformer, and $6 million for other rebuilds and improvements. LSB expects that most of the costs to rebuild the reformer will be covered by insurance, with a $1 million deductible.