LSB Industries Inc., the parent of El Dorado Chemical Co., said last week that most of the plants at its El Dorado, Ark., facility will be slowly returning to production in the next 90-day period, but that the plant which suffered the most damage, the DSN 98 percent concentrated nitric acid plant, is likely not repairable.
LSB announced on May 15, 2012, that the El Dorado facility suffered significant damage when a reactor in its DSN plant exploded. No employees or anyone in the El Dorado community were injured as a result of the explosion, and there was no environmental impact.
At this time, LSB intends to restart regular nitric acid and ammonium nitrate (AN) production, on a partial basis, in approximately 30 days, and increase that production over the next 90 days as various plants are brought back online. It is not currently known when the El Dorado facility will produce 98 percent concentrated nitric acid.
LSB said it is unlikely that repair of the DSN plant is feasible. The company is working along with its insurance carriers to evaluate the damages, a process that will take several months to complete. The DSN plant produced approximately 20 percent of the nitric acid manufactured at the El Dorado facility. The company intends to replace the nitric acid production capacity lost by this event.
The three other nitric acid plants, which produce approximately 80 percent of the nitric acid at El Dorado in concentrations from 56 percent to 65 percent, sustained less damage. LSB is in the process of undertaking repairs, which should be completed over the next 30 to 90 days. Production from these plants will be phased in over that period as repair of each plant is completed.
The high-density prilled AN plant was returned to operation the week of May 28 and is running on a limited basis with feedstock from other sources. High-density AN is used for agricultural and high-purity industrial applications.
The low-density AN plant required only minor repairs, which have been completed. When nitric acid is available from one or all of the three “regular” nitric acid plants, the El Dorado facility will resume production of low-density AN. Low-density AN is used primarily for industrial/mining applications.
The El Dorado facility has restarted the truck loading facilities for certain products to enable the facility to ship inventory that was on hand prior to the incident.
The El Dorado facility main nitric acid control room structure was destroyed by the explosion; however, most of the controls remained intact. A temporary control room will be utilized until a new permanent control facility is erected.
The sulfuric acid plant sustained substantial damage; as a result, the company is unable to set a target date for return of this plant to operation.
In addition to the damage sustained by the primary production plants discussed above, the electrical service and various support facilities were damaged. Temporary electrical service is available at this time. Repairs to the permanent electrical service and various support facilities will be made over the next 30 to 90 days.
LSB said it is working closely with customers to identify alternatives for supply. Industry sources have reported very tight supplies for AN in recent weeks, citing the El Dorado outage. The incident is believed to have kept AN prices firm at a time when other nitrogen prices, most notably urea and UAN, have quickly eroded.
The company believes that it has sufficient insurance to cover the damages to the facility and to cover the company’s lost revenue, after a $1 million deductible as to property damage and a 30-day waiting period as to business interruption, per insurance policy provisions.
“The company regrets the difficulties this incident has caused its customers, and is committed to restarting