Kilgore, Texas-Martin Midstream Partners LP told analysts that a new $3.5 million co-generation plant will ensure that the company’s Plainview, Texas, sulfuric acid plant will be completely independent from current electricity providers. The new co-gen unit should be up in the fourth quarter. “We believe this co-generation plant will be a significant insurance policy against future unexpected downtime with our sulfuric acid plant,” said Robert Bondurant, Martin executive vice president and chief financial officer. Electrical outages have been a traditional cause for the plant going offline. In fact, the plant is near the end of the transmission line, making it even more subject to power outages, according to the company. In the first quarter an electrical outage caused by a winter storm took the sulfuric acid plant offline for 65 days, negatively impacting cash flow by $2.4 million (GM May 10, p. 9). The plant came back up March 5. Of the $2.4 million, $1 million was repair and maintenance costs that were scheduled to be done in the fourth quarter. “We will now be able to forego this scheduled fourth-quarter turnaround and its related costs later this year,” said Bondurant. “So a significant amount of lost profits in the first quarter will be made up in the fourth quarter.” Supplementing earnings results reported last week (GM May 10, p. 9), Martin Sulfur Services income increased in the first quarter ending March 31, 2010, to $2.93 million from the year-ago $1.9 million. There was a 23 percent increase in volumes sold, and an average sales price increase of 6 percent. The segment includes both sulfur and fertilizer. Sulfur volumes were 273,200 lt, up from the year-ago 229,200 lt, while fertilizer volumes were 69,700 lt, up from 50,600 lt. First-quarter operating expenses were up 10 percent or $400,000, half of which was for an insurance deductible for hull damage suffered by the Margaret Sue.
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