LSB announces start of ammonia production at El Dorado

LSB Industries announced today that its over-budget, behind-schedule ammonia plant is finally operational.

“Ammonia production is now underway. The Company expects to be selling ammonia into the pipeline by the end of May. The plant will gradually ramp production volume over the next two months and is expected to reach full capacity by the beginning of the third quarter of 2016.

As previously stated, LSB expects the total cost of the project to be approximately $830 million, which is at the low end of its previously articulated range of $831 million to $855 million. This includes the ammonia plant and the construction of a new nitric acid plant and concentrator that were completed in 2015.”
LSB Industries press release, 05/17/2016

The whole project, including infrastructure and the new nitric acid plant, was originally budgeted at $430 to $500 million. In terms of just the ammonia plant, it was supposed to start up in “late 2015” at a cost of $250 to $300 million – it ended up costing around $510 million and is roughly six months late.

Just last week, LSB also announced the sale of its climate control business for $364 million, due to close in Q3 2016, which will help to pay off some of the debts incurred to complete the El Dorado expansion.

Full details on the project are in my Research Note for El Dorado, AR.

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