Tag: LSB Industries

LSB Industries is selling its climate control business

LSB Industries will soon be a pure-play nitrogen producer. It announced this morning that it "has entered into a definitive agreement to sell the Company's Climate Control Business."

Although separating its two businesses has been an explicit possibility for some time, and this sale makes a lot of sense, the timing is noteworthy. LSB has been forced into making deals to stay afloat since the costs of its El Dorado expansion spun out of control in 2015.

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2016 in preview: US ammonia capacity to increase by a third

This will be a transformative year for the ammonia industry. Four world-scale ammonia plants are scheduled to begin production, as well as three smaller plants, a couple of expansions, and a "clean coal" behemoth.

If all these projects start up successfully this year, they will add more than five million tons of ammonia capacity.

The new projects scheduled for 2016 will increase North American capacity by more than a quarter - and, because only one of these projects is in Canada, will increase US capacity by more than a third.

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2015 in review: start-ups and cancellations, but mainly delays

Nine ammonia projects were supposed to start up in 2015. Two succeeded.

OCI's debottleneck at Beaumont, TX, came on-stream in April 2015, and PotashCorp completed its expansion at Lima, OH, in October 2015.

So: in 2015, less than 200,000 mtpy of new ammonia capacity came on-stream.

Of the seven other projects slated for 2015, two were cancelled and the rest have been pushed into 2016.

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CEO commentary, Q1 2015. Discuss: Will the US be a nitrogen exporter?

If you want to know whether - or when - the US will become a nitrogen exporter, read what the fertilizer company CEOs say during the latest round of quarterly earnings calls.

These guys should have formed pretty solid opinions by now about how the capacity expansions will affect long-term supply and demand, and how they're going to gain/keep market share and competitive advantage. But it can be a challenge to infer what those opinions might be.

I've summarized the pertinent parts of the debate here, with quotes from Agrium, CF Industries, KBR, LSB Industries, OCI, Potash Corp, and Yara.

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Cherokee, AL — LSB Industries

Ammonia plant: Cherokee, Alabama - LSB Industries

UPDATED: 19/19/2017 — see Change Log

OWNER: Cherokee Nitrogen LLC (LSB Industries Inc)
PROJECT: Nitrogen production complex

SUMMARY STATUS: Operational
The Cherokee plant has been producing nitrogen fertilizers since 1961, and was acquired by LSB Industries in 2000. With repeated outages over the years, LSB is focused on improving reliability at the site, which serves agricultural and industrial markets; most recently, in 2Q 2017, the Cherokee site reported a 100% on-stream rate.

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El Dorado, AR — LSB Industries

Ammonia plant: El Dorado, Arkansas - LSB Industries

UPDATED: 10/16/2017 — see Change Log

OWNER: El Dorado Chemical Company (LSB Industries Inc)
PROJECT: Nitrogen production complex, brownfield ammonia plant

SUMMARY STATUS: Operational
El Dorado has been producing nitrogen since 1944, when the US army built the Ozark Ordnance Works. LSB Industries began construction on its new ammonia plant in November 2013 but costs spiraled out of control and start-up was delayed. LSB's share price fell off a cliff, followed by sweeping changes in management; the company was stabilized by a financing deal and asset sales, and LSB's plants may still be up for sale. The new ammonia plant started up in May 2016 and has been producing above nameplate capacity.

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Pryor, OK — LSB Industries

UPDATED: 10/10/2017 — see Change Log

OWNER: Pryor Chemical Company (LSB Industries Inc)
PROJECT: Ammonia-UAN plant, expansion

SUMMARY STATUS: Operational
LSB Industries restarted the Pryor ammonia-UAN plant in 2010, after it had lain idle for a decade, and expanded it in 2013. Ammonia has been produced on this site since 1954; the current plant was commissioned in 1997. Reliability has been a major problem at Pryor over the years; in September 2017, "a minor fire" put the plant out of operation for about six weeks.

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