US LSB ammonia plant behind schedule for UAN production

19 January 2010 20:53  [Source: ICIS news]

HOUSTON (ICIS news)--The new Pryor Chemical nitrogen fertilizer plant in Pryor, Oklahoma, started producing anhydrous ammonia in January, but had yet to produce any urea ammonium nitrate (UAN), parent company LSB Industries said on Tuesday.

Production of ammonia, the feedstock for UAN, was originally expected to begin during the third quarter of 2009.

“Equipment and supplier issues have played a role in the delays at Pryor,” company chief executive Jack Golsen said.  “Despite these delays, we continue to believe that Pryor Chemical represents a valuable asset for LSB.”

When in full production, Pryor Chemical expects to produce and sell about 295,000 tonnes/year of UAN and 31,750 tonnes/year of ammonia.

Kansas-based Koch Nitrogen agreed last May to purchase all of the UAN production at the Pryor plant. The agreement has a five-year term, with termination options by both parties beginning after August 2010.

To meet its obligations to Koch, LSB has had to supply UAN acquired from other sources, said company spokeswoman Linda Latman.

LSB said that since there was no significant production at Pryor Chemical in the fourth quarter of 2009, it continued to incur expenses of approximately $1.6m/month (€1.1m/month) in start-up costs, in addition to variable costs such as natural gas and electricity.

Koch did not return calls seeking comment.

($1 = €0.69)

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By: Frank Zaworski
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