LSB Industries Inc. plans to invest up to $425 million on three facilities at its El Dorado Chemical Co. plant in south Arkansas, the Oklahoma City firm said Wednesday.
About $250 million to $300 million will be used to build a 375,000-ton-per-year ammonia plant and $125 million will be spent on the construction of a nitric-acid plant. The company also plans to build a new nitric-acid concentrator at the El Dorado plant.
The work should be completed sometime in the summer of 2015, said Greg Withrow, general manager at the El Dorado Chemical plant. El Dorado Chemical has about150 employees and about 50 contractors, Withrow said.
El Dorado Chemical will hire 40 to 60 workers when the three projects are completed in 2015 at salaries of $60,000 to $70,000, Withrow said.
The chemical company, which produces sulfuric acid and nitric acid for agricultural and industrial use, had an explosion at a nitric-acid facility in El Dorado in May last year. No one was injured in the accident. Insurance proceeds from the accident also will be used to help pay for construction of the buildings.
“They have been spending quite a bit of money since then rebuilding certain parts of their infrastructure,” said Henry Florsheim, chief executive officer of the El Dorado Chamber of Commerce. “We knew there was a pretty good chance they would be adding a couple of plants to that site. They’ve been extremely busy pulling all of these plans together. It’s exciting to see this coming together.”
Withrow said El Dorado Chemical hopes to have a permit from the Arkansas Department of Environmental Quality in October, with the possibility of work beginning on the plants in November.
About 300 to 400 construction workers will be employed to build the facilities, Withrow said.
When the plants are completed, El Dorado Chemical will be able to double its ammonia production capacity, said Jack Golsen, LSB’s chief executive officer, in a conference call with analysts on Friday.
“The planned ammonia plant will lower El Dorado’s cost of production and provide approximately 155,000 tons per year of ammonia capacity above [El Dorado’s] current usage,” Golsen said in the conference call.
The nitric-acid facility that was damaged in the explosion last year used older technology and has been rebuilt with newer equipment. The new plants will also use updated technology, Withrow said.
LSB will finance the work at El Dorado with $425 million in bonds that were issued earlier this month.