Chemical company LSB Industries, Inc. announced that the expansion project at its El Dorado, Arkansas, nitric acid plant and concentrator facility are on schedule and should be completed by the first quarter of 2016.
LSB’s current cost estimate for the expansion is now in the range of $560 million to $575 million, up from the previous estimate of $495 million to $520 million. The company does not expect to require additional financing to complete the expansion other than the previously announced financings related to the installation of the cogeneration facility and the ammonia storage tank.
Productivity and quality issues with a subcontractor responsible for the installation of piping in the ammonia plant were contributing factors to the increased cost estimate to complete the expansion, LSB said.
“We are pleased to report that the timeline for completion of our El Dorado facility expansion remains intact, although we are disappointed that the total cost of the project is expected to exceed our initial cost estimates,” said Barry Golsen, LSB’s president and CEO. “The safety, product quality and operational reliability of the El Dorado facility are our primary areas of focus as we move forward toward the completion of the project. Even with the anticipated higher costs, we believe that the project economics remain compelling, with the new capacity expected to yield approximately $90 million of annual incremental EBITDA operating at full capacity.”