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LSB Industries to cut output at Alabama ammonia plant after pipe rupture

11.16.2012  | 

The company said early estimates point to a three- to five-month outage at the ammonia plant, depending on lead times for repair parts. Until then, the Cherokee Nitrogen facility can produce a limited amount of nitric acid and ammonium nitrate solution from purchased ammonia.

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By DEBBIE CAI

LSB Industries said a pipe ruptured at one of its units, Cherokee Nitrogen Co., damaging the heat exchanger portion of its ammonia plant.

Shares, which had been halted ahead of the news, fell 6.8% to $35.55 in recent trading. The stock is up 27% so far this year.

LSB, which manufactures and sells air conditioning and chemical components, said the incident didn't cause serious injury or hurt the environment. It is trying to determine if damages extend beyond the area of rupture.

According to news reports, an explosion was felt late Tuesday in parts of Colbert County, Ala., where the facility is located, and one Cherokee Nitrogen employee sustained a minor injury.

The company said early estimates point to a three- to five-month outage at the ammonia plant, depending on lead times for repair parts. Until then, the Cherokee Nitrogen facility can produce a limited amount of nitric acid and ammonium nitrate solution from purchased ammonia.

LSB said its insurance policy provides replacement cost coverage and has a $2.5 million deductible for property damage.

The company last week reported third-quarter earnings rose 6.4% on higher sales at its larger chemical division. Its Cherokee facility was down for a planned turnaround during that period and was initially expected to be in full production during the fourth quarter.


Dow Jones Newswires



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