LSB chemical plant in Alabama to lose some production after pipe ruptures

An ammonia plant at LSB's Cherokee Nitrogen Co. plant sustained a pipe rupture in what executives called a “freak” occurrence. LSB shares tumbled 13 percent on the news. The company is based in Oklahoma.
by Paul Monies Published: November 15, 2012
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LSB Industries Inc. said it expects an Alabama ammonia plant to lose several months of production after a pipe rupture, the third time this year the company has reported issues at one of its chemical plants.

The news sent shares tumbling in Wednesday trading on the New York Stock Exchange. LSB shares fell $5.10, or 13 percent, to close at $33.04. Volume was almost three times the normal daily trading average.

The Oklahoma City company said a pipe rupture at its Cherokee Nitrogen Co. plant in Cherokee, Ala., caused damage to the heat exchanger part of its ammonia plant. LSB said it's evaluating how much damage went beyond the rupture. No serious injuries or environmental issues were reported.

Executives at LSB called the pipe rupture a “freak” occurrence and said the Cherokee plant had recently undergone routine maintenance and repair.

“Basically, you had a pipe that burst,” said Tony Shelby, chief financial officer. “But because this is a very profitable plant, you had a strong (market) reaction to it. This is a very well-managed, consistently profitable plant. About half their product is nitrogen fertilizer, which as you know, carries pretty good margins today because of the cost of natural gas.”

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by Paul Monies
Energy Reporter
Paul Monies is an energy reporter for The Oklahoman. He has worked at newspapers in Texas and Missouri and most recently was a data journalist for USA Today in the Washington D.C. area. Monies also spent nine years as a business reporter and...
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