- Associated Press - Thursday, July 16, 2015

OKLAHOMA CITY (AP) - An Oklahoma-based company said the expansion of its chemical plant in southern Arkansas probably will cost more than previously thought.

LSB Industries Inc. now estimates the expansion of its El Dorado, Arkansas, plant will cost $560 million to $575 million, which is up from the previous projection of $495 million to $520 million, The Oklahoman (https://bit.ly/1Oh31Uv ) reported.

Despite the cost increase, the new nitric acid plant and concentrator still are on track to finish and be operational by the end of the third quarter of 2015. The 375,000-ton-per-year ammonia plant remains on schedule to finish and be operational in the first quarter of 2016.

The estimated price increase is due to updated estimates on costs for construction materials and labor-hours based on information provided by its engineering, procurement and construction contractor.

The company adds that productivity and quality issues with a subcontractor responsible for the piping installation in the ammonia plant had caused anticipated costs to rise.

LSB doesn’t expect to seek additional financing to complete the chemical plant expansion based on its current cash flow.

“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,” Company CEO Barry Golsen said in a statement. “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.”


Information from: The Oklahoman, https://www.newsok.com



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