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Oklahoma company receives $113 million insurance payout after blast

23 October 2013

Oklahoma City-based LSB Industries Inc. will get a $113 million insurance payment after a May 2012 explosion damaged one of its chemical plants in south Arkansas. No one was injured in the blast at the El Dorado Chemical Company plant, which produced nitric acid.

The company had previously announced plans to spend about $120 million to build a replacement plant in El Dorado that will make a weaker form of nitric acid than was previously produced. LSB Chief Financial Officer Tony Shelby told The Oklahoman that most customers now want the less-concentrated form of the chemical, which is sold for farming and industrial uses, including semiconductors, herbicides, pesticides and metal treatment.

Shelby said LSB is awaiting final action from the Environmental Protection Agency on a permit for the new nitric acid plant, which he said should be operating by late 2015.

In August, the company said SAIC Constructors LLC will also build a 375,000-ton-per-year ammonia plant on the site. That project is expected to cost $250 million to $300 million and should be complete by the end of 2015.

The 2012 explosion at the chemical plant occurred when the facility was restarted after being shut down for more than two weeks for maintenance. Plant officials have said the blast occurred when acid, nitrogen tetroxide and oxygen combined.

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