LSB Industries Announces Partnership to Capture and Sequester Over 450,000 MT of Carbon Annually
April 28 2022 - 8:00AM
Business Wire
Company to partner with Lapis Energy on Low
Carbon Ammonia Project at El Dorado, Arkansas
Facility
LSB Industries, Inc. (“LSB” or “the Company”), (NYSE: LXU),
today announced that it entered into an agreement with Lapis Energy
(“Lapis”) to develop a project to capture and permanently sequester
CO2 at LSB’s El Dorado, Arkansas facility (“El Dorado”). Lapis,
backed by Cresta Fund Management, a Dallas-based middle-market
infrastructure investment firm, will make 100% of the capital
investment required for the project development. The project will
commence immediately, with expected completion by 2025, subject to
the approval of a Class VI permit, at which time CO2 injections
will begin. This is the first carbon capture and sequestration
(“CCS”) project announced in the state of Arkansas and the third
CCS project from ammonia production in the U.S.
“We are very excited to partner with Lapis and take our first
step to becoming a supplier of low carbon or ‘Blue Ammonia’ --
allowing us to participate in what we believe will become a large
future market,” stated Mark Behrman, President, and Chief Executive
Officer of LSB Industries. “This project is very compelling for us
from both environmental and commercial perspectives. Carbon
sequestration is a proven means of reducing greenhouse gas
emissions from ammonia production and our El Dorado facility is
uniquely located above deep geological formations with the capacity
to sequester decades of CO2 production from the plant. Our
customers, particularly our industrial customers, need solutions to
help them decarbonize their supply chains and low carbon feedstocks
represent an attractive opportunity to accomplish this goal in the
near-term, while technologies for more sustainable no carbon or
‘Green Ammonia’ production continue to become economical.”
Lapis, founded in 2020 by a team of leading industry experts, is
a Dallas-based vertically integrated energy infrastructure
development firm focused entirely on decarbonization through CCS.
Once operational, the project at the El Dorado site will initially
capture and permanently sequester more than 450,000 metric tons of
CO2 per year in underground saline aquifers, with the potential to
increase this quantity based on potential debottlenecking projects
at the facility. This will be equivalent to permanently removing
approximately 109,000 passenger cars from the road, which
represents approximately 11% of the cars registered in Arkansas.
The permanently sequestered CO2 generated from the facility’s
ammonia production is expected to qualify for federal tax credits
under Internal Revenue Code Section 45Q, which are currently $50
per metric ton of CO2 captured beginning in 2026, but under
evaluation by Congress to increase the 45Q tax credit to $85 per
metric ton of CO2.
Once in operation, the sequestered CO2 will reduce LSB’s scope 1
GHG emissions by 25% from current levels. In addition, sequestering
more than 450,000 metric tons of CO2 annually will enable LSB to
produce over 375,000 metric tons of blue ammonia annually, a
product expected to be more valuable than conventional ammonia.
Mr. Behrman continued, “Lapis is the perfect partner for us in
our initial low carbon ammonia project given their significant
experience and knowledge in the clean energy space. We are pleased
to be working with them as we begin what we expect to be the first
of several projects that will position LSB as a leader in the
decarbonization of hydrogen and ammonia and generate significant
long-term value for our shareholders.”
About LSB Industries, Inc.
LSB Industries, Inc., headquartered in Oklahoma City, Oklahoma,
manufactures and sells chemical products for the agricultural,
mining, and industrial markets. The Company owns and operates
facilities in Cherokee, Alabama, El Dorado, Arkansas and Pryor,
Oklahoma, and operates a facility for a global chemical company in
Baytown, Texas. LSB’s products are sold through distributors and
directly to end customers primarily throughout the United States.
Committed to improving the world by setting goals that will reduce
our environmental impact on the planet and improve the quality of
life for all of its people, the Company is well positioned to play
a key role in the reduction of global carbon emissions through its
planned carbon capture and sequestration, and zero carbon ammonia
strategies. Additional information about LSB can be found on its
website at www.lsbindustries.com.
About Lapis Energy LP
Lapis, founded in 2020 by a team of industry-leading experts,
and backed by Cresta Fund Management, is a Dallas-based, vertically
integrated energy infrastructure development firm focused entirely
on decarbonization through CCS. With teams located in Europe and
Asia Pacific, Lapis is actively building a global portfolio of CCS
projects. For more information: www.lapisenergy.com.
Forward-Looking Statements
Statements in this release that are not historical are
forward-looking statements within the meaning of the U.S. Private
Securities Litigation Reform Act of 1995. These forward-looking
statements, which are subject to known and unknown risks,
uncertainties and assumptions about us, may include projections of
our future financial performance including the effects of the
COVID-19 pandemic and anticipated performance based on our growth
and other strategies and anticipated trends in our business. These
statements are only predictions based on our current expectations
and projections about future events. There are important factors
that could cause our actual results, level of activity, performance
or actual achievements to differ materially from the results, level
of activity, performance or anticipated achievements expressed or
implied by the forward-looking statements. Significant risks and
uncertainties may relate to, but are not limited to, business and
market disruptions related to the COVID-19 pandemic, market
conditions and price volatility for our products and feedstocks, as
well as global and regional economic downturns, including as a
result of the COVID-19 pandemic, that adversely affect the demand
for our end-use products; disruptions in production at our
manufacturing facilities; our ability to complete the preferred
stock exchange transaction on the terms disclosed or at all and
other financial, economic, competitive, environmental, political,
legal and regulatory factors. These and other risk factors are
discussed in the Company’s filings with the Securities and Exchange
Commission (SEC).
Moreover, we operate in a very competitive and rapidly changing
environment. New risks and uncertainties emerge from time to time,
and it is not possible for our management to predict all risks and
uncertainties, nor can management assess the impact of all factors
on our business or the extent to which any factor, or combination
of factors, may cause actual results to differ materially from
those contained in any forward-looking statements. Although we
believe the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results,
level of activity, performance or achievements. Neither we nor any
other person assumes responsibility for the accuracy or
completeness of any of these forward-looking statements. You should
not rely upon forward-looking statements as predictions of future
events. Unless otherwise required by applicable laws, we undertake
no obligation to update or revise any forward-looking statements,
whether because of new information or future developments.
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version on businesswire.com: https://www.businesswire.com/news/home/20220428005421/en/
Investor Contact: Fred Buonocore, CFA, Vice President of
Investor Relations (405) 510-3550 fbuonocore@lsbindustries.com
Media Contact: David Kimmel, Director of Communications
(405) 815-4645 dkimmel@lsbindustries.com
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