LSB Industries Enters 5-Year Supply Agreement for Ammonium Nitrate Solution

LSB Industries (LSB) signed a landmark supply agreement to deliver up to 150,000 short tons of low-carbon ammonium nitrate solution (ANS) per annum. The ANS will be supplied from LSB’s facility in El Dorado, AR for five years starting on Jan. 1, 2025, with a phasing-in of the low-carbon contracted volume. Freeport Minerals Corp. (Freeport) will use the purchased low-carbon ANS for its copper mining operations in the United States.

“This important agreement validates our belief that our industrial and mining customers will identify the low carbon nitrogen products that we plan to produce as an important part of their decarbonization journeys and value them accordingly,” said Mark Behrman, LSB’s President and CEO. “We view this contract with Freeport as a major step towards attaining our vision of becoming a leader in the global energy transition and look forward to partnering with them as a strategic supplier as they advance toward their net zero aspiration.”

The low-carbon product stems from the carbon capture and sequestration project currently underway with Lapis Energy—it will capture and permanently sequester more than 450,000 metric tons of CO₂ annually from El Dorado’s ammonia production. LSB and Lapis Energy’s carbon sequestration project is slated to generate more than 375,000 tons of low-carbon ammonia to sell or upgrade for customers in the form of low-carbon nitrogen products, such as ANS.

LSB’s collaborative project is expected to start operations in 2026, pending the approval of the Environmental Protection Agency on LSB and Lapis Energy’s Class VI permit application. The companies expect to receive approvals in the latter half of 2025.

The development of carbon capture and sequestration (CCS) projects has been an increasing trend for global operations, but a vast majority of this upscale takes place in North America; for example, LSB’s Arkansas-based capture project. The United States alone leads in deployment with 73 new CCS facilities entering the pipeline in 2023. The top applications for carbon capture in the United States are ethanol, ammonia, hydrogen, and fertilizer production, as well as power generation and heat.

Considerable geological storage resource development is also underway in the United States—as of March 15, 2024, 130 well permit applications for 44 projects were under review and an additional 69 well permit applications for 33 projects were being reviewed in states that have Class VI primary enforcement authority (Louisiana, Wyoming, and North Dakota).

U.S. CCS scale-up is supported by policies and clear regulatory frameworks, which have significantly improved the business case. Economic incentives include the enhancement of the 45Q tax credit for stored CO₂, now set at US$85 per ton, through the Inflation Reduction Act. Additional federal funding for CCS projects is accessible through initiatives such as the CHIPS & Science Act (2022) and the Bipartisan Infrastructure Law (2021).

The United States’ goal of carbon-free electricity by 2035 has also turned attention to the potential to scale up CCS at fossil-fuel power plants. Projects at various stages of development continue at 23 power/heat facilities, with more than half planning to be operational in the late 2020s.