LSB Industries through a wholly owned subsidiary has concluded a license agreement with AirGen, a Texas-based start-up company that may have developed a novel method of producing hydrogen.

Under the license agreement, the LSB subsidiary will study the use of the patent pending technology for production of bulk hydrogen.

Hydrogen is the primary feedstock material for ammonia production and ammonia is the feedstock for LSB's Chemical Business' nitrogen based chemical products, such as nitric acid and nitrogen based blasting products and fertilizers. The technology is in the early, developmental stage and has not been proven by LSB to have commercial value. The agreement contemplates a pilot facility to be constructed within two years subject to proof of concept.

According to LSB the license agreement is exclusive within the field of ammonia production from hydrogen produced through the licensed technology. Further, if the technology is successfully implemented at LSB or any affiliate of LSB, the agreement provides exclusive sublicensing rights to LSB within the global ammonia industry, where it is contemplated that LSB and AirGen would cooperate to pursue sublicensing of the technology.

Jack E. Golsen, chairman and CEO of LSB, stated: "The technology looks promising, and if proven to be commercially viable, it could have a major impact on the nitrogen fertilizer business by eliminating natural gas as the primary source of hydrogen in the production of ammonia."