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New Sand Storage Facility in Texas to Serve Permian

U.S. Silica Holdings Inc. and Union Pacific Railroad Co. have struck a deal to build a rail-accessible silica sand storage facility in Odessa, TX, a move that enables the company to bring more of its products to the Permian Basin for hydraulic fracturing (fracking) operations.

Frederick, MD-based U.S. Silica and a railroad subsidiary, Union Pacific Distribution Services, plan to develop a 20,000-ton frack sand storage facility, which is expected to be operational by the end of 2014. U.S. Silica said it plans to invest about $12 million in the facility, which will have the capability to load unit trains.

The facility will serve what has been a growing number of horizontal rigs operating in the Permian. Of the 483 rigs operating in the basin Feb. 7, about half (240) were horizontal rigs. In the first week of February, horizontal rigs (165) made up 36% of the basin’s total 462 rigs.

U.S. Silica has six oil and gas silica plants: in Ottawa and Rochelle, IL; Rockwood, MI; Pacific, MO; Mill Creek, OK, and Sparta, WI.

U.S. Silica also said it had completed modifications to an existing resin-coating sand facility in Rochelle. The changes enable the plant -- which produces resin-coated frack sand for the oil and gas industry -- to ship raw sand to multiple destinations across the country.

The Rochelle facility will have a transload function and will also be able to serve unit trains. U.S. Silica said the first unit train was shipped from Rochelle last month.

"Rochelle gives us a tremendous amount of flexibility to move material cost-effectively to all of the major shale basins in the country, while at the same time optimizing the utilization of this very important asset," said U.S. Silica COO Mike Winkler.

In 2012, U.S. Silica announced two separate partnerships -- with S.H. Bell Co. and BNSF Railway -- to build silica sand storage facilities in East Liverpool, OH, and San Antonio, TX, respectively (see Shale Daily, Oct. 11, 2012; June 22, 2012). The Ohio facility accommodates barge and rail traffic to serve oil and gas customers in the Marcellus and Utica shales, while the Texas facility supports producers in the Eagle Ford Shale.

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