Wednesday, July 18, 2012

CP, frac sand company announce pact

Written by 

Canadian Pacific and Smart Sand, Inc., Wednesday announced a strategic long-term partnership "under which the two companies will supply and ship premium, Northern White frac sand to the unconventional oil and gas industry in key North America producing regions (including the Bakken and Eagle Ford formations, and the Utica and Marcellus Shales)."

CP and Smart Sand also announced the partnership's first initiative: building a new frac sand transload facility, expected to be the region's largest, in Makoti, N.D., that will serve the Bakken formation in the Williston Basin beginning in early 2013. North Dakota has seen extensive oil and gas development activity.

"We are excited to partner with transportation leader Canadian Pacific to bring our combined expertise to those companies working in the Bakken Shale formation," said Charles Young, founder, president and board member of Fairless Hills, Pa.-based Smart Sand. "Smart Sand offers substantial dry sand capacity and 100-plus years of proven reserves, plus direct rail access for unit trains. We believe the new North Dakota transload facility offers a unique combination of cost effectiveness, reliability and product flexibility. We look forward to offering similar services in other producing regions while building strong relationships in the Williston Basin."

"Smart Sand has prime resources and processing capabilities which align well with CP's shipping presence in the energy sector. This agreement with Smart Sand demonstrates our commitment to provide our customers with end-to-end transportation service that is competitive and reliable," said CP Executive Vice President and Chief Marketing Officer Jane O'Hagan.

Smart Sand's primary facility, which opened in late June 2012 and is located on the CP rail line in Oakdale, Wis., will supply premium Northern White frac sand in a broad range of mesh sizes to the new transload facility. Based on Smart Sand's initial processing capacity of more than one million tons per year, plus the company's extensive proven reserves, the facility will be able to quickly fulfill long- and short-term orders while providing direct rail access for unit trains.

CP says it is the only North American railroad to serve the Bakken Formation, covering portions of Saskatchewan, Manitoba, Montana, and South Dakota in addition to North Dakota, and the U.S., the Alberta Industrial Heartland, and the Marcellus Shale formation in the U.S. Northeast (roughly from West Virginia through Pennsylvania and into New York, and including a portion of southern Ontario).