Friday, June 22, 2012

CP, U.S. Silica set frac sand pact

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Canadian Pacific and U.S. Silica Holdings, Inc. Friday announced a multi-year agreement for the movement of frac sand from U.S. Silica's newest mining and processing facility in Sparta, Wis., as Class I railroads continue expanding their services in the energy field.

U.S. Silica is building a new frac sand facility located on the CP's rail line in Sparta that will produce high quality Northern White sand for use in shale basins across the United States and Canada. A primary market target is the Bakken shale formation in North Dakota, where U.S. Silica seeks to support the state's "growing need for proppant." A proppant is a material which aids in keeping an induced hydraulic fracture open to facilitate energy retrieval.

Under the agreement, CP will become the exclusive rail service provider at the Sparta facility, which will produce and ship three different grades of dry sand and is expected to be fully operational in the first quarter of 2013.

U.S. Silica's President and CEO Bryan Shinn said the company is "very excited to partner with the Canadian Pacific to further enhance our extensive logistics capabilities. We plan to deliver unit trains of high quality frac sand into the Bakken shale and other basins throughout the U.S. and Canada. This new partnership will provide U.S. Silica greater access to critical, rapidly growing markets, and will significantly strengthen our overall offering."

"Canadian Pacific has proven expertise and has been serving the energy industry in North America for many years. We are pleased to continue to grow this important market through our partnership with U.S. Silica," said CP Executive Vice-President and Chief Marketing Officer Jane O'Hagan. "CP's agreement with U.S. Silica is an important component of the railway's growing energy strategy, which focuses not just on outbound crude oil, but also on the flow of input materials into shale and other energy developments."