Monday, December 09, 2013

CN adds frac sand producer in Wisconsin

Written by  William C. Vantuono, Editor-in-Chief

CN will start serving a new state-of-the art frac sand producer on its Wisconsin rail network beginning this month. Such industrial sands are used by the oil and gas industry in the hydraulic fracturing process to hold shale fractures open to let natural gas and crude oil flow out.

The production facility of Calgary-based Source Energy Services (SES), formerly Canadian Sand and Proppants, in Weyerhaeuser, Wis., is located on CN’s recently rehabilitated Barron Subdivision and will have an annual production capacity of 1.2 million tons of high-grade sands, rising to 2.0 million tons by the third quarter of 2014, CN said. In 2012, CN spent $35 million to restore a 40-mile segment of the subdivision between Ladysmith and Poskin, Wis., to better serve the frac sand market.

CN has 11 frac sand facilities on its network in Wisconsin, which the railroad said “is seeing a substantial increase in frac sand production because of its reserves of high-quality and in-demand sands.”

SES President and CEO Brad Thomson said his company’s partnership with CN “will advance our goal of becoming a major player in the frac sand industry. In conjunction with the opening of the production facility in Wisconsin, SES will also bring on-line the largest frac sand terminal in the Western Canadian Sedimentary Basin in Wembley, Alta., on CN’s network near Grande Prairie. With a loop track and on-site storage capacity of 40,000 metric tonnes of sand, this will be SES’s ninth and largest terminal on a network that spans North America, from Ft. Nelson, B.C., to Three Rivers, Tex. Working with CN will position us strongly in the frac sand marketplace with timely rail access to Western Canadian shales and other basins throughout the U.S. and Canada.”

“CN’s network is uniquely positioned to provide Wisconsin frac sand producers efficient access to key North American shale deposits,” said CN President and CEO Claude Mongeau. “In addition to our investment on the Barron Sub in 2012, CN accelerated work this year on the $33 million rehabilitation of 74 miles of track between Wisconsin Rapids and Blair, Wis. This will increase carloading capacity and train velocity for the growing frac sand supply chains. Over the past five years, CN’s frac sand market has grown by nearly 300%, rising to more than 50,000 carloads in 2013. Our end-to-end service focus has supported that growth, and we expect to achieve C$300 million in frac sand revenue by 2015.”