01 Aug Discover the Frac Sand Trends that are Shaking the Industry
You already know: the frac sand market is changing fast, especially in the Permian Basin.
These are some of the frac sand trends you should be watching closely, as well as some great opportunities to save money.
Local Sand Use Increasing
In the Permian Basin, frac operators have been using Northern White for years. With its purity and sphericity, Northern White has been a superior proppant. But that’s changing fast.
Moving sand is expensive.
The ever-growing amount of sand needed for today’s frac operations means more sand needs to be transported than ever, and logistics accounts for around 75% of the total cost of delivered Northern White. That’s up to $80 per ton just in rail transport and transloading. Using local sand cuts all of that out.
And local sand will get even cheaper.
Future of Local Sand
PLG Consulting projects two waves of local sand cost savings over the next couple of years:
First, dropping rail shipping will instantly save $50-60 per ton. With about 6,000 tons used per well, that’s a total savings of $330,000 per well!
Second, there is a boom in local sand mining.
10 Permian mines are active now, and another 8 are announced. With the growing supply, market prices should stabilize and actually drop once supply has increased enough. That’s an additional $100,000 in cost savings per well.
With these factors combined, PLG Consulting projects that local, Permian basin sand could compose most of Permian proppant supply by the end of 2018
All of these savings from using local sand can get wiped out quickly with last-mile costs.
Browse our sand delivery systems now, or call us today for more information at 800-231-8198.