Another contender enters Permian sand race

Unimin Corp ., a Connecticut mining company, plans to carve out as and processing plant in West Texas in a bid to supply drillers with lo calf rack sand. The sand plant, expected to come online early next year, will be the third major facility of its kind in the Permian Basin. Its rivals U.S .Silica and Hi-Crush Partners are also racing to construct sand production facilities in the region by early 2018.

That’ s because analysts expect half of next year’ s U.S. s and demand to come from West Texas, where oil companies have seen sand costs rise because of limited local supplies.

Local sand mines should be cheaper thando na train from fine-grains and mines in Wisconsin, which can cost $40 to $60 at on, or hauling it by truck for 200 miles from other mines.

“There aren’ t any sand mine sin the Permian Basin, so obviously transportation costs will be much lower ,” said Michael Lawson, a spokesman for U.S. Silica, which is investing $225 million in a West Texas sand plant that will produce 4 million tons of sand a year.

Unimin’ s facility will put out 5 million tons of sand a year, and it should be operational by early 2018, the company said.

The latest shale boom in the Permian and the drive to produce oil more efficiently inaner a of low crude prices have driven demand for sand, used in hydraulic fracturing to prop open hale rock through which oil and gas flows. Texas is already home to about 10 fracturing sand mines, becoming a player in an industry long dominated by Wisconsin and Minnesota sands.

Oil and gas producers are using up to 20 times more sand per well than they did during peak of the last boom. The largest wells now consume up to 25,000 tons—50 million pounds— of sand each, up from 1,500 tons, or about 3 million pounds, per well during the boom years through 2014.