Frac sand: CN begins to serve another Wisconsin plant; Claim Post touts Manitoba reserves

CN and Northern Frac Proppants II L.L.C. on Friday marked the opening of a frac sand plant in Alma Center, Wis.

The Class I now serves 13 frac sand mines that produce more than 10 million tons annually. The new Northern Frac Proppants plant — which is located on CN's rehabilitated Whitehall Subdivision — is projected to produce 1 million tons of sand annually.

CN is noting a substantial increase in frac sand production on its Wisconsin network because of the region's reserves of high-quality and in-demand sands. The railroad expects to complete a multi-year, $36 million upgrade of the Whitehall Subdivision between Whitehall and Wisconsin Rapids, Wis., by December as part of a plan to better serve the frac-sand market.
 
"CN is well positioned to help its frac-sand customers compete in their end markets, with rail access to the largest North American frac-sand consumption regions, including Western Canada, Texas and Marcellus shales," said CN President and Chief Executive Officer Claude Mongeau in a press release. "As part of our supply chain collaboration focus to expedite transit times, CN recently launched unit train frac-sand service between Wisconsin production facilities and distribution centres in the Western Canadian Sedimentary Basin in northwestern Alberta and northeastern British Columbia."

CN expects to generate frac sand revenue of $300 million (in Canadian dollars) and traffic totaling 82,000 carloads in 2014 compared with $200 million and 55,000 carloads in 2013. Aggregate frac-sand consumption is expected to reach 78 million tons by 2016, representing a 22 percent compounded annual growth rate between 2013 and 2016, CN officials said.

Meanwhile, Claim Post Resources Inc. last week announced that test results of sand samples taken from it Seymourville Frac Sand Project in Manitoba show the sand's quality nearly compares with Northern White Sand produced mainly in Minnesota and Wisconsin.

Located about 122 miles northeast of Winnipeg, the Seymourville frac sand deposit is about 600 miles closer to the Canadian market than Wisconsin sand deposits, providing significant transportation savings for the Canadian oil and gas industry, Claim Post officials said in a press release.

The company is evaluating a transload facility at the Winnipeg site that would accommodate unit-train loading and access to CN, Canadian Pacific and BNSF Railway Co. lines. In addition, Claim Post plans to provide bulk truck or container service to the oil industry in Manitoba, Saskatchewan and the U.S. side of the Williston Basin.