Frederick, Maryland-based U.S. Silica announced plans Monday to build a new frac sand mine and plant in West Texas to serve the Permian Basin. The Permian has been growing steadily despite the recent oil slump, supported by increased production and recently discovered oil reserves by the U.S. Geological Survey at the end of last year.
The projected budget for the plant’s construction is $225 million, and it will be financed using cash on hand and cash flow from its current operations. U.S. Silica expects that long-term contracts with oil companies operating in the Permian basin will support the project into the future.
U.S. Silica projects the new frac sand plant will produce four million tons each year in an attempt to help meet the growing demand in the Basin. Construction will take place near the Delaware and Midland basins on a 3,200-acres site with good water availability and easy access to Interstate 20. The company’s press release stated the site has over 30 years of reserves of fine grade 40/70 and 100 mesh frac sand with “excellent physical properties.”
U.S. Silica is currently a leading silica sand producer for the oil and gas industry and other industries, with nine industrial sand production plants and eight oil and gas production plants.