U.S. Silica Holdings, Inc. (NYSE: SLCA) announced today that the Company has entered into an agreement with Union Pacific Railroad (UP) to build a new, unit train capable silica sand storage facility in Odessa, Texas. In addition, the Company has completed modifications to its resin-coated sand facility in Rochelle, Illinois. These changes now enable the plant to ship raw sand to multiple destinations across the country. The plant will continue to produce resin coated sand for the oil and gas and foundry industries.
U.S. Silica and Union Pacific Distribution Services, a subsidiary of Union Pacific Railroad, plan to develop a 20,000-ton frac sand storage facility, which is expected to be operational by the end of 2014. U.S. Silica’s investment in this state-of-the-art, world class loading facility is approximately $12 million.
Bryan Shinn, U.S. Silica president and chief executive officer said the Company is “very excited to have the opportunity to work closely with Union Pacific to bolster our transload network and get our customers even closer to the wellhead in the Permian, which is one of the fastest growing shale basins in the country.”
Brad Thrasher, VP and General Manager of Industrial Products at Union Pacific said, “We are excited at the potential opportunities that will arise from the Odessa Transload facility. This will serve as a great outlet for continued growth in the Permian Basin.”
The modifications simply enable the facility to function, in part, as a transload as well as being unit train capable. The first unit train was shipped from Rochelle last month. Mike Winkler, U.S. Silica vice president and chief operating officer said, “Rochelle gives us a tremendous amount of flexibility to move material cost effectively to all of the major shale basins in the country while at the same time optimizing the utilization of this very important asset.”