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Rail News Home Rail Industry Trends

10/2/2014



Rail News: Rail Industry Trends

NGL Energy builds crude transload facility in New Mexico; Wildcat MInerals opens frac sand transload facility in Ohio


NGL Energy Partners L.P. today announced plans to build a crude oil transloading facility capable of handling unit trains near Albuquerque, N.M., in the San Juan Basin.

To be served by BNSF Railway Co., the terminal will be built on a 256-acre site by third-quarter 2015. The facility will have an initial outbound capacity of two unit trains per week, be able to store 240,000 barrels of crude and feature multiple inbound truck unloading bays.

Meanwhile, Wildcat Minerals on Monday announced it opened a frac sand and proppant transloading facility in Hannibal, Ohio, in the Utica Shale.

The facility enables the company to store more than 10,000 tons of proppants, and receive unit trains and barges, Wildcat Minerals officials said in a press release. It's the firm's first transload terminal in Ohio and first barge-capable facility, said Co-Founder and Chairman Steve Herron.

"Wildcat's expansion into the Utica further increases our national footprint," he said.

In terms of the overall strong frac sand market, robust growth in sand demand is driving a dramatic increase in the North American proppant market, according to a second-quarter market report recently published by PacWest Consulting Partners.

Proppant demand is expected to grow 23 percent annually through 2016, driven primarily by a 24 percent-per-year gain in frac sand purchases, the report states.

PacWest expects proppant logistics to continue to be challenging through 2016, leading to significant price increases. Frac-sand market constraints can be attributed to rail-car shortages and built-for-purpose frac sand truck trailers, among other factors, the report states. But there should be logistical improvements by 2015, PacWest officials believe.

"The remainder of 2014 could be challenging due to pressure on rail from a bumper agricultural harvest, low coal inventories, and increased crude by rail, chemicals and lumber shipments," said Samir Nangia, a PacWest principal, in a press release. "Any weather-related events will only exacerbate the situation due to a lack of sufficient in-play storage."



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