Smart City

Industrial IoT News

Industrial IoT Home

GlobalData Study Says Pipeline Bottlenecks Can Create Oversupply of Sand, Affecting Mine Revenues

By Ken Briodagh
October 09, 2018

According to a recent study by data and analytics company GlobalData on the mining industry, overabundant sand in Permian might cause trouble in the near future.  

Svetlana Doh, Oil and Gas Analyst at GlobalData, offered her view on the impact on the upstream sector. “Rapidly growing sand demand in Permian is raising questions on whether there will be enough supply of proppant available,” said Doh. “It is estimated that the total sand consumption in Permian will reach more than 77 billion pounds this year. The demand growth is mainly due to increased wells lateral length and larger amount of proppant injected per well, which grew by more than 70 percent in the last three years.”


The report said that the share of locally produced sand is expected to grow to more than 40 percent, increasing the competition to the white sand supply from upper Midwest to the Permian. In fact, there are at least five sand mines opened in Permian by Hi-Crush, Black Mountain and U.S. Silica in 2018 with a proppant supply of 35 billion pounds per year. Many more mines are expected to be opened soon, which will likely solve the basin’s sand shortage problem over the near future.

“Despite the worse quality of regional sand, it is much cheaper, and operators choose to mix it with premium white sand to keep their costs down,” Doh said. “In fact, Pioneer Natural Resources acquired an interest in U.S. Silica’s La Mesa sand facility, which is expected to provide the operator with four billion pounds of sand per year by 2020. However the ample local sand sources can easily translate into an excess supply whenever drilling activity reduces its pace due to the logistic bottlenecks in the Permian basin. If this is persistent sand prices will fall benefiting operators that don’t face any pipeline restriction.”


Ken Briodagh is a writer and editor with more than a decade of experience under his belt. He is in love with technology and if he had his druthers would beta test everything from shoe phones to flying cars.

Edited by Ken Briodagh

Editorial Director

SHARE THIS ARTICLE
Related Articles

myDevices and Arm Partner to Simplify IoT

By: Ken Briodagh    10/18/2018

Combining myDevices' IoT in a Box technology with Arm Pelion IoT Platform creates an easy onboarding experience while providing enterprise-grade IoT c…

Read More

Preparing to Integrate IIoT: How Controls, Automation, and Instrumentation Can Help

By: Special Guest    10/18/2018

As advances in technology make it more cost-effective to deploy IIoT, industries will need to acquire a strategic approach to integrating new sensor d…

Read More

KP Performance Antennas Launches ProLine Series Supporting Frequency Ranges of 2.3 to 6.4 GHz

By: Ken Briodagh    10/18/2018

New Antenna Line Designed for High Density Deployments Boasts Industry-Leading F/B & Side Lobe Suppression

Read More

IoT Time Podcast S.3 EP.36 Teradata Analytics Universe

By: Ken Briodagh    10/17/2018

On this episode of IoT Time Podcast, Ken Briodagh sits down at Teradata Analytics Universe and chats with TUN Challenge award winners from Loyola Univ…

Read More

RoboticsX Opens New R&D Facility in Slovenia

By: Ken Briodagh    10/17/2018

According to a recent announcement, RoboticsX has opened a new research and development center in Ljubljana, the capital of Slovenia.

Read More