Proppants: Where in the World

Abstract

With the rise in hydraulic fracturing over the past decade has come a steep climb in proppant demand. Global supplies are currently tight. The number of proppant suppliers worldwide has increased since 2000 from a handful to well over 50 sand, ceramic proppant, and resin-coat producers. The estimated amount of proppant used has grown tenfold since 2000, when little more than 3 billion lbs was supplied, according to research by PropTester and Kelrik. Circumstances appear favorable for those seeking to enter the market. However, gearing up to take advantage of these propitious conditions represents a daunting task, requiring coordination of complex logistics, material resources, and processing knowledge, as well as a substantial capital investment in processing and material handling facilities. The price proppant manufacturers can charge must be figured in to the overall cost of producing a well, which in the Bakken, for example, can be approximately USD 6 million, with proppant representing about 5% of well costs. Since a majority of proppant is currently used in fracturing unconventional gas wells, depressed natural gas prices tend to keep a cap on the prices proppant suppliers can demand. However, as hydraulically fractured wells proliferate, a growing body of data is continually being generated to aid in the creation of targeted fracture stimulation plans, with more highly engineered stages—boosting the demand for greater volumes of proppant—being performed per well to maximize production. For example, a typical Barnett Shale well would in the early 2000s have consumed approximately 300,000 lbs of proppant. The longer horizontal wells drilled today, produced with often 20 or more stages, might consume 3 to 5 million lbs. Still, proppant supplier margins are relatively slim, requiring the steady, high-quality production and distribution of large volumes to sustain a profitable enterprise. Proppants: Earth to Earth The journey of an individual grain or bead of proppant is a circular one, making its way from its origins as a substance mined from the Earth to its final destination deep within the Earth in the far reaches of the filigree-like or dendritically shaped fractures emanating from the long horizontal borehole. It is the only substance operators want to remain downhole following a successful hydraulic fracturing treatment and performs the vital function of propping open the fractured formation to promote the economic flow—or conductivity—of hydrocarbons in the ensuing months and years over the well’s productive life. The primary order of business for a proppant facility, therefore, is choosing the optimum location—preferably one close to both raw material supply and end-user. The immediate proximity of railcar and possibly barge transport is critical, as well as a good road system and the availability of a reliable trucking fleet.