Petroleum Connection Logo
Layout Options

Excerpt From TPH Energy Morning Note On Friday February 16

Q1'18 Sand Delivery Issues (Part I)

Sand rail constraint rumblings real but magnitude may be overblown

Sector:Oil Service | Ticker: OSX | Recommendation: NA | Target: NA | Close: $136.55

Yesterday HAL noted sand delivery constraints associated with the Canadian National Railway (“CN”) are impacting activity (i.e. cold weather impacting ability for unit trains to brake effectively). We reached out to a few industry participants and Q1 weather issues, and avalanche/derailment, strong grain demand (competition for rail access), and cold weather do seem to be having some effect on shipments. We also note the Canadian Pacific may have seen some intermittent issues.

 

 

Q1'18 Sand Delivery Issues (Part II)

So who (of the sand producers) has exposure here?

Sector:Oil Service | Ticker: OSX | Recommendation: NA | Target: NA | Close: $136.55

The sand market appears tight Q1'18, but some (possibly much) of the constriction stems from supply/demand preference mismatch (i.e. mesh-size). 100-mesh allegedly what's seeing particular tightness, ironic given that's primarily what in-basin, Permian is primarily comprise of. A private sand producer we spoke to with an attractive logistics footprint noted some recent shipment issues but the delays sounded manageable. FMSA and SLCA appear to be the sand producers with the least potential exposure to these issues while SND, HCLP and EMES all have material CN and CP rail access. Sidebar but also of note, we've now picked up multiple data-points indicating potential turbidity issues with local sand...stay tuned for more on that front.



Other Posts You May Be Interested In

Frac Sand Supply & Logistics Conference – nearly here! Registration Closing. No on-site registration.

Posted on October 16, 2018

We are only a week away from the 7th Annual Frac Sand Supply & Logistics in San Antonio! Due to capacity limitations at the...

Book Your Hotel Room for the 7th Annual Frac Sand Supply & Logistics Conference

Posted on September 25, 2018

Several of the room blocks for attendees of the 7th Annual Frac Sand Supply & Logistics Conference expire this week. While...

Sponsorships Sold Out for the 7th Annual Frac Sand Supply and Logistics Conference

Posted on August 28, 2018

The Petroleum Connection today announced that all sponsorships are sold out for the 7th Annual Frac Sand Supply & Logistics Conference. “We're ...