Demand for raw fracturing sand is forecast to increase by more than 4% per year to almost 100 billion pounds in 2021, according to a recently released study by industry research firm, the Freedonia Group. In value terms, raw fracturing sand is expected to grow at a 10% annual rate to more than USD 3 billion in 2021, which reflects substantial gains in average prices and volume levels.
The study, titled Proppants Market in North America, presents historical data from 2006, 2011, and 2016. It forecasts to 2021 by type—including raw fracturing sand, resin-coated sand, and ceramic proppant—and market location in pounds and US-dollar values. The study also evaluates key industry players.
Raw sand demand is expected to grow in the United States and Canada, with the US being the principal user at a market share of 88% in 2016, the study said.
Healthy growth is forecast for all types of raw fracturing sand, although Northern White and Brady sand are expected to see competition from new mines opening in west Texas. Growth will be driven by robust gains for this other raw sand, which is expected to show increases of 12% per year through 2021.
Although other sand has been mined in states such as Arizona and Ohio, sand mined in west Texas has recently shown strong market growth among major suppliers because of the source’s proximity to US unconventional development activity in the Permian Basin. The study noted that suppliers Hi-Crush, Unimin, and US Silica have made recent investments in newly discovered west-Texas sand sources.
As oil prices have appeared to stabilize and drillers continue to achieve new efficiencies, well completion activity has been recovering and is projected to grow through 2021. While the number of completions is not expected to reach levels seen before the price collapse, sand demand is getting a boost from increased proppant loadings per well, the study said.
The volume and density of proppants used in hydraulic fracturing continue to rise, with technology improvements frequently calling for higher proppant levels. Unconventional wells are now seeing an average of 10 million lbm of proppant pumped per well. In transport capacity, that is equivalent to delivery loads of 100 rail cars and 400 trucks of sand, according to the study.
Raw fracturing sand continues to gain market share from resin-coated sand, ceramic proppants, and other specialty proppants, the study said.
With the low oil price and greater proppant volumes needed in today’s completions, customers are seeking the cheapest proppants available that can meet the standards and characteristics needed under expected well conditions. Raw fracturing sand, the study said, is by far the most economical proppant for the majority of wells likely to be drilled.
Demand for Raw Fracturing Sand Set for Healthy Growth
Joel Parshall, JPT Features Editor
18 August 2017