Permian Frac Sand Miner Eyes Return After Texas Fire

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Atlas Energy Solutions, a provider of frac sand for the shale industry, said its mining facility in Kermit, Texas, will resume operations this week, days after a blaze shuttered the site.

Atlas reported a fire erupted at its mine in Texas on April 15, shuttering the complex. The company operates a dozen proppant facilities across the Permian, churning out primarily fine-grained sands used in hydraulic fracturing.

The company said the April 15 fire affected the feed system at the Kermit Dune facility, which caters exclusively to Permian operators in Texas and parts of New Mexico.

"While we work hard to ensure events like this do not occur, we are focused on safely returning the facility to operation as soon as possible," John Turner, the company's top executive, said on April 18. "In addition, benefitting from our differentiated scale and associated geographically distributed proppant production operations, we are continuing to support our customers' ongoing needs."

The feed system transports sands from dryers and separators to storage silos. The company said it would need to rebuild the full system, an operation that should be completed by the end of the second quarter.

Atlas said it was still assessing the total costs necessary to repair the system. It needs to return the necessary equipment to the facility in order to resume operations at full capacity.

"The team began moving temporary loadout equipment to the Kermit facility within 48 hours of the incident," the company explained last week. "The facility remains closed and initial restart of operations is expected at the beginning of next week."

Frac sand is used as a proppant, meaning it helps prop open the pores in the shale basin that are opened through mass injections of water and trace chemicals.

Before the pandemic, Black Mountain Sand, a Permian-based frac sand supplier, estimated that per-well sand use more than doubled between 2014 and 2018, from 1,000 pounds per lateral foot in 2014 to 2,250 pounds per lateral foot in 2018. Total consumption in the Permian also more than doubled during the period.

Atlas has a portfolio of smaller grains, so-called 100 mesh. Those sands in theory penetrate more deeply into the shale formation and open more pores.

"Once the facility is restarted and the temporary loadout equipment is fully operational, we expect to fulfill all Kermit facility customer commitments with sand produced and loaded from that facility," it said.

Kermit was brought online last year. Atlas said separate operations were unaffected by the fire.

Atlas' recorded total sales for 2023 increased by 27% relative to the prior year to reach $614 million from a sales volume of 11 million tons. Net income of $226.5 million marked a 37% improvement over the prior year.

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