Any geologist can tell you that all sands are not created equal. The typical landowner, however, doesn’t always know that fact. Because of hydraulic fracturing, the oil and gas industry is in the middle of a boom, which means related suppliers, vendors and consultants, have seen the same bump in business.
According to Lee White, president of Del Sol Industrial Services, news reports of sand used in hydraulic fracturing resulted in a kind of gold rush in the industry. While some may have the real deal sitting on their property, others are handling “fool’s sand.”
“We spend a great amount of time educating potential clients,” White says. “There are several different types of sand in the world. There’s a lot of sand, but not all of it is frac sand. Frac sand is special in nature and has certain properties that need to be met. What’s happened during this gold rush is anyone who has any sand thinks it is frac sand. But frac sand is not created equal.”
For the past 20 years, long before the boom in hydraulic fracturing, Del Sol Services launched as a sand specialist. The company’s turnkey services include testing sand to assess its suitability for hydraulic fracturing and market value of a client’s product and consult them on the profitability margins of selling their sand to a processor or processing it themselves. It also specializes in engineering, design and construction of frac sand processing plants.
Del Sol’s one-stop-shop services also include the manufacturing and procurement of processing equipment. Del Sol handles the manufacturing of certain tools like conveyors and elevators, and works with specialized vendors for equipment like dryers and screeners.
“When we sell a plant, it’s the landowner’s responsibility for making sure the utilities are on the property line and that permits are in place,” White says. “But from there, we offer a turnkey solution. We do the entire design, building and startup and hand them the key for the plant.
“Normally, if it’s a processing mining company, they have process engineers involved throughout the design/build process, and that’s the way we prefer it,” White adds. “When there’s a person on their side learning the plant as it is built, they have a better understanding of what’s going on in the facility.”
White says as the frac sand market matures, the industry is beginning to sift through quick opportunists and long-term players. A few years ago, demand outweighed supply causing frac sand to reach upwards of $130 per ton. Now that more long-term players have come online and short-term players are exiting the market, it has stabilized at around $55 per ton and could potentially return to pre-boom prices of $35 per ton.
“We knew that the Wild Wild West to this business would be short-lived,” White explains. “We knew it wouldn’t always be a gold rush, and we knew the price wouldn’t always be increasing. Business hasn’t stopped, but the prices have come down so those still here are in it for the long haul.”
No matter the client – professional mining company or entrepreneur – Del Sol Services always builds for the long haul. A single grain of sand may be an indiscernible speck, but together, those grains form an important material in the hydraulic fracturing industry. White says Del Sol’s plants are built to last 20-plus years, which requires a design specialized to the particular sand and type of processing. It also requires defect-free and robust equipment.
“Our plants are not the cheapest,” White says. “Cheap plants are slapped together. I’ve heard of plants coming apart in two to three months. These guys spend millions and deserve something that will stay together.”
Del Sol’s plants do have long lives, but as companies expand, or invest in upgrades for quality control or throughput, Del Sol is able to help its clients reach the next phase of business. Del Sol’s consulting services advise clients on what they can do to achieve process improvements.
“In the U.S. market, the phone calls have slowed down, but the number of real inquiries is the same,” White says. “Over the long term we’ll be working on new plant development and as the requirements for frac sand increase, processing companies will want to make plants better.”