Mill Creek Sand and Gravel/Peaksie Minerals
Issue Spring 13
Sand has many uses, and Mill Creek Sand and Gravel has been providing it since 1978. Joined in 2003 by its sister company Peaskie Minerals, the two provide sand to projects throughout Western Canada, as well as Montana and North Dakota.
Family owned and operated, Mill Creek Sand and Gravel was originally purchased by John Oleksyn and his sons Nelson and Shane. Now owned by the five brothers – Nelson, Shane, Tim, Mark and Jason, with John as a director without ownership interest – the company founded Peaskie Minerals to take advantage of the boom in demand for proppant sand used in hydraulic fracturing of natural gas and oil wells. It now employs a staff of 60.
That sand accounts for more than half of the companies’ combined business, estimates Director Shane Oleksyn. The rest of the company’s sand is used in water treatment, concrete, golf courses, stucco, playgrounds and around liquid storage tanks. Its gravel, rock and aggregate is employed in concrete, landscaping, roadways and construction.
Peaskie’s proppant sand is used in natural gas wells that are between 3,000 to 6,000 feet deep. The company’s sand has high strength and is ISO-approved for use to 6,000 psi. It is given a 6K valve rating by Stim Lab and has a 0.7 sphericity. Oleksyn says gas wells at lower to intermediate depths can perform very well with Peaskie frack sand because of the strength of conductivity provided by the shape characteristics. For deep wells in excess of 7,000 feet, Peaskie offers an Ottawa white sand.
“At lower depths and closure stresses, sand with less sphericity can maximize conductivity by providing more spaces between the individual kernels and therefore more conductivity,” Oleksyn explains. “The whole idea is about producing a better gas well.” In today’s environmentally aware industry, fracking reduces the ecological footprint to 10 percent of what it was, due to directional drilling.
“We have a large facility very well situated in the dead center of the Montney play, so our sand is very easy to access,” Oleksyn adds. The company’s mine near Opal, Alberta, is four hours from the Montney natural gas play and has enough railroad siding for more than 75 hopper cars loaded with the sand.
Peaskie’s sand is approximately 96 to 98 percent quartz. It is processed at the main mine in Opal and is sent through a four-wash process. “We don’t bring water in from the river,” Oleksyn says. “The water is 6 feet below the surface, so we will have several very large ponds.”
The mine has been in operation for approximately 50 years, and all the water in the ponds is recycled. All the washing of sand is performed outside. “The water comes in from one pond – which might be at least 20 acres in size – and goes into another one,” Oleksyn explains. “Then we’ll have roads across it which act as filters or dikes. The water flows through those and is cleaned again and keeps on going through that. We use a natural filter that way.”
The sand is screened and sized for different industries in three buildings and then stockpiled outside for a few weeks to let the water flow out of it and back into the ponds. “We also have a dewatering process that removes water,” Oleksyn continues. “It still comes out wet.”
Then the sand is transported to the company’s final processing plant that Oleksyn estimates covers eight to 10 acres. It is dried and screened to ISO frac-recommended sizes. Several buildings are employed in sand processing. Oleksyn estimates the main processing plant for the sand is at least five acres in size. The company’s new maintenance shop measures about 20,000 square feet.
The washing processes are accomplished primarily outdoors, so in Alberta, they are started in April and finished Nov. 1 of each year. “After that, the cost of washing would be prohibitive,” Oleksyn explains.
Screening to Size
The proppant sand is screened to four different sizes for all the major companies that are involved in hydraulic fracturing of natural gas and oil wells. “Every industry has different size requirements,” Oleksyn adds.
Proppant sand is stored in several locations. Oleksyn estimates at least 20,000 tons are stored at the main plant, another 10,000 tons in storage facilities at the Montney play that the company owns and at Horn River near Fort Nelson.
At the Montney play, Peaskie converted 110-foot-tall concrete silos formerly used for grain storage to hold up to 8,000 metric tons of sand. Oleksyn plans to increase storage at that facility to 30,000 metric tons. Sand also is stored with a third-party company in Grand Prairie, Red Deer and Medicine Hat, Alberta; and Lampman, Saskatchewan.
Oleksyn sees the hydraulic fracturing industry in 2013 coming out of a correction during its four-year business cycle in which the last half of 2012 was slow. “We’re invested heavily in the natural gas industry, and it looks very good,” he concludes. “Since we’re a family business, we’ve always dealt with a handshake, and to us, it still means something. Most of our customers have been with us for 20 years. A lot of companies would rather deal with a smaller company where integrity is more than a marketing slogan.”