Dakota Plains Holdings Inc. (OTC: DAKP) and UNIMIN Corp. are building a frac sand storage and transloading facility at the Pioneer Terminal in New Town, North Dakota. The new facility will have a throughput capacity of approximately 750,000 tons per year. Construction is now underway and operations are expected to commence by January 2014.
The new terminal will supply energy service companies with frac sands sourced directly from UNIMIN's newest and largest proppant production facility in Tunnel City, Wisconsin. The fracturing sands will be transported on Canadian Pacific's (TSX:CP) (NYSE:CP) rail network. Under the terms of the agreements between the parties, UNIMIN will provide a direct marketing service to oilfield service companies and fund the construction of four new ladder tracks and a sand storage and transloading facility. Dakota Plains will provide a land lease to UNIMIN of up to 30 years, and Dakota Petroleum Transport Solutions LLC, a joint venture in which Dakota Plains holds a 50% membership interest, will provide fee-based transloading services. The facility will include 8,000 tons of fixed storage, twin high-speed truck loadouts, and track capacity for 70 loaded railcars.
Craig McKenzie, chairman and CEO of Dakota Plains, said, "This sand terminal complements the ongoing Pioneer Terminal expansion launched earlier this year, which is on schedule for a year-end startup, and launches an inbound oilfield supply service to the Bakken and Three Forks operators in the Williston Basin. UNIMIN will build four new ladder tracks, which leaves the existing four tracks at Pioneer available for further expansion of inbound and outbound services."
Lou Mastandrea, UNIMIN's executive vice president of sales and marketing, said, "UNIMIN is extremely well-positioned to provide direct and cost efficient proppant supply to the Williston Basin. Our Tunnel City plant is on schedule to begin operations at year-end, and will subsequently begin rail shipments to supply the Pioneer Terminal with UNIFRAC hydraulic fracturing sands. UNIMIN also will utilize the Pioneer Terminal to deliver its PROPSTAR resin-coated proppants to service companies in the region. We are pleased to partner with Dakota Plains in this venture and believe the Pioneer location in New Town, North Dakota, is ideally situated to respond to proppant requirements in the Bakken and surrounding areas."