The pace of change in the frac sand industry has been remarkable. It has to be a little bit scary for those who have invested a lot of time & money into a frac sand solution (supply, supply chain, logistics, etc.) to see the rapid changes in the supply chain. No one wants to get left behind as major players make big decisions regarding the proppant supply chain. Let’s do a quick review of how we got here:
First, we have the dramatic change in volume. The jump in frac sand demand is a combination of the increased activity in U.S. onshore development (which is driven by increased efficiencies in the process), and the dramatic increased in sand-per-well (resulting from both proppant intensity per well and much longer laterals). That is a great problem to have (for those in the frac sand world) and has resulted in a spike in investments in proppant supply.
Next, as we discussed at the 5th Annual Frac Sand Supply & Logistics Conference in San Antonio last October (back before activity had ramped up!), the increased proppant volume per well was going to cause problems in last-mile logistics. Trucking issues, storage issues, demurrage, etc. At that point, it looked like some players were going to opt for containerized solutions (Sandbox, ArrowsUp, etc.). That certainly picked up quickly in the last 6 months.
And this year, suddenly we have a bunch of sand coming online in the Permian Basin. How that impacts the industry will be determined by performance, but it could be a game changer.
And on top of all that, the OPEC uncertainty is always out there, impacting oil prices. If prices get high enough, we could see frac sand demand sky rocket in other plays too, which would ease anxiety a bit for those invested in continued demand for Northern White sand.
So what is a company in the middle of the supply chain to do? How do you keep from getting overlooked and left behind?
I’d recommend you stay up to speed on what is happening and figure out where you can play a role. In addition to the Frac Sand Weekly News Digest, you want to be reading Infill Thinking’s work, Fuel Fix, E&P Magazine, etc. Then reach out to those companies who have announced new projects or changes to their process. Remember that the decision makers are just regular people too, trying to find the right partners and solutions. Tracking down their email address and shooting them a note to introduce yourself can really help. Don’t assume they will find you if they have a need for your services. When they announce changes, they often have a big picture vision, but they might not yet have figured out all the details…which could be solutions you provide. Share some insights for them in your field of expertise, it might be just what they are looking for at that moment.
And, of course, try to meet them face-to-face when you can. Grab coffee with them or set up a meet & greet if you are both going to be at the same conference. For example, if you see someone will be speaking at the 6th Annual Frac Sand Supply & Logistics Conference, and you are going to be there too, send them a note and see if you can get 5 minutes with them. Putting a face to a name and establishing those personal relationships can make all the difference.
Best of luck navigating all these changes! I look forward to seeing you in Houston this September, for both the Frac Sand Equipment Expo and the 6th Annual Frac Sand Supply & Logistics Conference!