In South America, sand shoveled out of a river in Argentina that is used to transport soybeans may soon reappear 700 miles away in the country’s booming shale fields, according to a report on Bloomberg.
Tecpetrol SA started buying sand that Belgium’s Jan de Nul hauls from banks on the Parana River to frac for natural gas in Vaca Muerta, a Maryland-sized shale formation in Patagonia.
For Jan de Nul, which has been dredging the river since 1995 to make room for soy cargoes, the shale industry is emerging as a lucrative side business. River sand in Entre Rios province is just right for hydraulic fracking, where a mix of water, sand and chemicals is pumped at huge pressure to crack rock deep underground. That’s because it’s mostly made of highly resistant quartz.
Jan de Nul is working with other sand companies operating on the river that typically supply the construction industry. It expects approval within a week to dredge the banks to feed a plant in Entre Rios, where it dries and sieves the sand. Jan de Nul’s not allowed to sell the silt it churns out of the river channel. Argentina is the biggest shipper of soy meal and oil.
The agreement between the dredger and Tecpetrol runs for a year from January and covers as much as 70,000 metric tons.
Drillers need about 6,000 tons of sand for each shale well. At about $180 a ton, including $70 of trucking fees, the contract is worth $12.6 million. For Tecpetrol, that’s a good deal, especially since it is a major cost for shale drillers.
Companies in Vaca Muerta, where Argentina is trying to replicate the success of the Permian Basin in the United States, pay closer to $200 a ton for domestically sourced sand. Sand shipped from the United States costs as much as $300 per ton.