Victory Silica has big plans for newly acquired Seven Persons frac sand facility
STACEY LEE
Decommissioned in 2010, the Seven Persons recycling facility has been given a new lease on life.
The now quiet 3R Sand facility is about to undergo $3.5 million in upgrades and minor reclamation to meet Energy Resources Conservation Board approval requirements. It is expected to be producing high quality frac sand to industry as early as summer 2013.
“This facility was a casualty of the success of shale gas,” says Ken Murdock, Victory Silica Ltd. CEO. “That success suppressed the price of natural gas to the point that shallow gas isn’t being developed. Because that facility formerly recycled shallow gas water based frac demand dwindled.”
VSL, a new company created by mining company VNI, acquired the plant for $710,000 from creditors in early January 2013. Despite a $10,000 deposit paid upon signing of the agreement the deal won’t be final until reclamation of the site has been completed and the ERCB reclassifies the facility.
“The original feed stock for the Seven Persons facility was blow back sand, deemed by the ERCB to be oilfield waste, it currently operates under a very restrictive license,” Murdock says. “We are waiting for the final documentation on the level of clean up required. Once we’ve got that we can move forward.”
The facility itself will undergo a transformation and an increase in production.
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“Spending $3.5 million to upgrade this facility is fairly reasonable,” says Murdock. “What we are doing is putting in a screen tower because we are going to be processing about six different products. We’ll need individual silos for each product as well as to expand one of the existing buildings to accommodate additional dry storage.”
The existing wet plant has a capacity of 120,000 tones per annum (tpa) and VSL's vision sees the plant increase production capacity to 400,000 tpa. Materials destined for the mine will come from VNI’s Minago sulfide nickel deposit (mine) near Thompson, Man. and sources in Wisconsin.
“At Minago we have access to one of the highest qualities of domestic sands (an estimated 14 billion tones) available and we are going to mimic that with the highest quality import sand — offer a full suite to our customers,” he says.
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As part of its long-term plan VNI endeavor to open a larger processing facility near Winnipeg where sands from its Minago mine will eventually be processed. Murdock says, however, the Seven Persons facility will always have a future.
“One of the best not-kept secrets in the country is the Alberta Bakken, the tip of which lies only about a mile south of the Seven Persons plant,” says Murdock. "It is a shale oil play and it will inevitably see further development. When that happens there will be even more work for the plant."
The announcement positions the facility, under VSL, to become the largest employer in the small community.
“The plant has been operational since 2000 and the maximum staff in the past was just under 20. By pushing it to 30 or 32 we will be growing a bit,” Murdock says. “It will be nice to give some of the people who live there an opportunity to work locally again.”
10 THE WESTERN CANADIAN PIPELINE | WINTER 2013
41137745•01/31/13
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