US Silica Holdings is ready to commence the construction of a new $225m frac sand mine and plant in the Permian Basin region of West Texas, in a bid to support future well completions.
The new facility will have a production capacity of around four million tonnes annually.
Set to be funded using cash on hand and cash flow from operations, the new project will be supported by long-term supply contracts with oilfield companies.
It is being taken up as part of the company's previously announced plan to add about eight to ten million tonnes of new Brownfield and Greenfield capacity to cater to the rising frac sand demand.
The company noted that the 3,200-acre site has more than 30 years of reserves of fine grade 40/70 and 100 mesh sand.
US Silica Holdings president and CEO Bryan Shinn said: "We believe we've selected one of the most advantaged sites in West Texas with good availability of water, easy access to Interstate 20 and a location that is equidistant to the hearts of both the Delaware and Midland Basins.''
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By GlobalDataConstruction on the project will commence immediately and initial production is expected in the fourth quarter of this year.
The company is planning to sign similar agreements for other capacity expansion projects currently underway.
US Silica Holdings produces commercial silica used in the oil and gas industry, with its proppants used in unconventional sectors such as tight gas, coal bed methane, shale gas and liquids.
