Canadian Pacific Railway Limited and U.S. Silica Holdings, Inc. (NYSE: SLCA), today announced a multi-year agreement for the movement of frac sand from U.S. Silica’s newest mining and processing facility in Sparta, Wisconsin.
U.S. Silica is the second largest domestic producer of commercial silica, a specialized mineral that is a critical input into oil and gas shale production and various industrial and specialty products. The Company is building a new frac sand facility located on the CP’s rail line in Sparta, Wisconsin that will produce high quality Northern White sand for use in shale basins across the United States and Canada.
Under the agreement, CP will become the exclusive rail service provider at this facility for the movement of U.S. Silica’s frac sand to destination markets. The design of the Sparta facility will allow U.S. Silica to build unit trains of frac sand with a focus on shipments into the Bakken shale in North Dakota to support the area’s growing need for proppant. The facility will produce and ship three different grades of dry sand and is expected to be fully operational in the first quarter of 2013.
Bryan Shinn, U.S. Silica’s President and Chief Executive Officer, said the company is “very excited to partner with the Canadian Pacific to further enhance our extensive logistics capabilities. We plan to deliver unit trains of high quality frac sand into the Bakken shale and other basins throughout the U.S. and Canada. This new partnership will provide U.S. Silica greater access to critical, rapidly growing markets, and will significantly strengthen our overall offering.”
"Canadian Pacific has proven expertise and has been serving the energy industry in North America for many years. We are pleased to continue to grow this important market through our partnership with U.S. Silica," said Jane O'Hagan, Canadian Pacific Executive Vice-President and Chief Marketing Officer, who noted CP’s agreement with U.S. Silica is an important component of the railway’s growing energy strategy, which focuses not just on outbound crude oil, but also on the flow of input materials into shale and other energy developments."
"Our agreement with U.S. Silica leverages the strength of CP's network through Wisconsin with service to key energy regions throughout North America" said O'Hagan. “We are pleased to be in a position to provide the capacity to our partners like U.S. Silica to respond to the strong growth in the energy-related markets."
Canadian Pacific is the only North American railroad to serve the Bakken Formation, the Alberta Industrial Heartland and the Marcellus Shale. In addition, CP is the only Class I railway to connect the energy hubs of the U.S. Midwest, Alberta and Saskatchewan to the Northeast U.S. Through its network to the Northeast U.S. and through the Kansas City gateway to the U.S. Gulf Coast, CP is able to partner with the energy industry to facilitate growth in moving oil and energy-related materials. Each year, CP moves hundreds of thousands of carloads of energy-related products, including crude oil, sulphur, fuels, diluents and materials key to the energy industry, such as pipe and frac sand.
About U.S Silica Holdings, Inc.
U.S. Silica Holdings, Inc. (USSilica.com), a Delaware corporation, is the second largest domestic producer of commercial silica, a specialized mineral that is a critical input into the oil and gas proppants end market and a variety of attractive industrial and specialty products end markets. During its 112-year history, U.S. Silica Holdings, Inc. has developed core competencies in mining, processing, logistics and materials science that enable it to produce and cost-effectively deliver over 200 products to customers across these end markets. U.S. Silica Holdings, Inc. is headquartered in Frederick, Maryland.
For more information on U.S. Silica contact: Anita Willis-Boyland at 301-682-0676 or Willis-Boyland[.]USSilica.com
About Canadian Pacific
Canadian Pacific (CP: TSX) (NYSE: CP) operates a North American transcontinental railway providing freight transportation services, logistics solutions and supply chain expertise. Incorporating best-in-class technology and environmental practices, CP is re-defining itself as a modern 21st century transportation company built on safety, service reliability and operational efficiency. Visit cpr.ca and see how Canadian Pacific is Driving the Digital Railway.
Janet Weiss, Investment Community
T: 403-319-6170 - E: investor[.]cpr.ca.