Construction on new Oklahoma transload facility begins this month

By Patrick C. Miller | August 07, 2017

Construction begins this month on the first independent proppant transloading facility dedicated to oil and gas development in Oklahoma’s STACK and SCOOP plays.

Capable of serving high-speed unit trains, the new Kingfisher Facility—located in central Oklahoma—is the result of a seven-year agreement between Solaris Oilfield Infrastructure Inc. and a STACK E&P operator. The 300-acre transloading facility will have 30,000 tons of silo storage capacity and be located directly on the Union Pacific Railroad line.

Greg Lanham, Solaris CEO, called the agreement a milestone contract that adds significant revenue backlog and improves the company’s visibility for future earnings.

“We anticipate other customers will also seek long-term agreements tied to the new facility,” he said. “The STACK/SCOOP have yielded fantastic individual well results—as E&P companies transition toward large-scale development, we expect the need for high-capacity infrastructure will increase throughout the basin.”

Solaris secured a 30-year land lease with the state of Oklahoma and has started ordering long-lead construction items in anticipation of breaking ground this month. The facility is designed to service multiple large-volume customers with dedicated storage and unit train loop tracks, as well as direct rail-to-truck transloading.

“Our industry-leading well site proppant management systems allow customers to better manage proppant inventory levels at the well site and last mile trucking,” Lanham said. “The Kingfisher Facility is a natural extension of our business, as we expand one step further through the supply chain and continue to facilitate the flow of increasing volumes of proppant across the industry.”

To support committed volumes, the first phase of construction is an 8,000-foot unit-train loop, 30,000 tons of high efficiency silo storage and an additional 18,000 feet of rail sidetrack. The vertical silo storage will consist of six silos with individual capacity of 5,000 tons each. Solaris estimates that the operator’s contracted minimum volumes represent less than 50 percent of the operational capacity of the initial infrastructure.

Estimated capital investment for the first phase of construction is approximately $40 million and will be funded from available cash raised in connection with Solaris’ recent initial public offering. This investment includes capital expenditures related to engineering and site preparation, in addition to rail and silo construction scheduled for completion by August 2018.