Halliburton, Baker Hughes Buy More Sand, Railcars As Demand Piles Up


Oct 21 (Reuters) - As fracking accelerates in North American shale fields, oilfield services providers Halliburton Co and Baker Hughes Inc are stockpiling sand to protect themselves against rising costs and are buying more railcars to transport the haul.

Halliburton, the world's largest provider of fracking services, is more than doubling its railcar fleet and capacity for sand terminals - where sand is stored and transferred to truck from rail. It had about 3,500 railcars under management as of June 30.

Baker Hughes, the world's No.3 oilfield services provider, said at the Barclays CEO Energy Power conference last month that it had "significantly" increased the number of its railcars and is buying more sand under contract, which helps buffer it against price rises.

Companies are pumping in as much as a trainload of frac sand into a single well to coax more oil and gas from shale rocks.

But the shale rush, especially in Texas and North Dakota, coupled with a rail jam that began after last year's severe winter has resulted in shortage of sand at drilling sites.

"We did experience some disruptions early in the third quarter, where work was delayed because we were waiting on sand deliveries," Halliburton's Chief Executive David Lesar said on the company's post-earnings call on Monday.

Halliburton has committed about $100 million this year to upgrade its infrastructure to move frac sand.


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