An Ontario company has acquired a silica sand property on the east side of Lake Winnipeg with the intention of setting up a $30-million plant to process fracking sand for the oil and gas industry.
The processing plant would be built near Seymourville, which is 200 kilometres northeast of Winnipeg, said Charles Gryba, president of Claim Post Resources Inc., which purchased the property for $1.5 million.
Gryba said the plant would scrub clay off the silica sand that's extracted from the ground, and would employ 15 to 20 people. Another 20 to 30 truck drivers also would be needed to haul the sand to a loading terminal that would be built in Winnipeg.
Gryba said the loading terminal, which would load the sand onto rail cars for shipment to mainly Alberta and Saskatchewan, would likely cost about $5 million to build. It would employ between four to eight people, he added, but a site for the plant has not yet been chosen.
Fracking sand is used in hydraulic fracturing (fracking for short), which is a procedure used to extract oil and natural gas. The practice involves pumping water, sand and chemicals into deep wells to create fractures in rock formations and release trapped oil and gas.
Gryba said he hopes to have the plant and loading terminal in operation within two to three years. But he admitted a lot of things have to happen before the company's plan can become a reality.
He said Claim Post only acquired about 70 per cent of the Seymourville property from Winnipeg's Char Crete Ltd. Another company -- Gossan Resources Inc. -- owns the other third, and he said it would make sense to develop both parcels at the same time. So Claim Post is attempting to strike a deal with Gossan, as well.
It also needs to negotiate an agreement or partnership arrangement with Hollow Water First Nation and two Métis communities -- Seymourville and Manigotagan.
"We have absolutely no problem joint-venturing..." he added.
Gryba said negotiations are underway with Gossan and he also hopes to strike a deal with the aboriginal communities within months.
If deals can be reached, the company needs to raise more money to help pay for a drilling program, as well as further engineering reports.
Gryba said $1.5 million has been raised, partly through an ongoing public share offering. But a further $500,000 to $1 million is needed, and he is confident it can be raised.
Gryba said he hopes drilling can start this summer and continue next winter.
The provincial government said hydraulic fracturing has been extensively used by oil companies in Manitoba since the 1950s.