UPDATE 1-US Silica, BNSF Railway to build storage facility

Mon Jun 18, 2012 11:43am EDT

* Storage facility to have 15,000-ton capacity

* Facility to be operational in early 2013

June 18 (Reuters) - U.S. Silica Holdings Inc said it will partner with Berkshire Hathaway Inc-owned BNSF Railway Co to build a silica sand storage facility in Texas to cater to the rapidly growing oil and gas activity in the Eagle Ford shale formation.

Silica sand is used to make proppant, which is utilized in an exploration method called hydraulic fracturing, or fracking. This technique is widely used in unconventional oil fields.

The 15,000-ton frac sand storage facility in San Antonio will be operational in early 2013, U.S. Silica, the No. 2 U.S. commercial silica maker, said in a statement.

U.S. Silica expects to make three to four shipments of about 10,000 tons of frac sand per month on 100-car unit BNSF trains from its Ottawa, Illinois sand mine.

BNSF, owned by Warren Buffett's Berkshire Hathaway, provides freight transportation over a network of about 32,000 route miles across two-thirds of western United States.

U.S. Silica shares, which have fallen about 24 percent since the company's market debut on Feb. 1, were up 1 percent at $12.32 on Monday on the New York Stock Exchange. They touched $12.50 earlier.