* Firm says to open EU's first ceramic proppant plant
* Proppants used in shale gas drilling to boost output
* Company issuing shares to close financing for project
* Plant to start production in second half of 2015
By Marcin Goettig
WARSAW, May 27 Poland's Baltic Ceramics
Investments is issuing shares to help fund
construction of a factory that will produce a high-tech
substance used in fracking, part of a developing supply chain
for eastern Europe's shale gas sector.
The company plans to produce ceramic proppants, tiny and
almost indestructible engineered spherical balls that are
injected deep underground to help push oil and gas to the
surface, part of the process called hydraulic fracturing.
"We will have the first such factory in the European Union,"
Dariusz Janus, head of IndygoTech Minerals, the holding company
controlling Baltic Ceramics Investments told Reuters.
Ceramic proppants, which can withstand high temperatures and
pressures, are used to keep the fractures in the shale rock
open, especially if deposits are more difficult to tap, which
experts say is the case in Poland.
Over 50 exploratory shale wells have been drilled so far in
Poland, and experts say that dozens more are required to
determine whether large-scale commercial production of shale gas
That means millions of dollars of spending on exploration,
which has already led United Oilfield Services to open a
logistics base in Poland in August last year. U.S. giant
Halliburton is also constructing a hub for Polish
Baltic Ceramics wants to have the factory up and running in
the second half of 2015. It has made successful tests of its
product in the United States and is ordering equipment for the
factory, Janus said.
The company has received $11 million from the European
Union's structural funds, a further $4 million from Poland's
public funds for boosting innovation and is currently issuing
$3.4 million in shares to complete financing for the project.
Other countries in eastern Europe, including Romania and
Ukraine, are seeking to develop shale gas, adding to the
potential demand for services and supplies.
Baltic Ceramics aims to produce 135,000 tonnes of proppants
per year, about 5 percent of global demand. It says it owns
deposits of enough raw materials to cover up to 80 years of
"We have already received inquiries about our product from
firms looking for shale gas in Poland, Romania, Ukraine and
Britain," Janus added.
Demand for ceramic proppants has risen sharply in recent
years, driven by the U.S. shale oil and gas boom.
Also the Russia-Ukraine crisis raised the pressure on Poland
and the rest of the European Union to cut reliance on Russian
gas imports. Janus said the political situation was "very
favourable" for the firm.
He said the key advantage of Baltic Ceramics was its
location in Poland, which will allow it to provide operators in
Europe with ceramic proppants significantly faster and cheaper
than firms such as Carbo Ceramics or Imerys,
which produce their proppants in the United States.
Poland has had ambitions to replicate the U.S. shale boom,
but a downgrade in estimates of its gas reserves, more difficult
geological conditions than in the United States and the exits of
some global energy firms have cast doubts on its shale
In a potential turnaround, energy firm San Leon
hailed the first successful shale test in Poland in January and
said the use of ceramic proppants was vital to achieving it.
($1 = 3.0533 Polish Zlotys)
(editing by Jane Baird)