Smart Sand Sees LNG, Data Centers Fueling Frac Sand Growth

Key Points

• Smart Sand expects natural-gas demand to drive frac-sand growth: Rising LNG export capacity and data-center power needs could significantly increase U.S. gas consumption, production and well-drilling activity.
• The company sold about 5.4 million tons last year and was on pace to exceed 6 million tons in the first half of 2026, with roughly 10 million tons of annual capacity and additional growth available without major capital spending.
• Longer horizontal wells and higher sand usage per foot are increasing sand demand per well, while Smart Sand’s low leverage, terminal network and more than $34 million in shareholder returns since 2023 support its growth strategy.

Smart Sand NASDAQ: SND Chief Financial Officer Lee Beckelman outlined the company’s Northern White frac sand operations, logistics network and growth outlook during the Lytham Partners Fall 2026 Investor Conference, pointing to rising natural-gas demand and increased sand intensity per well as key market drivers.

Beckelman said Smart Sand is a pure-play provider of Northern White sand in North America, with more than 450 million tons of reserves, primarily consisting of fine-mesh sand. He said fine mesh accounts for approximately 80% to 90% of demand in the oil and gas market.

The company operates 10 million tons of annual capacity across facilities in Oakdale, Wisconsin; Ottawa, Illinois; and Blair, Wisconsin. Those facilities are connected to Class I railroads, which Beckelman described as central to the company’s ability to deliver sand efficiently to customers.

Capacity and Logistics Network

Smart Sand sold about 5.4 million tons last year and was on pace to sell more than 6 million tons through the first half of 2026, according to Beckelman. He said the company continues to have available capacity for growth without requiring significant incremental capital spending.

• Oakdale has 5.5 million tons of capacity and connections to Canadian Pacific and Union Pacific railroads.
• Ottawa has 1.6 million tons of capacity and is connected to BNSF Railway.
• Blair has 2.9 million tons of capacity and is connected to Canadian National.

Beckelman said roughly two-thirds of Smart Sand’s costs are related to logistics. The company generally sells its sand at terminals, where it transfers title to customers and is responsible for railcar, freight and transloading costs.

To support its distribution operations, Smart Sand has invested in five terminals, including locations in Waynesburg, Pennsylvania; Dennison and Minerva, Ohio; and Van Hook, North Dakota. The terminals provide access to the Marcellus, Utica and Bakken basins. Beckelman said the company will continue to evaluate additional terminal opportunities, arguing that controlling terminals can increase its market share in the regions it serves.

The company uses unit-train shipments, typically loading between 100 and 150 railcars at mine sites for direct delivery to basin terminals. Beckelman said this model supports lower rail rates, quicker railcar turns and lower terminal operating costs.

Natural Gas Demand Seen Supporting Sand Volumes

Beckelman said approximately 60% to 70% of Smart Sand’s frac sand volumes currently serve natural-gas markets. He identified expanding liquefied natural gas export capacity and power demand from data centers as potential sources of incremental natural-gas demand in the United States and Canada.

According to Beckelman, existing LNG facilities consume about 18 billion to 20 billion cubic feet per day of natural gas, while U.S. LNG capacity is expected to rise from about 20 Bcf/d currently to 30 Bcf/d to 35 Bcf/d over the next five years. He said that increase could require an additional 10 Bcf/d to 15 Bcf/d of supply.

He also cited the growth of data centers, including facilities considering behind-the-meter power generation fueled by natural gas. Beckelman said data-center-related electricity needs could create another 5 Bcf/d to 7 Bcf/d of natural-gas demand over the next three to five years.

If those demand expectations materialize, U.S. gas production could rise from approximately 110 Bcf/d to between 120 Bcf/d and 130 Bcf/d over the next five years, Beckelman said. He said greater production would require more wells to be drilled and completed, supporting demand for Northern White sand.

Longer Laterals and Higher Sand Intensity

Beyond natural gas demand, Beckelman pointed to longer horizontal well laterals and increased sand usage per foot as additional drivers of frac sand consumption. He said producers are seeking to improve the productivity of individual wells by extending laterals and increasing the intensity of hydraulic fracturing stages.

Average lateral lengths have increased from roughly 6,000 to 7,000 feet to more than 16,000 feet in parts of the northeastern United States, according to Beckelman. Smart Sand’s primary markets include the Marcellus and Utica regions in the eastern U.S., the Bakken in North Dakota, and the Montney and Duvernay shales in Canada.

Beckelman said longer wells require more sand overall, while greater sand loading per foot further raises demand per well.

Capital Structure and Shareholder Returns

Beckelman emphasized Smart Sand’s low-leverage approach, saying it has helped the company manage oil-and-gas industry downturns while retaining the ability to pursue growth during stronger market periods.

Since 2023, Smart Sand has returned more than $34 million to shareholders through a combination of special dividends and share repurchases, he said. The company has repurchased about 7 million shares over that period.

Management and insiders own approximately 36% of Smart Sand, according to Beckelman. Founder and Chief Executive Officer Chuck Young owns about 18%, while other executives, directors and founders collectively own another approximately 18%.

Beckelman also said the company’s industrial product solutions business, which supplies sand for non-oil-and-gas applications, represents about 5% of sales and grew more than 60% year over year in 2025 compared with 2024. He said the business is expected to expand, particularly from the Ottawa facility’s position near the Chicago metropolitan area and broader Midwest industrial markets.

About Smart Sand (NASDAQ:SND)

Smart Sand, Inc NASDAQ: SND is a domestic producer and supplier of industrial sand used primarily as proppant in hydraulic fracturing. The company provides Northern White frac sand, which is placed into oil and natural gas wells to help keep fractures open and support the flow of hydrocarbons.

Smart Sand's operations include sand mining, processing, storage and transportation. In addition to its production facilities, the company offers logistics and distribution services designed to move frac sand from its Wisconsin production region to customers and well sites across major U.S.

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