Vaca Muerta: Why Premium Sands Are Displacing Local Ones and the Plan to Revolutionize Logistics with Trains, Rivers, and a Federal Regime

For years, the discussion about sand supply for hydraulic fracturing in Vaca Muerta has been dominated by a seemingly simple question: Is it better to use higher quality sand from Entre Ríos, located about 1,300 kilometers from Añelo, or to prioritize local sand extracted in Río Negro or Neuquén, which drastically reduces logistical costs?

The answer seemed to favor the Patagonian quarries. Transportation accounts for more than 70% of the cost of sand delivered to the well, and between 2019 and 2024, local sands covered nearly 40% of the basin's supply, while Río Negro reached a record of 1.4 million tons per year. However, that equation changed abruptly in 2025.

The decision by YPF to abandon the Río Negro sands again and return to primarily sourcing from Entre Ríos left plants practically paralyzed in the Southern Line and reopened a technical debate that seemed closed.

For Roberto Lino Blanco, an Energy and Infrastructure consultant and specialist in business development and logistics for Oil & Gas, the explanation goes far beyond the discussion of transportation costs.

His analysis argues that there are three structural factors that prevent the Argentine shale from adopting the successful U.S. model of the Permian Basin: geological differences, logistical limitations, and completely different geomechanical conditions between the two reservoirs.

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The Mistake of Copying the Permian Model

For years, the Argentine industry took the U.S. experience as a reference. In the United States, historically, fracturing operations used the so-called Northern White Sand, sourced from Wisconsin, Illinois, and Minnesota, globally recognized for its high purity and strength. A revolution began in 2017.

Permian operators started replacing it with the so-called in-basin sand, sand extracted within the basin itself, mainly from the dunes of Kermit and Monahans in Texas. The savings were extraordinary.

Logistical distances were reduced from over 1,500 kilometers to just about 65 kilometers, allowing estimated savings between $300,000 and $500,000 per well, while the cost of sand delivered on location dropped to approximately $60 per ton.

But, as Lino Blanco explains, this is where the first confusion arose. "The sand from the Permian was not good because it was close. It was close and it was also good." The difference is fundamental.

Those Texas sands have an aeolian origin. They were shaped over thousands of years by wind action, acquiring high levels of sphericity and roundness that meet international API specifications. In contrast, the local sands available in the Neuquén Basin have completely different characteristics.

The Geological Advantage of Entre Ríos

The sands from Ibicuy have a fluvial and aeolian origin. For thousands of years, they were transported by the Paraná River, a process that acted as a gigantic natural mineral processing plant. This journey produced a highly rounded, homogeneous grain with very low clay content.

According to Blanco's technical analysis, the differences between the sands of Entre Ríos and those nearby lie in their geological and mineralogical characteristics.

The sands from Entre Ríos, sourced from the fluvial deposits of Ibicuy, contain approximately 86% quartz, exhibit high sphericity and roundness, low fine content, and high crush resistance, conditions that favor the conductivity of hydraulic fractures under the high pressures of Vaca Muerta.

In contrast, the sands extracted in Río Negro and Neuquén show greater angularity, contain more clays and fines, have lower mechanical resistance, and require much more intensive industrial processes of washing, attrition, and classification to meet industry specifications.

For Lino Blanco, the explanation is simple from a physical standpoint: "The mechanics are elementary. A sphere is much harder to break than an edge."

The problem does not appear at first but years later.

One of the central points of Lino Blanco's work is that the true behavior of the support agent cannot be evaluated solely during the first months of production. In Vaca Muerta, there exists a geomechanical condition that completely differentiates the Argentine reservoir from the Permian.

The Neuquén Basin is subjected to high tectonic stresses linked to the Andes Mountains and records overpressure gradients of about 0.80 to 0.90 psi per foot.

While the internal pressure of the reservoir remains high, the sands of lower resistance can behave correctly. But when the reservoir begins to deplete, the effective stress that the proppant bears increases. It is then that the problem arises.

According to the analysis presented by the consultant, the grains of lower resistance begin to fracture, progressively decreasing the conductivity of the fractures. The effect is not a well that declines faster. It is much more serious. "It is not an accelerated decline, but a loss of recovery factor. The molecule gets trapped in the rock because the channel closed."

According to internal studies analyzed by the industry ---although not yet published independently--- the wells completed with nearby sands would have shown losses close to 20% of recoverable reserves compared to those completed entirely with premium sands.

This data, Lino Blanco argues, explains the change in strategy of the main operators.

The economic equation changed completely.

For years, the discussion was focused exclusively on transportation savings. But when the effect on the recovery factor is incorporated, the equation changes.

In the United States, the consultant explains, the industry accepted sacrificing some resistance because it continued to operate within adequate parameters for the reservoir. In Argentina, something different happened. "The migration to nearby sand meant sacrificing one-fifth of recoverable reserves in exchange for saving freight over a thousand kilometers. No logistical differential compensates for that loss," the specialist considered.

Horacio Marín, president and CEO of YPF, had anticipated during the IEFA Latam Forum that the cost reductions achieved through nearby sands ended up being "a deception" when analyzing accumulated production.

The real bottleneck is no longer the sand but logistics.

With the technical debate over the quality of the proppant resolved, a much greater challenge emerges. If the suitable sand is 1,300 kilometers away from Vaca Muerta, how can an industry that will multiply its consumption several times be supplied?

According to projections cited by Lino Blanco, by 2030, demand could reach 12 million tons annually.

This implies mobilizing approximately:

• 320,000 truck trips per year;

• 26,700 monthly trips;

• around 876 daily trucks.

With average loads of 32 tons per unit, about 3,100 trucks dedicated exclusively to sand transport would be necessary.

The estimate coincides with another warning made by Marín, who pointed out that the corridor could practically have "one truck per kilometer going and another returning." For the specialist, the problem has shifted from geological to logistical.

The proposal: a multimodal system and a federal regime for infrastructure.

In light of this scenario, Lino Blanco argues that Argentina needs to definitively abandon a scheme based almost exclusively on road transport.

His proposal combines several tools:

• development of specific railway corridors;

• use of maritime transport to Patagonian ports;

• strengthening the river system to mobilize sand from Entre Ríos;

• logistics storage centers;

• multimodal integration between train, boat, and truck.

In this regard, he considers it essential to advance with a logistics consortium made up of private companies, provinces, the national state, and multilateral credit organizations.

The initiative would be supported by a Federal Regime for Planning and Development of Strategic Infrastructure, inspired by the logic of the Incentive Regime for Large Investments (RIGI), but specifically applied to logistical works.

"Logistical infrastructure ceases to be a sectoral issue to become the condition of possibility for the Argentine export model", states the document sent to Energy Report.

A permanent regime to prevent projects from changing with each government.

The proposal is based on a compelling diagnosis. Between now and 2035, the total volume of cargo in the country could grow from 128 million to nearly 194 million tons annually, primarily driven by hydrocarbons, mining, and agribusiness.

However, much of the infrastructure presents significant limitations.

• Deteriorated routes;

  {#p-1785439667901-78340} {#p-1785439667901-36002}

• Saturated border crossings;

  {#p-1785439667901-45647} {#p-1785439667901-16212}

• Collapsed port accesses;

  {#p-1785439667901-75175} {#p-1785439667901-34210}

• Limited railway capacity;

  {#p-1785439667901-48435} {#p-1785439667901-68132}

• Lack of definitions regarding the Paraná-Paraguay Waterway.

  {#p-1785439667901-83997} {#p-1785439667901-7565}

{#p-1785439667901-14961}

The document proposes to replicate experiences from Chile and Colombia through a legal framework that guarantees legal stability for long-term projects, regardless of government changes.{#p-1785439667901-13785}

Among the anticipated sources of financing are:{#p-1785439667901-77324}

• Tolls;

  {#p-1785439667901-69738} {#p-1785439667901-83248}

• Charges per ton transported;

  {#p-1785439667901-46091} {#p-1785439667901-30418}

• Specific trusts funded by the income generated by each corridor;

  {#p-1785439667901-78105} {#p-1785439667901-35049}

• Financing from the IDB, World Bank, and Fonplata;

  {#p-1785439667901-24288} {#p-1785439667901-77657}

• Private contributions.

  {#p-1785439667901-6266} {#p-1785439667901-24477}

{#p-1785439667901-19393}

Cabotage, another piece to reduce the logistics costs of Vaca Muerta {#p-1785439667901-10090}

Lino Blanco also identifies an additional opportunity in the official project to reform the cabotage regime. The draft Deregulation Law proposes to modify a system that has been in place substantially since 1944.{#p-1785439667901-55028}

Among the main changes is a relaxation allowing foreign vessels to operate in internal maritime and river traffic without requiring special authorizations, in addition to a progressive scheme for the integration of national crews.{#p-1785439667901-3565}

For the specialist, one of the most relevant effects on Vaca Muerta would be to facilitate the development of river and maritime logistics chains to transport large volume inputs, such as Entre Ríos sand, reducing the almost absolute dependence on trucks.{#p-1785439667901-77801}

The new scheme also includes benefits for vessels linked to strategic energy infrastructure projects and natural gas liquefaction operations.{#p-1785439667901-55749}

Cabotage Regime: Its Main Axes {#p-1785440268047-33831}

The project promoted by the Government seeks to create the conditions to develop a river corridor that allows transporting fracture sand from Entre Ríos to Patagonia and reduce the strong dependence on truck transport. Today, each well requires between 11,000 and 15,000 tons of sand, and practically all that volume travels more than 1,300 kilometers by road, which implies a movement close to 1,500 trucks daily at peak activity times.{#p-1785440280789-14087}

The initiative is based on a project presented in the Chamber of Deputies and adds modifications promoted by the Ministry of Deregulation, headed by Federico Sturzenegger. The legislative text that serves as the basis for the reform is file 1899-D-2026, presented by national deputy Diógenes Ignacio González (UCR-Corrientes).{#p-1785440379330-70960}

The proposal includes the development of a multimodal corridor connecting the Entre Ríos port of Ibicuy, the main source of premium sands used by the industry, with the port of San Antonio Oeste, in Río Negro, located about 180 kilometers from Añelo, to complete the last stretch by road.{#p-1785440390929-95510}

This scheme would be complemented by other measures aimed at reducing river transport costs, such as the elimination of tariffs for importing vessels up to 20 years old intended for national cabotage and the exemption from fuel taxes used by those ships. The official diagnosis states that the current structure of the merchant navy constitutes a bottleneck: more than 80% of the Argentine-flagged fleet dedicated to cabotage is concentrated in the transport of fuels, and there are fewer than five vessels dedicated to the movement of general cargo or containers between national ports.

For Lino Blanco, the combination of a cabotage reform, the development of river transport, the strengthening of railways, and the creation of specific logistics infrastructure constitutes the only alternative capable of sustaining the projected growth of Vaca Muerta without the supply of sand becoming the main physical limit to its expansion.

The window to solve the problem is now.

The analysis concludes that Argentina has sufficient mineral resources to supply the development of Vaca Muerta for decades. The real limitation is not in the quarries. It lies in the capacity to transport millions of tons of sand efficiently and competitively. "Raw material is not the problem," summarizes Lino Blanco.

"Reducing the discussion to choosing between premium sand and nearby sand is to stay on the surface. Geomechanics has already made that choice. The truly difficult thing is to resolve the physical dimension of the problem," he emphasized.

From this perspective, the consultant argues that the future of Argentine shale will depend less on finding new quarries and much more on building a multimodal logistics network (railway, river transport, maritime cabotage, and storage centers) capable of supporting the projected growth of Vaca Muerta over the next decade.