On Friday the 4th of July gasworld TV hosted several guests for the Helium: A Year of Change webinar. For this week’s Q&A industry experts included Dr. David Dwight Johnson, CEO, Imperial Helium Corporation and Alex Evans, Business Development Manager of Membranes, Evonik. The guests joined gasworld Editor Rob Cockerill.
The two guests answered questions across a broad range of topics, from how the helium recovery process can be maximised, the potential for a helium 4.0 shortage, and the requirements of helium to become a commercial commodity.
Here we revisit some of the questions put to gasworld’s expert panel.
With regards to membrane technology, is the discussion now about maximising the helium recovery process? As, in theory, we’re always going to be looking for that kind of maximum extraction technology.
During the Friday session, Evans answered this question regarding maximising the helium recovery process.
He mentioned the advantages of Sepuron Membrane technology and how it excels in terms of helium recovery or yield.
Regardless of the price of helium, Evans said the best helium plants in the world are going to produce the largest number of helium molecules possible, so whether helium is worth $50,000 per thousand cubic feet or $500 per thousand cubic feet, you won’t want to let the molecules slip away while purification takes place.
Referencing Evonik’s technology, he continued, “That’s exactly where Sepuron membranes add a tremendous amount of value.”
Giving an example, Evans said, “For example, we evaluated a well with one of our customers that produced well over 10 million standard cubic feet of gas a day with something like one percent helium, very typical for North America.”
“To send that entire stream to a PSA (pressure swing adsorption) or a cryogenic plant would require a pretty big asset. We showed them that if you send it to the membranes first, we can return 95% of the helium that was in the original feed.”
“In the stream that comes down to 150 standard cubic feet a minute or 45 times smaller than the raw gas, but it still contains 95% of the original helium.”
Evans went on to say that this represents a massive opportunity for the plant operator to reduce the workload of their polishing equipment like the PSA or cryogenic or otherwise on their way to produce the high-quality helium that the market craves.
An example of this occurring within industry was given as the Minnesota facility in Saskatchewan, built by Linde Engineering.
What is the minimum concentration of helium and gas to be commercial?
When asked about the minimum concentration of helium and gas required to be commercially viable, Johnson elucidated on the topic with some keen insights.
He went on to give an example, saying, “A really good well in Alberta will produce about 10 million cubic feet a day and at 1% helium, that’s 100,000 cubic feet of helium.”
“A really poor price for helium might be $250, so that’s $250 times 100, that’s a revenue stream of $25,000 per day, that’ll translate into $9.1m a year.”
Discussing costs, Johnson revealed that a helium separator could go in the order of $4-5m to fabricate from scratch and they have to be custom designed and built, resulting in more expenses.
Elaborating further on the figures, he went on to say, “For a well in Alberta, one that you’re going to plug and put away will do about a tenth of that, about one million. So that’s $910,000 in revenue stream. Same separator is going to pay out in four years. It’s not a great business, but it does work.”
They then set a threshold at half a percent helium and two million cubic feet a day, approximately.
“The economics can’t be there at lower thresholds. You’re really looking, it’s not just concentration, it’s rate.”, he concluded.
Will there be a helium 4.0 shortage?
When asked about a potential helium 4.0 shortage, Evans gave his opinion, stating that he sees no such shortage issue occurring in the forecastable future.
Suggesting that perhaps we could see a shortage in 50 years or so, he said, “But not in the time period that we can see. I think more and more helium will become available and hopefully some of that with membranes.”
“But I don’t think we’ll have a drastic, drastic shortage. But you know, who knows? I never thought we’d have a global pandemic either, right.?”
Looking at the situation from a global perspective, Johnson added to the conversation, forecasting that perhaps we will see a localisation of supply and demand, similar to the situation with liquefied natural gases (LNG).
He said, “What I’m driving at is that the helium market really begins to look, as it globalises, more like the LNG market.”
“In New South Wales, they pay $10 in Mcf for gas, why do they do that? Because they sell LNG to China $10 per Mcf for gas. Here in Canada, we can’t get $2 for an Mcf for our natural gas. Why is that?”
He went on to suggest that the reason behind this is that the Permian Basin produces so much gas associated with the oil, it saturates the market and there is no LNG train selling gas to China.
This creates localisation in the market that’s associated with the nature and storage of transportation of LNG, and there aren’t as many molecules of heat BTU in the transportation of an LNG tanker as there are in a tanker of oil.
Continuing, he said, “The same with helium; we have to essentially make it into a liquid and transport it so you get isolation of the markets, that will happen. So, my bet is that pricing will begin to look to supply demand locally inside the marketplaces and less on a global scale.”
“We’ll see localisation of supply and demand and price point around that, much like we see in liquid natural gas.”