Explosions and fires, unplanned maintenance, and a major shift in global helium production have all contributed to helium becoming one of the industrial gas sector’s hottest topics over the past few months. With one of gasworld’s most engaged story’s focusing on ‘Helium Shortage 4.0’, it’s clear that the hype isn’t all just hot air.
gasworld’s latest webinar, Helium: Markets Reimagined, Part 1, hosted by Global Managing Editor Rob Cockerill and Broadcast Journalist Tom Dee, featured guest speakers Phil Kornbluth – President of Kornbluth Helium Consulting, Tim Rynott – CEO of Four Corners Helium, and Tom Scaramellino, Senior Vice President of Sales and Marketing at Arencibia.
Helium is set to see a major global shift in production within the next few years. North America, as of 2021, was responsible for 51% of helium production and, by 2025, this is expected to reduce to 37%.
A similar reduction is anticipated in Qatar, which could see it producing 26% of global helium by 2025 – a reduction of 8%.
Russia’s emerging helium market expected to see its production jump from just 3% in 2021 to 26% by 2025.
Projects currently being undertaken in Algeria, South Africa and Tanzania will contribute to Africa making up the remaining percentage of global helium production.
A contributing factor to this shift in the global helium market has been ‘Helium Shortage 4.0’, a topic of expertise for Kornbluth, who gave some keen insight into how this shortage happened.
Calling it a ‘very messy, unsettled and uncertain’ period, he commented on the shortages, saying, “This year we’ve had 16 years of recurring shortages and this year was supposed to be a year of transition to more plentiful supply.”
“It looked like that was going to happen but then the Gazprom facility – after starting up briefly in September – they had a fire in October, and then a more serious explosion and fire on January 1st.”
Referencing the recent escalation in the Russia/Ukraine crisis, he added that, given the week’s events the plant is less than likely to be restarted this year.
“There is some aspiration to try to get the plant restarted before the end of the year, but that may or may not happen,” he said. Adding, “It’s clear that this year is going to be another year of tight supply conditions, shortages, supply allocations and elevated prices.”
According to Kornbluth, demand shortages due to Covid-19 have largely gone away but port bottlenecks due to Covid-19 in Qatar have caused logistical issues such as shipment delays, resulting in a less reliable spot market.
Although not expecting to see much of a return to normal this year, prices are anticipated to stabilise slightly when the BLM – which is currently ‘prudently’ allocating resources - resumes normal operations.
In terms of the effect on helium supply in the midst of heightened tensions between Russia and Ukraine, Kornbluth believes that there’s likely to be very little impact short-term.
“I would say that the short term impact isn’t going to very significant, longer term impact though… it’s going to delay the progress in getting Amur repaired and restarted,” he said.
Can sanctions on Russia impact helium supply?
With Russia set to markedly increase its output of helium within the next few years, the proposed sanctions set by the US upon Russia could impact the global supply of helium, but to what extent?
Stating that he doesn’t think it will have a ‘big impact’ on sipply within the next 12 months, Kornbluth added, “Nobody’s expecting much out of Russia anyway but, longer term, it becomes very difficult to do business with Russia and from that point it could have a big impact.”
“I’m hope that things don’t go back to what they were like during the Cold War; doing business with Russia was very difficult.”
A less unpredictable future?
Promises made by industry that the future of helium was to be less unpredictable, Kornbluth was asked if this – given recent events – is still the case.
“I hope so, but we have a way to go before we get to that points. There’s going to be another big plant in Qatar and I hope the helium supply later in the decade is going to be much more reliable.”
Founder of exploration and operating company Four Corners Helium, Tim Rynott is equipped with 40 years of experience in the energy business with expertise in upstream prospect generation, evaluation and operations.
Asked by Cockerill to elaborate on the company and its current exploration projects, Rynott delved into the intricacies of helium exploration.
“We have a top team for finding helium that spawned the aconym SAM, Science, A sensibility, and Market.”
“Think of this as a three-legged stool. The science involved creating the most comprehensive database of known gas compositions from previously drilled wells, followed by studying every known helium accumulation in the southern Rockies,” he explained.
This data allowed the company to determine the two most important elements for discovering helium: seal and source. Stating that there is ‘no perfect seal’ for helium, he said that a thick salt layer of anhydrates can be an excellent baffle.
“Which is why our first drilling location in two months is going to be drilling through 1700ft of salt.”
The helium extracted will help supply a market heavily invested in products that require the gas, such as Phoenix’s burgeoning semiconductor industry.
With a focus on becoming domestically self-sufficient, Rynott stated that one of the most important strategies of Four Corners Helium is to study its competition meticulously.
“This is a business, we’re here to make money. Our primary project right now is down in southeast Utah and then we have a secondary project which is really close to Four Corners.”
“At today’s prices, these are both profitable assuming no mechanical issues,” he revealed.
Gas recovery systems play a key role in the helium industry. Elaborating upon Arencibia’s involvement in gas recycling, supply, and helium, Scaramellino explained, “We build custom onsite recovery systems for large helium users. We finance and operate these systems ourselves, this helps to reduce capital and operational risk for our customers.”
Warranting the performance of its systems to recover no less than 90% of the helium, the company typically recovers 95-97% of helium, dramatically reducing the virgin requirements for its customers.
With over 30 years of experience building and operating systems that capture, purify and return high purity helium, Arencibia’s applications cover leak testing and defence, aerospace, medical, heat treating and quenching applications in aerospace and automotive, in addition to a range of uses in the silicon and semiconductor pipeline.
“Our goal here is not only to address the high price of helium, but the availability and curtailment issues, as well as dramatically reducing the carbon footprint and energy footprint of our customers,” explained Scaramellino.
Analysis and recovery
Asked about Arencibia’s monitoring, anlysis and recovery service – or MARS – Scaramellino revealed that the company has invested millions of dollars over the past five or six years in building what it believes is the most advanced big data platform for the monitoring of process gas.
“We use state of the art gas analysis, flow pressure and temperature instrumentation capabilities and we actually send all of that data up into our private cloud in real time and deploy some pretty sophisticated machine learning on top of it,” said Scaramellino.
“Each of our systems at major manufacturing sites and most of our customers are large public companies, Fortune 50 to Fortune 500 companies, and we’re communicating literally terabytes of data back to this MARS platform and genereating insights that produce tremendous operational benefits for our customers.”
According to Scaramellino, the benefits of MARS have been so significant independent of just being able to recycle and purify the helium molecules that the company has begun deploying the platform independently of a recovery system.
“Many of our customers have outdated recovery or recirculation systems that were installed some time ago, either in-house or built by the gas supplier. With MARS we can address these issues, whether that’s identifying leaks or proactively replacing underperforming components.”
“We’ve just started deploying it as a standalone solution, which is pretty exciting.”
The full webinar is available to be watched on demand at www.gasworld.tv.