Air Products has started up the ‘world’s largest storage cavern’ in Texas, it was revealed during session one of the gasworld Helium Super Summit at the Westin Memorial City in Houston on Wednesday.

Walter Nelson, Vice-President of Global Helium and Rare Gases at Air Products, revealed the news first at the gasworld event and an official announcement is expected soon from the major industrial gas company. 

“It’s the largest helium storage cavern in the world,” Nelson said.

“It’s fully operational as of 2021. It’s physically the size of the Empire State Building. The injection and withdrawal rates exceed the current capacity of the BLM system which enables us to back up any planned or unplanned outages at any sources around the world. If the ExxonMobil goes down with Hugoton, helium can be pulled from the cavern.

“It’s the first one [helium storage cavern] in the US and it’s located thousands of feet below the surface.”

Wally Nelson, of Air Products

Air Products confirmed later Wednesday that it holds exclusive rights to the helium cavern through a long-term storage services agreement. The new cavern marks Houston-based Caliche Development Partners’ second to go online in just three years, bringing the company’s total capacity at its Beaumont storage complex to 8.0 million barrels. Creation of a third cavern at the facility is underway.    After John Raquet, gasworld’s own Publisher and CEO, opened the sell-out event of 270 delegates from multiple countries, Nelson focused on the opportunities and challenges the helium business is likely to face in the next five years.

The decline of the BLM federal helium reserve and the uncertainty it brings is one challenge facing the industry, but Nelson also outlined the opportunities within the helium business.

Nelson pointed out there are at least 14 publicly traded helium stocks and there could be more in the future. Nelson said there could be 200+ years of supply at current demand rates if all the known gas fields were produced.

“But it’s all about timing, and helium will only be produced if the natural gas is being produced,” Nelson said.

Nelson stressed that diversification brings reliability and referred to Helium 3 Qatar, Helium Salt Cavern Storage US [Air Products], Gazprom Amur Russia and HELIOS Algeria. Air Products is involved with all of those projects, which Nelson says is helping to secure a reliable supply for the major industrial gas company.

“The BLM has declined and Qatar is now the second largest supplier in the world with 2.2 Bcf,” Nelson said.

“There’s an awful lot of helium coming into the market but we need know that these projects end up hitting delays.”

Live now tile 1 


Uncertainty over demand versus supply and disruption caused by supply chains dominated session one.

Maura Garvey, Principal and Director of Market Research at Intelligas Consulting, explored the outlook for supply versus demand 2021-2026, including how some companies have struggled for availability in the second half of 2021.

“Beginning in July 2021 several unplanned plant shut-downs, especially the BLM, created a sudden tightness in supply that continues today, that remains in some markets today,” Garvey said.

“As new large sources of helium come fully on-stream, Qatar 3, Amur, and Irkusk, supply and demand balance will return with the potential for oversupply. However, uncertainties remain, such as demand on existing supply will be difficult with planned and unplanned plant shut-downs; ISO turnaround time lengthened because of supply chain issues and port bottlenecks driven by the pandemic and there is very little inventory remaining in the Bureau of Land Management (BLM) reservoir as of October 1, 2021. Crude deliveries will continue to decline yearly. Demand on supply is a monthly, not yearly, logistics issue.

“Uncertainty is the nature of our helium business. There’s so much going on that could disrupt our supply chain.”

Maura Garvey, of Intelligas

Garvey said worldwide supply is in balance with demand - 5.9 Bcf in 2021 – but that US sourced helium will decline from 51% of worldwide supply in 2021 to 37% of worldwide supply in 2026. Emerging overseas sources include Gazprom’s Amur gas processing plant (GPP) in the far southeast of Russia, which is about 80% complete with the first two of six trains now in operation, and the total capacity of that helium project will be 2.1 Bcf. Qatar 3 came on-stream in mid-2021.

“What’s important to note is the big dip in 2020, we went from tight supplies to a surplus, it took about 10% of supply off the market, but we are back in balance now,” Garvey said.

“Demand will grow by 3% over the next decade and it will grow faster over the next five years, coming out of the pandemic, so it could grow at a faster rate for a short while. 

MRI (17%), lifting (16%), semiconductors and analytical/labs (both 13%) are the leading applications, according to figures from Boston-based Intelligas.

“The fastest growing segment is electronics in the US at 13% of consumption and it will grow to 17% in the next three of four years because of all the semiconductors fabs coming to the US,” Garvey said.

“Surprisingly lifting – helium balloons – held up very well in the US during Covid at 16%.

Intelligas predicts that by 2026 ExxonMobil (US) will supply 18% to the global market, as will the GPP (Russia), and Qatar 32%. 

“We need new sources in the US, otherwise we become a net importer of helium,” Garvey said.

“US production will meet US demand for the next decade, but new sourcing will be needed within the US to avoid importing helium thereafter.”

Supply chain strains

Steve Eckhardt, Vice-President, Global Helium at MATHESON Tri-Gas, helium demand dropped about 25% in the immediate aftermath of Covid-19, but demand slowly and gradually rebounded and is now at or near pre-Covid levels. 

Eckhardt explained the impact of the pandemic on the supply chain, and how it has impacted helium logistics. Increased demand for consumer goods has resulted in US and Asian port congestion, significant delays at some ports. 

“Transport of helium containers has become problematic, the ISO container fleet is stretched,” Eckhardt said.

Eckhardt said impact on helium logistics to include: increased transit times; increased transport costs, and the ISO container fleet is stretched.

“Container supply is limited as some suppliers have experienced container shortages while others have no spare capacity,” Eckhardt said.

“Delays in shipments result in some customers keeping containers for longer periods of time. ISO container suppliers quoting record long lead times.

“A big percentage of helium has to go on the ocean and that’s led to delays which has stretched and strained the ISO container fleet.”

Steve Eckhardt, of MATHESON

Eckhardt added, “A very frustrating point I have to make is that ocean shipping companies’ vessels have left LA or Long Beach ports empty to expedite lucrative Asia to US bookings. You can make bookings only to find out at a few days notice that the boat will sail empty and your helium containers will not be on that boat.”

Many helium plants have been impacted by Covid, with delayed plant start-ups and restarts, and Eckhardt concluded by saying supply chain bottlenecks are expected to persist into 2022. Qatar 3 was delayed from a 2018 start-up, and then was delayed further before its start-up this year. Irkutsk has been delayed to late 2022 start-up due to Covid, while Eckhardt said Gazprom has been delayed by about four months. The BLM plant was delayed by several months in part due to government imposed Covid restrictions.

“Our helium supply chain team at MATHESON, and our rivals, have managed to get ISO containers shipped over the ocean and it has taken a bit of creativity and without them we would be in trouble,” Eckhardt said.

Eckhardt said lead times on ISOs were upwards of 18 months.

The summit will continue with session two at around 11am local time (CST) before lunch and dedicated networking time around the exhibition area, which has XXX tabletops.

Stay up-to-date

Stay up-to-date with all the latest news, views and developments at the Helium Super Summit via the gasworld website, updated throughout the event.

gasworld will also be sharing live updates during the Summits, which you can follow on twitter and LinkedIn using the hashtag #GWHOUSTON21