Helium expert Phil Kornbluth said he does not expect there to be a future helium shortage “for an extended period of time” in the final instalment of gasworld’s three-part Bandwidth in Your Business webinar series, powered by gasworld TV and sponsored by Anova.
Part three, titled Ready to Realise Opportunities and hosted by gasworld Global Editor Rob Cockerill, explored the growth markets still to be targeted and realised, and looked at where businesses may need to find that extra bandwidth for the opportunities ahead.
Kornbluth, of Kornbluth Helium Consulting, said the coronavirus (Covid-19) pandemic helped bring an abrupt end to the two-year helium shortage, known as Helium Shortage 3.0.
“The industry had been in a severe shortage which started in February 2018 and it was a two-year shortage,” Kornbluth said.
“It was a shortage driven primarily by the depletion and decline of existing supply rather than runaway demand. A lot of the time four of the five helium majors have been allocating supply to their customers. The shortage peaked about a year ago, when there was about a 40% shortage last August. Then when Covid-19 came along it was almost as if someone flipped the light switch. Initially there was a demand reduction in China. As the virus spread around the world it took about 20-25% of demand away very quickly and the shortage ended. It turned from a 10% to a bit of a surplus in the market right now. By March the shortage had come to an end.”
Kornbluth expects new supply from the likes of Gazprom’s Amur Gas Processing Plant in Russia to keep the industry in supply of helium rather than there being future shortages, assuming there is gradual recovery of worldwide economies.
“If we have a V-shaped recovery we could get back to a shortage scenario,” Kornbluth said.
“But the more likely scenario is we have a gradual recovery and the expectation of new supply coming into the market. There is a new plant coming on in Qatar towards the end of this year, there might be some contribution from the expansion of the Arzew, Algeria plant, and we have a very large new source expected to come on in Siberia (Gazprom), next year. My expectation is that new supply coming into the market will offset the recovery of demand from Covid-19. The current surplus will diminish somewhat over the next couple of quarters. We have probably seen the last of the shortage for this cycle.”
Kornbluth added, “The Gazprom source is a really big one and once we get to that time the shortage really should be in the rearview mirror for an extended period of time and the industry might be more worried about over supply.”
Kornbluth added that the helium party balloon market has seen a recovery in the US.
How to manage disruption caused by coronavirus
Kevin Lynch, Senior Vice-President, Industrial Gases at webinar sponsors Anova, made a series of points and observations about how coronavirus has impacted the industrial gases industry.
“Covid-19 has revealed the exceptional unpredictability in the industrial gases industry,” Lynch said.
“The industrial gases industry made extraordinary efforts to equip temporary hospitals and make sure all the oxygen tanks were full throughout and we are all very proud of what the industry did. But on the other hand, that sort of overwhelming of the facilities was limited to a relatively small number of Covid-19 hotspots. On the one hand hospitals were using three or four times as much oxygen than normal, and in other places the tanks were barely moving because there was no activity. It was an extraordinary disruption in the demand patterns both up and down.”
Lynch added, “Something similar has happened in the hospitality area. For beverage carbonation, a lot of gas distributors use a fixed delivery system, essentially a milk run, which is easy to manage when you deliver certain tanks certain days but it has inherent flaws in terms of its in efficiency. When Covid-19 came and the demand patterns really changed dramatically, everything went out the window. With restaurants shutting down, then opening up, then shutting down, everything that was normal about the way people were delivering to those tanks changed. Consumption patterns were also different.
“My point is that the suppliers who have information that provide timely insight to what is happening or about to happen at their customers weathered the storm much more comfortably than those do not have that type of insight. That’s going to be critically important as we navigate through the rest of this Covid-19 era.”
Anova specializes in sensors, remote data collection, global wireless communications and web- and mobile-based applications. It delivers data insights to reduce costs, prevent stockouts, and improve its customers’ service, with industrial gas and propane as its largest market segments.
“Timely and predictive information is essential for quick reaction and effective planning in such a dynamic environment,” Lynch said.
“The same information about the assets can be made available to the customers of the industrial gas suppliers on their phones, tablets. That provides them with peace of mind and a really greater connection to the supplier. Customer stickiness. The customers will know their tanks are full, their assets are running properly. As we go forward I think that will be an even more important part about how the industrial gas industry relates to its customers.”
Carbon dioxide circular economies
As well as helium, carbon dioxide (CO2) is a hot topic once again for the industry.
Henrik Lyhne, of Pentair Union Engineering, says more companies are turning to other CO2 supply options.
“What we have seen and some projects we are currently working on is many companies are looking at being self-sufficient,” Lyhne said.
“An example of the new, more advanced technologies is our current supply of an Advanced Amine Technology for Tata Chemicals in the UK. Next to the plant they are running a power plant which has a lot of CO2 in the emissions. We have designed a process plant that recovers the CO2 from the power plant, we purify it to food grade level so it useable in the the sodium bicarbonate production and they the liquid CO2 straight into the production. That is a brilliant example of this new circular economy where in the past we have been a linear economy, they just took supplies from gas company without considering their emissions.
“Our customers are moving away from the typical ammonia, bioethanol plants because they do not consider them as reliable sources any longer. Power plants and refineries are running 24/7.”
The previous two webinars in the series covered crisis management, frontline oxygen demand, remote working, asset tracking, and the growing role of clean energies for both economies and our industry.
For information on past and future webinars, please visit www.gasworld.tv