There’s been another development in the ongoing helium-supply demand story, with the announcement yesterday that The Bureau of Land Management (BLM) has raised the price of federal crude helium.
Amarillo, Texas-based BLM revealed that revised pricing for crude helium will be offered during its 2013 Open Market Sale, effective October 2012.
The Fiscal Year 2013 price will be $84.00 per Mcf, up from $75.75 per Mcf in Fiscal Year 2012.
A BLM statement explains that the new price is the result of a revised methodology that relies partly on the Consumer Price Index (CPI), as in years past, but incorporates other factors aimed at better capturing the costs of production and the increasing value of crude helium.
These include an Enrichment Factor (essentially the cost of maintaining pressure and flow of gas from production zones), and a Conservation Factor (a calculation of the value of helium and methane lost during transportation, metering, and through production).
The new methodology is expected to encourage industry conservation of the resource.
“Getting a fair price for Federal crude helium is our obligation, and this year’s new pricing represents our commitment to that goal…”
Leslie Theiss, Amarillo Field Manager
Yesterday’s announcement follows the news that Air Products, for example, increased its price of liquid and bulk helium in January 2012, due to the severe shortages in supply globally. It also comes after the summer 2010 crude helium price increase of 15% from the BLM – the initial result of its revised pricing methodology.
Helium has been in notoriously tight supply for years, a situation that was heightened again last summer with notable loss of capacity in the market, rather than excessive demand. A number of factors contributed to this loss of capacity, including a temporary maintenance shutdown at the ExxonMobil Shute Creek Gas Plant in Wyoming, all of which led to gasworld labelling the situation ‘Helium Shortage 2.0’.
Going forward, a BLM statement elucidates that the cost of helium sold for federal purposes will continue to be the minimum allowed by the Federal Helium Privatization Act of 1996.
For Fiscal Year 2013 the pricing has been adjusted to $67.75 up from $65.50 in Fiscal Year 2012.
The BLM’s Amarillo Field Office oversees the Federal Helium Programme.
“Getting a fair price for Federal crude helium is our obligation, and this year’s new pricing represents our commitment to that goal,” said Leslie Theiss, the Amarillo Field Manager.