Local reports in Korea suggest a multi-billion dollar dispute is in-progress between Hyundai Heavy Industries (HHI) and Barzan Gas Company, the latter essentially being the source of feedgas for the keenly anticipated Qatar 3 helium plant.
The dispute is reported to concern the Barzan Offshore Plant, which is offshore Qatar and understood to be subject to a gas leak in one of its upstream pipelines.
The plant was completed by HHI in 2015 but with the pipeline leak requiring repair, Barzan Gas Company has seemingly requested arbitration with the International Chamber of Commerce for the necessary maintenance funds from HHI. The level of funds requested, and the apparent blame for the gas leak, are at the heart of the dispute, though it is hoped that this can be resolved both amicably and swiftly.
With the Barzan Gas Project the source of feedgas for the Qatar 3 helium plant, and the global helium market experiencing tight supply, any further delays to the Qatar 3 plant’s start-up will not come as welcome news.
The Qatar 3 plant is the next significant new source expected to enter the global helium market and has long been the source of speculation concerning its start date. gasworld revealed back in January (2018) that the 425 MMCF/yr project is reportedly delayed until at least 2019 due to problems with the pipeline that will transport feedgas to the Barzan Gas Processing Plant.
The news comes amidst tightening supply conditions in the helium business once more. While clear explanations for the current tight supply had been described to gasworld as ‘elusive’, it is widely agreed that the US Bureau of Land Management’s (BLM) continuing allocation of crude helium feedgas to the helium refining facilities linked to the BLM Pipeline, which has been further reduced due to increased demand from government helium users, has significantly reduced US production.
The BLM has been allocating supply at varying levels since the Qatar embargo caused a three-week shutdown of Qatar production back in June 2017.
Besides the BLM allocation, other factors contributing to the current tight supply are supply shortfalls at other non-BLM sources, both in the US and overseas, and delays of new sources – including Qatar 3 – that were originally expected to enter the market in 2018.
Another contributor to the tight supply situation is thought to be an uptick in helium demand, with growth returning to the market following significant demand destruction during the last major helium shortage of 2011 – 2013 (Helium Shortage 2.0).
Global Helium Summit 3.0
gasworld will host its Global Helium Summit 3.0 in Houston, Texas this October (2018), tackling the latest dynamics facing the global helium business, the challenges and opportunities ahead, and what the helium markets may look like in the years ahead.
For more information or to register your interest, visit https://www.gasworldconferences.com/conference/helium-summit-2018/