Developments related to the Saudi Arabian-led blockade of Qatar as announced on 5th June have already begun to impact the global helium supply, says Phil Kornbluth, President of Kornbluth Helium Consulting, and editorial advisor to gasworld magazine (US Edition).

Saudi Arabia, the UAE, Egypt, Yemen and Bahrain all united last week to sever diplomatic links, cut off air travel and close land borders with neighbouring Qatar.

It has now been five days since the blockade was announced, with early indications suggesting that it could remain in place for at least a few weeks if not longer; the Saudi-led group of countries are showing no signs of backing down and the US does not seem willing to intervene to resolve the crisis, thus far.

Kornbluth explained that whilst Qatar’s liquefied natural gas (LNG) production and exports is continuing without disruption, its effects are already being heavily felt in the helium supply chain.

RasGas has reportedly shut down both of its helium plants, removing roughly 2,000 containers loads per year – equivalent to 32% of global demand – from world markets.

Kornbluth stated, “The helium business is likely the single business most impacted by the blockade since helium may be the only commodity where Qatar production represents a large share of world supply – and that supply has been totally cut-off by the blockade.”

“Some of the helium containers that are within Qatar’s border, both full and empty, may be able to exit Qatar through its Hamad port in the Doha area,” he continued. “Since the Hamad port has relatively infrequent sailings to a small number of destinations, this would be a lengthy, difficult and potentially risky process that would require transshipment to get containers to their ultimate destinations.”

Jeopardy

It is understood that a number of full containers that had already crossed the Qatari border with Saudi Arabia were not allowed to cross the UAE border and were subsequently turned back to Qatar.

Kornbluth explained that the helium payload in these containers could be in jeopardy if the blockade lasts long enough and if the UAE ultimately refuses to allow these tanks to cross their border.

Production from helium refining facilities tied to the Bureau of Land Management’s (BLM) Pipeline & Storage System has already begun to ramp up as a result, but the organisation’s system could only partially replace the lost supply from the Middle Eastern country.

In addition, Kornbluth highlighted that those refining facilities would be limited in their ability to increase production until empty helium containers en route to Qatar could be rerouted to the US.

Major helium suppliers are now putting plans in place to reposition empty containers for filling in the US in order to minimise disruptions. But, given the time it takes to redirect empty containers to the US as well as the BLM’s inability to fully replace Qatar’s supply, Kornbluth said, “It seems inevitable that world helium markets will experience at least a temporary shortage of supply, with formal supply allocations likely if the blockade is not lifted very quickly.”