It’s an exciting year in prospect for the global helium business, perhaps what we might describe as a step into the unknown too, as new capacity gradually enters the fray and we come to terms with what the new helium business of looks like.
From shortage to balance, shortage to surplus, and shortage to more plentiful again in 2020. That’s been the story of the helium business over the last decade or more.
Up until the onset of the Covid-19 pandemic just over 12 months ago, the global helium markets were still in the grip of Helium Shortage 3.0, a market squeeze traced back to February 2018. Reduced demand and economic/industrial activity largely signalled an early easing of that shortage.
Read more: Covid-19 cuts helum shortage as demand drops
Indeed, Phil Kornbluth, President of Kornbluth Helium Consulting and Editorial Advisory Board member for gasworld, had written just last month, “Since Covid-19 took a chunk out of helium demand and brought Helium Shortage 3.0 to a rather abrupt end in February 2020, there has been a relative lack of headline events impacting helium markets. The market has seen sufficient supply, the end of steep price increases and no large new sources have entered the market.”
There was also good news to be seen in the Middle East in the early weeks of 2021, with the lifting of the Saudi-led embargo of Qatar, though the impact had initially been relatively negligible; mandatory Covid-related quarantines of truck drivers had made it impractical to ship helium containers over land between Ras Laffan and the Jebel Ali port in Dubai, Kornbluth explained.
And therein lies just one reminder of the helium supply chain complexities. There have been several such reminders during the first quarter (Q1) of 2021.
Shipments via cargo vessels from the Qatari port of Hamad to Jebel Ali were still not permitted, a remnant of the dispute between the UAE and Qatar; the trucking situation was not expected to change until the Covid pandemic has eased, Kornbluth cautioned.
The temporary blocking of the Suez Canal in March was another. When a huge container ship ran aground and became wedged sideways across the canal, it blocked a significant trade waterway. Though only a blockage of around one week, it spiralled into the source of much concern for the global shipping industry, with almost 400 ships at one point stuck in a tailback to pass through the 120-mile canal.
According to reports, as much as 12% of global trade, around one million barrels of oil and circa 8% of liquefied natural gas (LNG) pass through the Suez Canal each day.
Helium product destined for European markets also passes through the canal, I understand, and had the blockage continued beyond a week or more, that could potentially have had an impact on those markets. In the end, the story was a non-starter – but it demonstrated how it could have been a very different matter had that ship not been so swiftly re-floated and recovered.
When we consider that US West Coast ports have also been bottlenecked recently, and sources in Qatar have been partially affected by planned maintenance from early March through to mid-April, we are reminded of the vulnerability that remains in the global helium supply chain.
Helium supply has also been impacted by the severe winter weather that impacted the US mid-continent and Texas, shutting down the Bureau of Land Management’s (BLM) Crude Helium Enrichment Unit and Pipeline System for the better part of a week, Kornbluth explained last month. The BLM had planning for further a 10-13 day shutdown commencing 15th March, as well as a second planned shutdown this month (April).
All of these respective developments arguably don’t merit a story in themselves, but the cumulative effect is a tightening up of the market and localised shortages in some instances due to the sheer logistical efforts involved.
New normal ahead
With both the Qatar 3 project and the long-awaited Amur Project in Eastern Siberia from Gazprom said to be on-track for their respective start-ups in June and July, a new normal of ‘sufficiency’ is expected in the helium supply chain.
In fact, building upon the arrival of a much more ‘favourable’ helium market over the last year, the dawn of these significant new helium hotspots is likely to signal a truly new normal and that aforementioned step into the unknown, in many respects. After a quarter in which we’ve once again been subtly reminded of the supply chain’s vulnerability to plant downtime, geopolitics and unexpected events, the timing could not be more pressing.
Helium Super Summit
Our traditional view of the helium market is changing, requiring a forum for insight and knowledge-sharing, for discussion and debate.
That forum is the Helium Super Summit 2020 from gasworld, coming to Houston, Texas from 7th – 9th December 2021 and a long-awaited return to in-person events.
To be held at the Westin Houston, Memorial City Hotel, the ‘Super Summit’ will provide an expanded stage for helium market and technological development discussions. A combination of esteemed speakers from various parts of the helium business, with key new market entrants and industry analysts, we aim to deliver everything you need to know about expectations for the helium business for the next decade.
Providing an expanded stage, across 2.5 days, also means even more invaluable networking opportunities between suppliers, end-users and equipment innovators alike. If helium is your business, your procured gas, or on your radar, then the Helium Super Summit 2021 is the conference for you.