LNG and helium producer Renergen believes coronavirus may boost demand for helium in the medium term as hospitals prepare for future pandemics by expanding facilities that use the gas.

The South African company says this, coupled with the decreasing supply from the Bureau of Land Management (BLM), will put “significant pressure” on the supply dynamics of helium for the foreseeable future.

“The global macro-economic picture is changing and has seen [the] helium market remain in tight supply. With a prolonged depressed oil price further exacerbating this position, [this] will most likely have an impact on future large scale LNG and helium projects from a financing perspective by delaying the much needed critical investment decisions,” Renergen explained.

“Demand at this stage is not expected to fall in line with the reduced supply shortages. In the medium term we believe many nations will respond to the current pandemic by increasing preparedness against future pandemics with additional medical facilities.”

“It stands to reason that this could result in increased oncology wards and more MRIs, which would place further demand on the helium.”

For the South African economy, Renergen said the full impact of coronavirus has yet to be determined, and what this in turn means for the pricing structure for LNG domestically moving forward.

“Given, however, that South Africa is a net importer of crude oil and liquid fuels, the impact from lower oil prices have been offset by a weakening currency,” Renergen said.

“Supply chains will most likely be impacted and the extent of the problem could worsen should countries and organisations not plan effectively to deal with this unprecedented crisis.”