Air Products lawsuit seeks delay to Federal Helium System sale

The timing of the planned sale of the Federal Helium System assets has been thrown into doubt by a lawsuit from Air Products seeking a delay.

As it stands the General Services Administration (GSA)’s plan is for bidders to present themselves by November 13 and for bidding itself to open on November 15.

But it has emerged that on September 7 Air Products filed a lawsuit in the Northern District of Texas requesting to enjoin the US Department of the Interior, the Bureau of Land Management (BLM), and the GSA from proceeding with the sale. The move is not totally unexpected. Private industry, which collectively has a large quantity of crude helium stored in the BLM and operates four helium-refining facilities that rely on the BLM system for delivery of feed gas, has been lobbying quite hard to postpone or cancel the asset sale in recent years.

This is partly because the gas companies have concerns about the impact of the sale on their ability to deliver crude helium from the helium storage reservoir, the future cost of doing so, and their ability to operate their facilities.

“The Air Products’ lawsuit raises questions about whether the GSA’s asset sale will proceed as scheduled, as it seems unlikely that potential bidders would want to purchase assets that could be entangled in a lawsuit for an indefinite period,” said industry expert Phil Kornbluth, President of Kornbluth Helium Consulting.

The sale has been delayed already, because of the complexities that attach to it. In February 2022, the Compressed Gas Association (CGA) also requested that the sale of be delayed by at least two years to allow privately owned crude helium to be withdrawn from storage. While the BLM subsequently agreed to outsource operation of the site’s Crude Helium Enrichment Unit to Messer, there have been no real signs that the GSA’s timetable for selling the helium assets was impacted by the CGA’s position paper.

More recently, on June 13, 2022, nine of the eleven BLM crude helium storage contract holders, including all the major helium suppliers, sent a letter to the GSA urging that the disposal of the helium assets be delayed until the government had time to address three critical issues. The CGA also issued a second position paper expressing industry concerns about the helium asset sale on June 30, 2022.

Concerns cited by the storage contract holders and the CGA include potential loss of access to the CHEU for the successful bidder, as well as incomplete pipeline rights of way and other legal non-compliance issues.

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