According to The Gas Review, on 22nd February, Taiyo Nippon Sanso (TNSC) concluded an agreement through its US affiliate Matheson Tri-Gas with Gazprom to import and distribute helium (He) of Russian origin as the first Japanese company.

Gazprom will set up a plant to liquefy He from its East Siberian natural gas field aiming to complete in 2021, while TNSC will supply He to not only the domestic market, but also to China, Korea, Taiwan and the Far East Asia.

TNSC has been negotiating with Gazprom for about ten years keeping an eye on the prospective He source in the East Siberia of Russia following the source in the US. This time it has borne fruit in the long-term sales agreement of He with Gazprom Export, which is Gazprom’s affiliate in charge of sales.

In 2012, both companies concluded a memorandum on the development of He. Although the term and amount of the agreement at this time have not been disclosed in detail, it is a long-term contract for over ten years and they say that an expected total output of the He project could be 720 million f3, or 20 million m3 per annum in the initial year. Ultimately, three times more output is estimated equivalent to 60 million m3. At the ultimate stage, TNSC’s scale of He business could be 1.5 times more than existing volume handled.

Gazprom possesses large-scale natural gas fields like Chayananda and Kovy kta in the East Siberian area. In this He project, natural gas containing He is transported by pipeline from the gas field to Amur gas treating plant located in the vicinity of Blagoveshshensk City, which is about 2,000km away. He is refined, liquefied and transported overland by 40ft containers to ports such as Vladivostok about 1,500km away. After Gazprom carries out pre-shipment examinations at ports, TNSC takes delivery of the containers for transportation from the ports to the Far East markets including Japan, Korea and China.

For TNSC, which globally spreads out the He business, this project is a significant procurement of large-scale source following the US. In addition to the enhancement to secure an adequate procurement of He, the company also can expect shortening of the distance for transportation and improvement in container turnovers with the He of Russa which is located very near to the Far East Asia where there is a grealty growing demand of He for semiconductor and MRI.

The global demand/supply situation once in the surplus mood is now getting tight. In the midst of the growing demand for semiconductor, optical fiber and MRI in Far East Asia like China and Korea, there is a serious condition at the supply side as seen in the depletion of BLM in the US and if there is any delay in operation of the third plant of Qatar, the global supply condition may get more tight causing fear inevitably. For that reason alone, the future of the new He project with Russia has been drawing much attention.

The domestic demand for helium is nearly matured in Japan, but the He market is related to the world. The influence of tightness must have something to do with Japan. In that sense, it is very significant that there is a source in the East Siberia located near to Japan.

TNSC is planning to expand operations and secure stable supply of the He business in the US, Asia and India as well as Japan making the most of the two sources of the US and Far East.