The global helium business has seldom been far from the headlines in the last half-decade. The industry endured a long and severe supply shortage from 2011-2013 (Helium Shortage 2.0) and though it has been through periods of recovery and equilibrium in the years since, the business is still often on the edge of imbalance.
The market experienced a high-profile reminder of this just last year. While short-lived at just a three-week shutdown, a feared shortage due to the abrupt Qatar embargo situation in summer 2017 sent shockwaves through the market and highlighted a glaring lack of a Plan B in the helium supply chain.
Qatar supply accounts for about 32% of worldwide demand; when spare capacity is considered, this is at least 25% of worldwide helium capacity. The Saudi Arabian-led embargo of Qatar created a major logistical challenge in getting product out of Qatar to world markets, and forced a temporary shutdown of the two plants in Ras Laffan Industrial City (Qatar I & II).
The situation highlighted the relative lack of flexibility and fragility of the global helium supply chain. Even in a helium market that was viewed as modestly over-supplied prior to the Qatar crisis, the loss of a major source can quickly result in a shortage situation. With the drawdown of the US Government’s stockpile and the loss of flex capacity in the US, the industry does not have a great deal of ability to respond to the loss of a major source.
This incident also highlights the fact that an increased percentage of helium supply is subject to geopolitical risk. Even Qatar, which has been a stable country and an ally of the West, has been shown to be at risk due to its unique geography and its location within an unstable part of the world.
Now, for the second time in 12 months, the industry is staring at the prospect of another global helium shortage. gasworld broke the news back in early February that helium markets are again experiencing tight supply conditions; though premature to declare a shortage, and in the knowledge that helium market conditions might not even reach that point, gasworld understood at least two of the major global helium suppliers were allocating supply in some geographic markets. Midway through 2018, and the market is once again in a precarious position.
A central factor in this is that the US Bureau of Land Management’s (BLM) continuing allocation of crude helium feedgas to the helium refining facilities linked to the BLM Pipeline has significantly reduced US production. The BLM has been allocating supply at varying levels since the Qatar embargo last year.
Other factors contributing to tight supply are supply shortfalls at other non-BLM sources, both in the US and overseas, and delays of new sources that were expected to enter the market in 2018. Meanwhile, the market has experienced an uptick in helium demand. The helium business experienced significant demand destruction during Helium Shortage 2.0 and there had been meagre demand growth during the ensuing years, but with all of the major economies back in growth mode, helium demand growth finally seems to be returning to the market.
With the only material boost to supply coming from the BLM’s installation of central compression, no other significant new supply expected to enter the helium market before 2019, and the expectation of continued demand growth, global helium markets may experience a tenuous balance between supply and demand for the remainder of 2018.
Helium Summit 2018
Against this backdrop, gasworld’s third Helium Summit will take place in October, at the Marriott Marquis Hotel in Houston, Texas. With the industry at a crossroads of future challenges, the timing for this event couldn’t be better.
It has long been known that the world’s biggest helium resource, the BLM Pipeline, is on a timer to depletion and that by 2021 we will face the reality of a new-look helium business altogether. The industry has been scrambling to bring new capacity online around the world and unearth innovative new means of sourcing, while end-users have been actively pursuing recovery and recycling technologies.
With the theme Transitioning To Life Beyond the BLM, the Global Helium Summit 2018 will provide insight into these major issues facing the helium business, including the declining capacity of the US Bureau of Land Management’s (BLM) Helium Pipeline, the coming privatization of the BLM’s helium assets, and the anticipated emergence of Gazprom as a major player in helium markets.
A wide ranging agenda will feature presentations from key industry executives and thought leaders that will help participants assess the impact of the important changes facing the helium business. The event, to be held from 3rd-4th October 2018, will also provide an unrivalled opportunity to network with a veritable ‘who’s who’ in the global helium business.
Registration is now open for the event and with a Super Early Bird delegate rate of just $770 available until 13th July, places are selling fast.
The summit will open with a session dedicated to Market Conditions and Future Supply, with key speakers from some of the biggest players in the business dissecting these dynamics for the first half of the event.
Air Products’ General Manager of Global Helium, Walter (Wally) L. Nelson (pictured above), will present Helium Market Overview - The Big Picture followed by insight into BLM Operations & Privatization from Samuel Burton, Amarillo Field Manager for the BLM’s Federal Helium Program.
Claus Nussgruber, Head of Linde’s Global Helium and Rare Gases business, one of the largest and most diversified in the industry, will talk delegates through Gazprom’s keenly awaited Amur Project, before a Q&A session and coffee break.
The session will then resume with discussion of Qatar Embargo – Status & New Normal Logistics from Jerome Christin, General Manager of Global Helium and Rare Gases (Worldwide) at Air Liquide. IACX Energy LLC CEO Rex Canon will then move the discussion onto Supply from Non-Hydrocarbon Sources before Nicholas Snyder, the founder, Chairman and CEO of North American Helium, Inc. – a helium-focused exploration and production company with primary operations in the SW Saskatchewan helium district in Canada – rounds the session off with a talk on Helium Production in SK.
Session 2 will then commence after lunch and exhibition time, focusing on Helium Marketing, Markets & Applications. Phil Kornbluth (pictured), founder and President of Kornbluth Helium Consulting, LLC, member of gasworld’s US Editorial Advisory Board and co-organiser of the summit, will kick of the session with a discussion of the pending Praxair-Linde merger and how this could create a whole new player in the global helium business.
Much of the publicity surrounding Praxair’s pending merger with Linde has focused on the geographic overlap between their respective atmospheric gas businesses, especially in the US. Another segment where there is very significant overlap, however, is the helium business – where Praxair and Linde are two of the four largest global competitors (the others being Air Products and Air Liquide). It is felt in some quarters that the regulatory authorities will require major divestitures of helium assets to preserve the competitive intensity of the helium business. As Kornbluth will explain, when the dust settles it is likely that there will be a major new competitor in the global helium business.
MATHESON’s Steve Eckhardt will follow with an Overview of the Chinese [Helium] Market, ahead of a discussion of Helium use in the Electronics Industry courtesy of Linx Consulting. The transport of helium will then be in the spotlight as first Ken Kelley – CEO of Kelley/GTM – and then Gardner Cryogenics’ Todd Newman take to the stage to present High Capacity Tube Trailers and State-of-the-art – 11,000 Ga. Containers, respectively.
Kornbluth will wrap up the event with his concluding thoughts on the event, the key takeaways for producers, suppliers and end-users of helium and the market dynamics, ahead of valuable exhibition time and an evening afterglow (drinks) reception.
A tight market in-progress; shortages seemingly never far away; a market evidently exposed to geopolitical risks; and a number of future supply scenarios in the mix. The global helium business might be described as something of a tinder box ready to catch light in the months and years ahead. With its unrivalled line-up of speakers and insights, this October’s Helium Summit 2018 is clearly an event not to be missed by stakeholders, technology innovators and end-users in the helium supply chain alike.
What can delegates expect?