Global Demand for Helium on the Rise
Winnipeg, Canada — The province of Saskatchewan in Canada is witnessing a significant surge in helium exploration activity, driven by growing global demand for the gas. As the world’s leading manufacturers and medical professionals seek to capitalize on helium’s unique properties, Saskatchewan producers are optimistic about meeting this increasing demand.
Helium: A Critical Resource
Helium is an essential gas used in various applications, including manufacturing semiconductors, which are crucial components of computer chips. The pandemic has created a shortage of semiconductors, leading to high prices and intense competition for helium supplies. According to Phil Skolnick, an analyst at Eight Capital, global demand for helium is expected to outstrip supply until at least 2025.
Saskatchewan’s Potential
Canada’s fifth-largest helium resources are located in Saskatchewan, which is strategically positioned next to the United States, the world’s largest helium consumer. The province has been working towards increasing its helium production capacity, with a target of reaching 10% of global supply by 2030. To achieve this goal, the provincial government has introduced new incentives and credits for producers.
Record Activity in Saskatchewan
In 2021, three firms — North American Helium, Canadian Helium, and Weil Group — produced a combined 60 million cubic feet per year in Saskatchewan. This represents a significant increase from previous years, reflecting the growing interest in helium exploration and production. North American Helium has even opened a $30-million purification plant to supply Air Liquide, one of the world’s largest helium purchasers.
Support from the Provincial Government
The provincial government’s support for helium producers is crucial to meeting the increasing demand. Energy Minister Bronwyn Eyre stated that once Saskatchewan’s production grows, it hopes to build a liquefaction plant to convert the gas into liquid, enabling transport over longer distances. Some producers have already expressed interest in this project, and the province has financial incentives available.
Neighbouring Alberta’s Potential
Neighboring Alberta is also rich in helium and well-positioned to meet rising demand after establishing a competitive royalty rate for production in 2020. Jennifer Henshaw, spokesperson for Alberta’s energy minister, noted that Alberta’s proximity to major markets and transportation infrastructure makes it an attractive location for helium producers.
Challenges Ahead
While Saskatchewan’s ambition remains a "stretch goal," considering large helium projects under development in Russia and Qatar, experts acknowledge the potential of Canadian producers. Phil Kornbluth, a U.S.-based helium analyst, cautioned that there has been a fair amount of exaggeration and hype generated by some start-ups.
Conclusion
Saskatchewan’s record helium activity is driven by growing global demand for this critical resource. The province’s highly concentrated helium resources make it an attractive location for producers, who can benefit from reduced methane emissions associated with natural gas production. With the provincial government’s support and financial incentives available, Saskatchewan producers are optimistic about meeting the increasing demand for helium.
Key Players
- Royal Helium: A leading producer in Saskatchewan, aiming to start production from 10 wells by year-end.
- North American Helium: Producing a combined 60 million cubic feet per year with its partners, Canadian Helium and Weil Group.
- Air Liquide: One of the world’s largest helium purchasers, supplied by North American Helium through its purification plant.
Recommendations
- Producers should take advantage of Saskatchewan’s financial incentives to increase their production capacity.
- The provincial government should continue to support producers through policies and regulations that promote helium exploration and production.
- Neighboring Alberta should also explore opportunities for helium production, given its competitive royalty rate and favorable location.
By understanding the growing demand for helium and the potential of Saskatchewan’s resources, producers can capitalize on this opportunity and contribute to meeting global demands.
