A year of supply constraints, shipping pressures and rising prices – coupled with wars and accidents, healthcare challenges and soaring semiconductor demand – have created a perfect storm for operators grappling with ‘Helium shortage 4.0’.
Yet the clear message from the ‘Global helium and the role of MENA in the supply chain’ session, on the opening day of the Abu Dhabi MENA Industrial Gases 2022 conference, is there are plenty of grounds for optimism, whether that’s through new products, fresh or returning capacity and market developments.
The market has experienced unprecedented pressures primarily due to the natural gas explosion at Gazprom/Amur, but if and when it returns next year, it is expected to make a significant contribution to supply and help moderate prices, together with a robust pipeline of other new projects. Delegates heard just under 2.9bcf of new supply is expected to come on stream to 2026.
The one major caveat is ongoing geopolitical risks which will continue to present uncertainty. Russia’s slice of the helium pie is projected to increase from around 2% to as much as 26% in 2026, although North America (53-37%) and Qatar (31-27%) are both expected to remain dominant over the next four years, despite losing share.
Mazin Babiker, General Manager, Gulf Helium Services, set the scene by outlining the trends and challenges in the global helium business, before highlighting its logistics work with 40-feet liquid helium ISO containers.
He said, “The need for Cooldown has risen as a result of the complications in global logistics and global helium shortages,” he said.
Container temperatures should be below 80 (-193C) to qualify for filling at sources, and the process of transferring LHe from a Cold container to the Hot container takes up to two weeks.
Helium is critically important for the healthcare sectors (MRI and NMR Spectrometers) and superconductivity. The MRI market, valued at $4.8bn in 2021, is expected to expand at a rate of 7.1% between 2022-2030, with sales of MRI machines forecast to rise to $8.5bn by 2028.
Another slide illustrated ongoing challenges with the estimated cases of new cancer cases due to rise from 19.3 million in 2020 to 28.9 million by 2040.
Meeting semiconductor and fibre optic demand is no less problematic with the rapidly growing sector increasing from 7% to 18% of total helium consumption in the last five years, and it’s a similar story in aviation and space industries – which need helium as a pressurising agent for ground and flight fluid systems, cryogenic agent for cooling various materials, precision welding applications and leak detection.
Swapnil Vichare, Group General Manager – Operations, Global Gases Group, drilled down into ways of managing the helium crisis, highlighting logistics, fleet management, production planning, process losses, liquid-v-gas balance, tanker hold time and flash gas.
“Helium is a niche product, it needs extreme care,” he said. “Significantly you need a good logistics partner and fleet management is very critical when you’re handling these $1m ‘babies’ (tanks) – you need a lot of expertise and due diligence.”
Communication is another key element. “You need to sit down with your sales guys and work out how you can add value to the business and your customers,” he said.
Savir Julka, Global Head, IG, INOXCVA, demonstrated the company’s applied helium and hydrogen experience, ‘presenting Helium 40’ ISOs’.
Alongside slides showing its experience in ISOs and nitrogen shielded tanks, he highlighted LHe Cryostat, GHe cooler and liquid helium Dewars, which are ‘coming soon’ (200-1,000 litres in development). He also promoted Helinox (91 and 175 psi) with LHe holding time of 40 days and 41,000-litre capacity.
In a status update, he said it has undergone extensive design engineering and analysis, manufacturing of the prototype, and testing of liquid nitrogen and liquid helium, with a view to launch early next year.
Phil Kornbluth, Founder and President of Kornbluth Helium Consulting, presented a series of market update slides via a pre-recorded presentation and Q&A.
He said the Gazprom-Amur gas processing project will be the single biggest factor affecting helium markets in the next four years, and it will be a very low cost product (sub-$200mcf) until initial price reopens, as pricing was established pre-helium shortage 3.0 with inflation-based indexation.
Other major factors contributing to 4.0 shortages are the outage of BLM’s Crude Helium Enrichment Unit, planned maintenance in Qatar, natural gas from Algeria partially diverted from LNG production to undersea pipelines to Europe, depletion of feed gas for Darwin’s plant in Australia and fire at Haven KS gas processing plant. Contract prices will continue to experience significant increases driven by cost shocks from Qatar and ExxonMobil, and spot prices are likely to remain elevated.
But he said modest demand growth of around 2-4% will be driven by construction of new water fabs, with electronics surpassing MRI as the leading application.
Reflecting on the divergent dynamics within the market, he said, “The worst of Helium 4.0 shortage should be behind us if BLM is able to maintain stable operations and 2023 may be a year of transition to ample supply but it depends on timing and magnitude of Amur’s production – the restart and ramp up is likely to be delayed.
“Prices should moderate when Amur supply enters the market, and supply should be plentiful in 2024 but it’s not a sure thing, given uncertainty about Ukraine and Russian sanctions.”
To watch gasworld’s Helium: Markets Reimagined, Part 2 webinar, click here.