Global reserves of helium are generally located in the United States, Russia, Qatar, Algeria, and Iran. More recent discoveries have occurred in Canada, Southern Africa and Australia.
The United States has the world's largest proven reserves and historically was the world's major producer, 75% in 2010. However, the depletion of the BLM Strategic Reserve together with new supply from Qatar has lessened its role. The US share of helium production is forecast to decrease below 20% by 2030.
The largest reserve of crude helium was owned and managed by the US Bureau of Land Management, located in Amarillo, Texas. This reserve was set up in 1960 as a strategic reserve.
In 1996 the The Helium Privatization Act was passed to sell off the reserve and pay off the plant's debts. The effect was to suppress the price of Helium for more than a decade.
In 2019 the BLM held the last crude helium auction with the Federal Reserve reaching its minimum target level of 3 Bcf. The remaining stockpile is mandated to be completely distributed by the latter half of 2022.
The sale and depletion of the Federal Reserve has removed a sizeable portion of helium from the global market. This reduction in supply combined with increasing demand in high tech fields has resulted in an upward trend in price for helium since 2016.
Helium is most commonly extracted by fractional distillation from natural gas.
Gases are separated by exposing the crude helium to increasingly lower temperatures. Helium has the lowest boiling point of all elements, therefore the other gases become liquified first and can be separated from the helium.
In the final purification phase, activated charcoal is used to achieve pure Grade-A helium.
The Helium is separated from a mix of gases based on its affinity for an adsorbent material - such as zeolites or activated carbon.
The absorbent is used as a trap, adsorbing the helium gas at high pressure. Ideally, only the helium is absorbed, while all other gases in the mixture pass through the adsorbent material.
The process then swings to low pressure to release the helium which can then be captured.
This process is less efficient than cryogenic separation in terms of both energy use and helium lost during separation.
In 2021 the global market for bulk liquid helium was estimated at $2.8bn.
At a CAGR (compounf annual growth rate) of 5% the market is expected to reach a total valuation of $4.6bn by 2032.
In comparison the total size of the industrial gas market was $93bn in 2021 and expected to reach $127bn by 2027.
Unlike commodities such as oil and natural gas that have a central benchmark price (WTI, Henry Hub), wholesale pricing for helium is negotiated through private contracts among a few large suppliers.
There is no single spot price for helium and no independent authority that tracks supply and demand.
However the trend is clear, prices are increasing. Traditional sources in the United States (BLM and the Hugoton Gas Field) are in decline. Sources outside the US are generally in politically unstable regions (Algeria, Russia, Iran and to some extent Qatar) that have consistently demonstrated supply disruptions.
Year | Price | Note |
---|---|---|
2016 | $100/Mcf | Above $100/Mcf for the first time |
2018 | $280/Mcf | Final BLM auction price |
2021 | $600/Mcf | Typical contract price |
2022 | $1000/Mcf | Spot price for some retail buyers |
Phase | Application | Use |
---|---|---|
Liquid Helium, Gaseous Helium | Breathing Mixes, Cryogenics, Leak Detection, Pressurizing and Purging, Welding, Controlled Atmosphere | Aerospace and Aircraft, Electronics and Semiconductors, Nuclear Power, Healthcare, Welding and Metal Fabrication |
Drivers of future growth are the increasing consumption of helium in the electronics and semiconductor industry and quantum computing, as well as the growing usage in the healthcare and space industries.
The rise in consumption from the Asia Pacific Region (APR) reflects the dynamics of economic growth globally. The forecast for helium consumption in the APR over the next twenty years is to reach 5 Bcf per annum.
Most of the new helium supply continues to be as a by-product of natural gas production. If the world is to achieve carbon targets over the next few decades then natural gas production is forecast to decrease significantly.
There is a need for helium-focused producers to emerge in the coming years in order to replace existing helium supplies from hydro-carbon sources. The trend is towards helium as the primary economic driver and not as a by product of methane extraction.
Worldwide, helium is available from just a few sources. Five fields supply 80% of the world's helium. Disruptions at any of these fields generally has a notable impact on global helium supply.
Geopolitical tension in the Emirates in 2017 and Qatar's isolation resulted in disruption to 30% of the world's supply. More recently incidents at Russia's Amur Helium plant and conflict with Ukraine has highlighted the risk of foreign sources.
Helium is listed on the critical materials list of major economies such as the United States, the European Union, and China with the risk of supply shortages considered economically significant.
Helium is traded in bulk as a liquid product below its boiling point, close to absolute zero. Helium logistics are complex and require specialist expertise and equipment. The shelf life of the product is measured in weeks; it is a just-in-time product with a fragile supply chain that can easily be disrupted.
Helium's critical importance to industries such as magnetic resonance imaging (MRI) and semiconductor manufacturing means that any supply disruptions have a severe impact on these dependent industries.