The worldwide helium market continues to be marked by uncertainty. The future of the US Bureau of Land Management (BLM) helium reservoir remains undecided and is awaiting legislation that will determine its role, as new sources of helium are delayed or are just now coming on-stream. Helium supply has been tight for almost three years and we expect supply to remain so into the first half of 2014 when the planned new supply sources are all on-stream.
The impact of prolonged tight supply on pricing has been felt by suppliers and end-users alike, but the impact on real demand growth can only now be contemplated.
On behalf of CryoGas International, J. R. Campbell & Associates, Inc. (JRCI) spoke with the helium experts and managers at major industrial gas companies and distributors to get the insider’s view of this critical market in these uncertain times. All are concerned about the future role BLM will play in the global supply chain, as that role is diminishing and is dependent on legislation being passed by the US Congress. To date, the House (H.R. 527) and Senate (S. 783) have somewhat different views on how the BLM should sell off the remaining reserve and how to set the price.
US Government’s Role in Helium
The US government’s role in helium was changed by the Helium Privatization Act of 1996, which directed that all but 600 million cubic feet of the helium stored at the BLM reservoir be sold off, at a rate of 2.1 Billion cubic feet/year (Bcf/yr), by December 2014 at prices sufficient to repay the federal helium program debt. The US government operates the crude helium pipeline system that includes the storage reservoir at the Cliffside Bush Dome and a 425-mile pipeline system originating at Cliffside and ending near Bushton, KS. This system is managed through the US Department of the Interior’s BLM Amarillo Field Office. The pipeline connects the nine privately-owned crude helium plants and six privately-owned helium purification/liquefaction plants located in the Hugoton Fields of Kansas, Oklahoma, and Texas.
... to continue reading you must be subscribed
