One result of the recurring shortages that helium markets experienced during the last decade has been an unprecedented amount of interest in exploring for helium among small start-up companies.
Helium shortages 2.0 (2011-2013) and 3.0 (Q1 2018-Q1 2020) received frequent attention from the media, while driving prices for helium to levels where helium production from natural gas with uneconomic concentrations of hydrocarbons became economically viable for the first time. It is not surprising that entrepreneurs, many with backgrounds in oil and gas exploration or mining, picked up on the ’Helium Story’ and established companies to explore for helium or pivoted their existing companies toward helium exploration. As I write this article, an estimated 30 or more small companies are involved with helium exploration primarily in the Southwestern United States, Saskatchewan and Alberta, Canada, Tanzania, Australia and South Africa.
Before going further, it is worth noting that about 95% of the world’s helium supply is produced as a by-product of either natural gas processing or liquefied natural gas (LNG) production. As the hydrocarbons contained in the natural gas are purified, the inert components of the natural gas are separated and vented to the atmosphere. When there is a sufficient amount of helium in the vent gas, there is the possibility of further processing this vent gas to purify and, in some cases, liquefy the helium. In these situations, where helium is a by-product, or co-product, most of the costs of exploration, drilling, transportation and gas processing are borne by the hydrocarbon products.
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