The keenly anticipated Qatar 3 helium plant is still subject to well-documented delays, yet wed understand the prospect of a further Qatar 4 plant is understood to be in consideration. The Qatar 3 plant is the next significant new source expected to enter the global helium market and has long been the source of speculation concerning its start date. At the heart of the global helium industry is a reliance on a few mega-sources. Around 75% of all the helium consumed around the world is produced at three locations – Ras Laffan Industrial city in Qatar, ExxonMobil in Wyoming, US, and the BLM-operated US Federal Helium Reserve in Amarillo, Texas (US). It has long been known that the latter, the world’s biggest helium resource, is on a timer to depletion and that by 2021 we will face the reality of a new-look helium business altogether. The industry has been scrambling to bring new capacity online around the world and unearth innovative new means of sourcing, while end-users have been actively pursuing recovery and recycling technologies.
Helium supply tightens again
The Qatar 3 plant has therefore been keenly awaited. It was revealed back in January (2018) that the 425 MMCF/yr project is likely to be delayed until at least 2019 due to problems with the pipeline that will transport feedgas to the Barzan Gas Processing Plant. Since then, local reports in Korea suggest a multi-billion dollar dispute is in-progress between Hyundai Heavy Industries (HHI) and Barzan Gas Company, the latter essentially being the source of feedgas for the keenly anticipated Qatar 3 helium plant. The dispute is reported to concern responsibility for repair of a gas leak in one of the upstream pipelines that is used to transport gas to the Barzan Gas Processing Plant.
Pipeline leak delays Qatar III helium project
Despite the issues that have delayed the Qatar 3 project, the possibility of a Qatar 4 helium plant is thought to already be under serious consideration. Qatar currently supplies around 30% of the worldwide helium demand. All Qatari helium is sourced from its natural gas production as an associated product, along with popular condensate, propane, butane, naphtha, and sulfur. It is not commonly known that Qatar holds a helium reserve of about 360 billion standard cubic feet (bscf), equivalent to more than 50 years of the present global demand – making it likely to hold a position as the foremost global exporter of helium throughout the next decade. Against this backdrop, on 20th March 2018, local daily publication The Gulf Times reported the news that Qatar had awarded its North Field expansion contract to execute the Front End Engineering and Design (FEED) of the onshore facilities to Japan’s Chiyoda Corporation. The new onshore facilities (three new LNG mega trains) will produce an additional 23 million tonnes per year of LNG. The FEED award announcement by Qatar followed the Minister of Energy and Industry, Dr. Mohamed bin Saleh al-Sadah’s keynote address at the 6th LNG Producer-Consumer Conference held in Tokyo, Japan in October 2017. H.E. Al-Sadah reiterated Qatar’s determination ‘to remain a leading player and a reliable supplier of LNG and said lifting the old North Field moratorium will result in an increase in the country’s LNG production from 77 million to 100 million tonnes per year by 2024. Iran also has access to the North Field (a.k.a. South Pars) natural gas resources but is thought unlikely to attempt to develop it in the next 5-10 years, hampered as it is by the currently uncertain political and economic climate, including the impending economic ramifications of the recent US withdrawal from the Iran Nuclear Accord. As a spinoff of Qatar’s onshore LNG expansion project, the country is strategically positioned to supply an additional 800-900 helium ISO’s yearly (for example, an estimated average of 950,000 standard cubic feet (scf) per ISO) either through a new Qatar 4 Helium Plant altogether or a less probable debottlenecking option of the existing Qatar 1, Qatar 2, and/or Qatar 3 facilities, which have to be commercially evaluated by the Qatar Helium committee. Helium market entry timing would be crucial for a successful new Qatar 4 plant, with the planned Russian Amur 2,000+ helium ISO supply set to enter the market starting in 2021. Whether it is ‘the early bird that catches the worm’ or ‘the second mouse that gets the cheese’ scenario remains to be seen.
Helium Summit 2018
All of these dynamics mean the global helium business is in the midst of significant transition. With the theme Transitioning To Life Beyond The BLM, gasworld’s Global Helium Summit 2018 will provide insight into the major issues facing the global helium business including the declining capacity of the US BLM Helium Pipeline, the future privatization of the BLM’s helium assets, and the anticipated emergence of Gazprom as a major player in helium markets.
Helium Summit 2018
A wide-ranging agenda will feature presentations from key industry executives and thought leaders that will help participants assess the impact of the important changes facing the helium business. The event, which will take place at the Marriott Marquis Hotel in Houston, Texas from October 3 – 4, 2018, and will also provide an unrivalled opportunity to network with a veritable ‘Who’s Who’ in the global helium business.
About the author
Luke Manickam is an independent helium consultant and founder of LM Intelligas Sdn Bhd, and has worked for multinationals over 25 years in the oil and gas industry, with some 15+ years of direct helium industry experience in world-scale projects, from tender development and management through to marketing, trading, and sales and public events/awareness.