Up, up and away: Canada's largest helium facility part of a rising industry for Sask.
Two months after starting production, Canada’s largest helium purification facility promises to expand Saskatchewan’s resource base, while using oil and gas infrastructure already in place.
North American Helium Inc. (NAH) owns and operates the $32 million facility near Consul, Saskatchewan. After realizing the potential helium supply in the area, the company spent the past two years designing and procuring the equipment for the facility. Construction began in December 2020, with production starting on May 1st, 2021.
“The industry has really taken off. I think it's exciting. It's certainly something that has great growth potential here in Saskatchewan,” said Marlon McDougall, NAH president and CEO.
THE HISTORY OF HELIUM IN SASKATCHEWAN
In the 1950’s and 1960’s, oil and gas industries drilling in southwestern Saskatchewan discovered helium concentrations in nitrogen carrier gas.
“From a drilling perspective, you find helium the same way as you find oil and gas: you drill for it” said McDougall. “A lot of the service companies are the same. A lot of the processes are the same.”
Helium plants have been around for more than half a century, however McDougall said it’s “not something that has been done a lot in Canada.”
According to the province, “Canada has the fifth-largest helium resources in the world, with significant underground reserves in Saskatchewan.”
Supply shortages of helium over the past few years, combined with increased global demand for helium has lead to renewed interest in the industry.
NAH said it has since drilled to deeper zones in the formation, and found additional helium that wasn’t known when the wells were originally drilled 60 years ago.
HOW IS THE HELIUM PRODUCED IN SASKATCHEWAN?
In Saskatchewan, helium is largely carried in nitrogen gas in the ground.
“In a lot of jurisdictions, there's more methane than there is helium, there are only traces of helium, and you have to separate them off. So there's that that by-product of hydrocarbon production,” said Bronwyn Eyre, minister for energy and resources.
“In Saskatchewan, we have it coming out, largely with nitrogen, and in higher concentrations.”
Eyre said this makes Saskatchewan’s helium production significantly more environmentally-friendly than in other jurisdictions.
“This is also a very low co2 equivalent operation, so our emissions are low. I think that is a great thing given, you know, society today and the focus on climate change,” said McDougall.
At NAH’s facility, McDougall said 95-to-97 per cent of the total gas stream that comes out of the ground is nitrogen. Because the atmosphere is approximately 78 per cent nitrogen, NAH vents the nitrogen back into the air. The helium is what is captured at the end of processing, after the nitrogen and other impurities are removed.
“The helium is what is left. Then it's compressed to high pressure and put onto trailers and the trailers are then pulled anywhere in North America,” said McDougall.
The facility processes 140 MCF of helium per day. In a year, the plant aims to produce 50 million cubic feet of purified helium, the equivalent of about 400,000 party balloons a day.
THE NEED FOR HELIUM
Helium has many uses, beyond inflating party balloons. The gas is used in medical research, electric vehicles, nuclear power, fibre optics and industrial manufacturing.
“The big tech users, the ones that are really driving the helium demand in the current day and age, (are using) it for semiconductors,” said McDougall. “The other one is space exploration. So people like Jeff Bezos and Elon Musk and the space race that goes on everywhere. Every rocket that goes into space uses a tremendous amount of helium as well.”
McDougall said helium isn’t widely found around the world, as it requires very specific geological attributes to generate it.
“I think, most importantly, is the supply in North America is declining. North America used to supply 65 per cent of the world's helium and that's dropping now. It's expected to be below 25 per cent by the year 2030,” he said.
Currently, the majority of the world’s supply of helium comes from the United States and Qatar, but new sources are being discovered in Russia as well.
“I think there is also some motivation to have North American supply, that's also considered, you know, geopolitically stable comparatively,” said McDougall.
REUSING OIL AND GAS INFRASTRUCTURE TO PRODUCE HELIUM
Eyre said the helium industry complements and builds on the province’s oil and gas sector.
“We have very skilled service sector workers who (have) great experience in drilling wells, oil and gas wells in Saskatchewan, who can apply that same expertise to drilling helium wells,” said Eyre. “We can see a lot of applications for carryover.”
“I look at it as just being another leg on the stool, from a resource perspective,” said McDougall. “It is just a demonstration of the diversity of opportunities that there are still in the resource sector.”
AIMING FOR THE SKY
In total, Saskatchewan has three helium purification facilities, two of which are owned and operated by NAH.
The province said there are nine active wells in Saskatchewan, and 24 currently in the drilling process. Eyre said this industry could have very high economic potential for the province.
“If we can make 10 per cent of global market share by 2030, 100 wells is very possible based on the reservoirs we have,” said Eyre. “That could mean hundreds of millions of dollars in exports in capital investment, and hundreds of jobs.”
As for NAH, McDougall said the company expects to announce it’s third plant in the six to 12 months, and eventually build a regional liquefier to further process the helium on site.