By Collin Gallant on November 2, 2017.
A plant to compress and concentrate helium for export could be operating in Medicine Hat in 2019, according to a private company actively exploring for the niche industrial commodity in Western Canada.
“We want to get rocking and rolling on this thing,” said Jeff Vogt, CEO of the Weil Helium Group, which is in “advanced talks” with the City of Medicine Hat to locate here.
“We’ve got the proven reserves to feed the liquefier, the technology (ready to order) … Our objective is, given our window, we want to be running in mid-2019.”
Vogt said it will take more than a year for highly specialized equipment, valued at US$15 million, to arrive.
The construction phase could employ up to 50 people, though operating the highly automated plant would require only a small staff.
Most employment gains would come in trucking the gas from sites in southwest Saskatchewan where last year the company opened a $10-million concentrating facility in Mankato, south of Swift Current.
The gas can’t be transported by rail or pipeline. Once compressed into a liquid, the gas would sit at a temperature several hundred degrees below zero, then trucked to ocean ports or to customers elsewhere in North America.
The City of Medicine Hat’s own plans to launch a helium drilling program made headlines this fall with administrators saying it could provide revenue as well as draw new local industrial projects, or high-tech industries that require the gas.
Officials from Weil and the city stated talks have begun regarding a possible supply agreement from city wells, should they strike the rare gas that naturally forms underground.
Vogt said the plant is scalable, and could handle outside suppliers, but the facility could run on the company’s own reserves, which he states are 2 billion cubic feet.
The plan is to market 200 million cubic feet per year from a Medicine Hat facility.
City officials welcomed the announcement.
“We were able to identify this opportunity and are pleased to support the Weil Group’s plans to invest in Medicine Hat,” said Mayor Ted Clugston in the release.
“Local business investment creates employment and future revenue for our city.”
Later the mayor said locating the plant here would help the city attract high-tech manufacturing interests that depend on the inert gas.
“We’ve been in talks about irons in the fire — ‘irons’ plural — and this is one of them,” said Clugston.
Helium is often thought of as useful for party balloons, but increasingly the extremely rare gas in crucial in modern manufacturing and high tech industries.
It can be captured in drilling similar to traditional natural gas, if a reserve is found, but is gathered differently since it cannot be readily sent through pipelines.
It is often concentrated on site, then shipped for further refining. The gas must be compressed and cooled to several hundred degrees below zero so it can be transported as a liquid.
Vogt said stable and competitive energy rates in Medicine Hat make it an attractive site for the enterprise. It is geographically central to a number of current and proposed well sites.
“There’s significant energy requirement,” said Vogt. “We’ve been in discussions with the city (about supply)… we have our own reserves in both provinces.
“(Geographically) Medicine Hat is central to our prospects.”
Helium is about 100 times more valuable than natural gas, but is found in much smaller volumes.
Global helium demand is estimated at about 6 billion cubic feet annually, mostly supplied from a dwindling strategic reserve in the U.S. and production in Qatar.
City drilling update
In September the News incorrectly reported that a store of helium had already been discovered by City of Medicine Hat drilling contractors. In actuality, helium-specific exploration was planned to began that month, and this week city officials said delays have put off drilling to this point.
A total of three helium wells are planned to be drilled by the end of the first quarter of 2018, according to city petroleum division manager Brad Maynes.