Helium development ramping up in SW Sask.
By COLLIN GALLANT on June 5, 2020.
cgallant@medicinehatnews.com@CollinGallant A flurry of new activity in helium development is taking place in southwest Saskatchewan just as the Alberta government begins courting more investment in this province. Two proposed facilities to process the inert element that is increasing in price and demand for high-tech applications are slated to be built over the next year close to drilling sites south and east of Cypress Hills interprovincial park. Calgary-based North American Helium will build a $20-million purification plant near Battle Creek, on the southeastern slopes outside the park, thanks to successful financing rounds and incentive programs from the Saskatchewan government. Saskatoon-based Royal Helium is continuing a drilling program near Climax, Sask., and recently announced a partnership with the Saskatchewan Research Council to develop a processing and refining facility in the south region. Announcements in late May come weeks after the Alberta government established a royalty rate on par with Saskatchewan in hopes of establishing a helium sector here. As well, the News revealed, that the City of Medicine Hat had farmed out its own limited helium drilling rights, but is still observing activity in hopes of luring a major refining facility to the Gas City. “We remain involved in the commodity and remain interested in its commercial possibilities in Alberta and Saskatchewan,” stated city energy commissioner Brad Maynes in an email to the News on May 14. “Helium is a complicated business with many factors but certainly a competitive royalty with Saskatchewan should bring more activity and investment to our province.” Medicine Hat’s petroleum production business announced in late 2017 that it would engage in a limited drilling program for the element that is used in high-tech manufacturing and has been found in quantity in neighbouring regions in Saskatchewan. The belief was that similar geology that captures the naturally forming gas – which is capture in non-porous domes underground – exists under extreme southern Alberta as well, though it has never been commercially produced in the province. The city’s analysis is that a larger “liquefaction plant” would be required if the sector grows large enough, and as an established senior oil and gas producer, it could bring smaller, upstart companies together around a centralized facility in southeast Alberta. New purification plants outlined in late May would handle initial processing of production that’s coming online from recent wells. “The new facility at Battle Creek represents a step change for North American Helium, as we transition toward self-sustaining growth for both our organization and the helium industry in Western Canada,” said Nicholas Snyder, CEO of North American Helium. The company has ordered equipment for the plant from Air Liquide, a global specialty chemical production giant. Work could be complete in July 2021 on what would become the largest such plant in Canada, and second in North America. The facility will also benefit from drilling incentives that see provincial sales tax exempted on new activity and the potential for a royalty credit for up to 15 per cent of the capital cost of the facility. Last month the Alberta government set its first-ever helium royalty rate at a level equal to Saskatchewan’s longstanding rate of 4.25 per cent, stating that rate certainty would bolster “soaring interest” in the sector. Helium wells are considered economically viable when concentrations of the element are at levels above about 1 per cent of well-head production. Due to the specific properties, purification needs to take place relatively close to well sites in local collector networks, but further concentration into liquid form for transport in specialized containers is required for wider export. Interest in the niche gas has spiked due to overseas demand and rising world prices due to the U.S. government’s decision to close out its strategic reserve several years ago. 19-18
