Helium industry begins to take off
By COLLIN GALLANT on June 22, 2021.
cgallant@medicinehatnews.com@CollinGallant Western Canada’s still infant helium industry is expanding from a base in southwest Saskatchewan, eastward in that province and into southeast Alberta and Montana. Several companies exploring for the high-priced industrial gas have announced new drilling and facility projects this month. Another is reportedly working near Medicine Hat and yet another new entry has secured drilling rights on both sides of the Alberta-Montana border. It comes as both provincial governments are promising to nurture the sector, and production comes online as new drilling programs – though relatively small – are announced. “Several companies launched helium production in Alberta in the second half of 2020, with additional companies expressing potential interest in development,” reads a statement from Alberta Energy Minister Sonya Savage. “Alberta has several competitive advantages in this sector … close proximity to the U.S. the world’s largest helium consumer … and a regulatory structure for helium that is competitive to other jurisdictions such as Saskatchewan.” Saskatchewan’s energy ministry states there are nine active wells in the province and 24 in the drilling process after relatively little happening in historic helium fields dating from the 1960s. Now it’s offering a 15% royalty credit on new facility costs under an oil and gas expansion program. Alberta currently offers a similar program for petrochemical facilities, and last year cemented a helium royalty rate it says will bolster the province’s ground-level sector. Chris Bakker, head of Avanti Energy, says the royalty will certainly draw more activity into Alberta, though he says the level of activity is already ramping up swiftly. “Saskatchewan was much earlier in its regulatory (framework) so Saskatchewan was a natural starting place, but there are opportunities in Alberta,” said Bakker, who’s firm entered a joint venture to explore for helium on a 2,750-acre lease in Petroleum County, Mont., near Lewiston, in late 2020. In March, it paid almost $360,000 for the drilling rights to four sections of land near the Port of Aden, directly south of Foremost. This month the company announced an additional 50,000 acres just across the border in Montana, and is planning three wells in 2021. That includes its first in Alberta, where only one other company, privately-held Thor Resources, is known to have produced helium volumes. “We see a lot of potential. Helium won’t be as big as oil and gas in Alberta,” said Bakker. (Advanti also produces gas in northern Alberta). “But for the province it’s a nice fit.” Four years ago, the City of Medicine Hat made headlines with a limited program drilling for the niche element, which is formed deep underground and becomes trapped in pockets of non-porous rock. Once the elusive deposits are discovered by somewhat conventional drilling it must be compressed and shipped by truck, not pipeline. More than four-fifths of helium is used in high-tech and industrial manufacturing, welding or industrial applications. Only 17% is sold for “lifting purposes” like party balloons, according to the U.S. Geological survey, which considers it a strategic resource. That designation, and a steep rise in price, has led to heavy promotion in investment circles about the potential of domestic production. Medicine Hat shelved its own ambitions years ago, farming out several test wells it drilled in the Milk River area, but officially remains interested in the developing sector. This month, major explorer North American Helium stated it has the operating base in the southwest corner and cash flow to proceed with exploration without seeking new cash from investors. Royal Helium says it will launch a seven-well drilling program, including more work to bring wells near Climax, Sask. into production and new holes near Bengough, south of Moose Jaw. North American Helium also announced June 7 it had successfully started up its $32-million purification plant near Consul, Sask. – its second such plant southeast of the Cypress Hills. It is now planning a third facility to open in 2022. The company states its helium production volume at 60 million-cubic-feet per year, sold to private-sector users at US$119 per 1,000-cubic-feet from the U.S. strategic reserve in 2019. Thor Resources, a privately held producer that does not comment publicly, has developed operations in the Aden area over the past several years. Several other leases in the area are being offered in range between Writing-On-Stone Provincial Park and the Onefour Historic Rangeland at the province’s drilling rights offering on July 21. 24-23
