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Global Helium Supply Sustainable Helium Business Solutions
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  1. Global Helium SupplySustainable Helium Business Solutions Walter L. Nelson Air Products and Chemicals, Inc. 1

  2. Today’s objectives Where does helium come from? Why is helium important and where is it used? What does the helium market look like? Where do we get our helium today? Will we run out of helium in the future? How does helium get to market? What is causing the current helium shortage? How does US Legislation impact global supply? How to conserve helium? What is helium recycle?

  3. Where does Helium come from? • Only found in certain natural gas fields • Where gases formed together and capped by impermeable rock By-product of natural gas production Formed by the radioactive decay of heavy elements in the earth’s crust (Uranium and Thorium)

  4. Why is Helium important? Fiber Optics Pressurizing and Purging Cutting and Welding Lifting Electronics Medical Imaging (MRI) Diving 4

  5. What is the market demand? Source: 2012 CryoGas International Source: 2012 Gasworld 5

  6. Where do we get Helium today? 4 MCM 0.15 BCF Poland 3 MCM 0.1 BCF Orenburg Riley Ridge 130 MCM 4.9 BCF <1 MCM 0.01 BCF 10 MCM 0.4 BCF Arzew China Skikda Other Qatar 16 MCM 0.6 BCF Hugoton & BLM System 4 MCM 0.15 BCF Australia Global Helium supply estimate ~ 168 MCM or 6.3 BCF 6

  7. Helium in the future? Estimated worldwide helium reserves • 50 to 70 years supply @ 3-5% CAGR growth rates • 200 years supply at current demand rate In place demonstrated (measured + indicated) which are currently economic, marginally economic and some that are currently sub economic 7

  8. New Helium supply starting 2013 Riley Ridge 10 MCM 0.4 BCF 5 MCM 0.2 BCF Skikda Qatar II 34 MCM 1.3 BCF 8 Potential 28% increase in global Helium supply ~ 49 MCM or 1.8 BCF

  9. TRANSFILL AND PACKAGING PRODUCTION, STORAGE, LOADING AND SHIPPING SALES & DISTRIBUTION Bulk Liquid Trailers (Containers) LHe 11,000 gal Tube Trailers BHe 180,000 cf Tube Trailers, Banks, Modules LHe 11,000/15,000 gal Cylinders Helium, Specialty Gases Dewars LHe 11,000 gal Iso Containers Worldwide Depots How does Helium get to market? CUSTOMERS 9

  10. What’s causing the shortage? • Increased demand • Demand is currently constrained by supply (Sold-out!) • Decline in helium extraction from natural gas • Production shift towards shale gas and oil • Natural production decline in existing gas fields • Fragile economy: lower LNG and CNG demand • Disruptions in helium supply • Planned and unplanned plant outages • Production allocations on the BLM pipeline • Delayed on-stream for new helium plants • Global supply will remain tight through 2013 • Until new helium sources begin production & ramp • Until natural gas demand recovers 10

  11. US legislation impact on supply? • Helium Privatization Act expires on 31 Dec 2014 • BLM provides ~30% of global helium supply • Modeling predicts 10-12 BCF of recoverable helium will remain in the reservoir after 2014 • Successor US Legislation is required • Extend BLM operations through 2020 & beyond • Minimize market disruption while new sources are developed to replace USBLM as it declines 11

  12. How to conserve Helium? • Minimize system losses • Helium supply system audits • Eliminate system leaks – frequent inspections • Turn off supply when not in use • Reduce consumption • Improve thermal performance for cryogenic systems • Operator education – use only what is necessary • Recovery and recycle • Use of alternatives • Different mixtures for welding and analytical applications • Balloons filled with air – suspended or attached to sticks • Substitute other decorations or banners 12

  13. What is Helium recycle? • Molecule capture at the point of use • Vacuum or positive pressure collection • Recovery and storage • Accumulation and compression • Purification • Membrane, Adsorption or Cryogenic • Analysis & recertification • Recycle • Compression: high pressure gas • Liquefaction: cryogenic liquid 13

  14. Conclusions • Sustainable helium business • We must manage this finite resource • Investments are necessary • Natural gas processing with helium recovery • Increase recovery and recycle • Conserve helium at the point of use • Legislation is required in the United States • Extend the BLM operations: ~30% global supply 14

  15. Thank you! 15