Australia’s only local production of helium is set to end in the coming months, but could a resource in the Northern Territory fill the void?
Key points:
- Australia’s only helium production plant will shut down in coming months
- Exploration for another source of helium in Central Australia is to begin this year
- Helium is used in MRI machines and the manufacturing of electronics
Since 2010, BOC has been Australia’s only helium producer, with the gas coming as a by-product from Santos’s Darwin LNG plant.
But with the feedstock for the gas plant due to run out in the coming months, Australia is about to be left with no locally produced helium.
BOC said it is actively looking for new feed gas sources, but “when the facility closes, we will transition to a full import model”.
What is helium used for?
If the first thing you think of when you hear the word ‘helium’ is party balloons and people inhaling the gas to make a funny voice, then you wouldn’t be alone.
But helium is an important gas for several industries.
It is used to cool superconducting magnets in MRI scanning machines, in nuclear energy production, in the manufacturing of solar panels and optical fibres, and more.
“The two big growing applications are electronics, where helium is used in the semiconductor manufacturing process,” said Phil Kornbluth, a leading US helium consultant with 40 years of experience in the industry.
“That is expected to grow at a very healthy rate in the coming years, with many semiconductor factories being built right now, and a lot of reassuring of semiconductor manufacturing in the West.”
Global helium shortage
Global demand for helium is around 6.5 billion cubic feet per year, but helium production is only around 6 billion cubic feet.
So, helium producers are currently having to reach into reserves to keep up with demand.
The shortage was brought on by demand increasing post-COVID-19 shutdowns and expected new supply from a Russian gas plant not eventuating after an explosion at the site.
Even with local supply due to run out and a global shortage, Mr Kornbluth said Australian helium consumers should still be able to source enough of the gas.
“Helium is a global business — if there’s a shortage of helium in the world, you’ll probably feel it in Australia, and if there’s ample supply in the world, you’ll probably have ample supply in Australia,” he said.
“But I would say that it is nice to be self-sufficient in a gas like helium.”
Potential helium source in the NT
The potential of a new Australian helium supply is being investigated by a joint venture between Central Petroleum, Santos and a private company called Peak Helium.
The joint venture plans to drill three wells in the Amadeus Basin south of Alice Springs this year, where it is hoping to find helium, naturally occurring hydrogen, and gas.
Helium is a small gas and often escapes into the atmosphere through cracks in rock, which is why it is so rare.
“The Amadeus Basin is fortunate because it has extensive areas of salt layers underground,” Central Petroleum chief executive Leon Devaney said.
“Salt is one of the few very good seals that traps helium, so helium does not go through the salt and accumulates.
“What that does is allow us to drill through the salt and access areas that potentially have very high concentrations of helium.”
Early estimate suggests large reserve
In an early resource estimate released this month, Central Petroleum says the Amadeus Basin in Central Australia could potentially hold around 44 billion cubic feet of helium.
That is around seven times the current global demand for the gas.
But Mr Kornbluth said it was unusual for Central Petroleum’s resource estimate to be done in-house, not by an independent expert.
“These are not proven reserves. These are calculations of a possible resource if a bunch of assumptions made by Central Petroleum turn out to be true,” he said.
“It is well known that there is gas that has helium in it in the Amadeus Basin, so there is helium there.
“But until some wells are drilled, and you have some further exploration, it is really, really hard to put much stock in a resource estimate of that magnitude.”
If the helium resource is commercialised, Central Petroleum expects the gas would likely be transported to Darwin for further processing and then sold to the local market.
“That would be a great way to provide very cost-effective helium to the Australian market, with any excess helium sent overseas to the global market,” Mr Devaney said.
“If we are successful, typically, there would be an appraisal program, and then if that is successful, we would move into commercial development.
“It’s not something that would happen overnight … but this could potentially have an impact on the global market if [the resource] is the size we think it might be.”
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