Weil Group eyes growing helium market with $10-million plant in Mankota Saskatchewan
- 4 Aug 2016
- The StarPhoenix
- WILL CHABUN
Helium odd, impressive resource
Weil Group eyes growing market with $10-million plant in Mankota
Our aim, frankly, is to get to liquefied production because then the world is your market. … We’re the first mover up here and we aim to keep it that way.
It’s pretty close to a wonder element.
Clean and inert, helium is used in MRIs and other sophisticated high-tech gear. When representatives of computer chipmaker Intel testified before the U.S. Congress several years ago, they worried a shortage of helium would hurt their production.
And that’s why it’s coming out of the ground in a pasture near Mankota, southwest of Assiniboia.
“There are uses out there we can’t even begin to fathom,” said Jeffrey Vogt, CEO of Weil Group Resources, which owns the new plant.
He and Tobias Keller, an executive VP of Linde Engineering, the German firm that built the plant, cut a ribbon — held up by heliumfilled balloons, of course — on Wednesday morning to mark the official opening of the plant. It cost upward of $10 million and uses new production technology that makes it unique in Canada and one of only a few in the world.
As explained by Vogt, helium is an odd, but impressive, resource.
Odd? That’s because for many years, Uncle Sam has kept a huge volume of it in a storage cavern near Amarillo, Tex., setting a price that was a function of how much was there and how much it cost to store, “and not about a market price,” Vogt said.
But in 2013, the U.S. government decided to reduce the amount in storage, opening the door to a market price — and to commercial ventures like this one.
That reserve, once 35 billion cubic feet, is down to about seven billion. So it’s depleting even as new uses and markets — like the industry-heavy east coast of China — are found for it.
“That’s why new sources of helium are coming to the market place,” Vogt said.
“We had a significant crisis of supply in 2013 and prices rose so much that the folks who put helium into balloons said, ‘we just can’t do it any more!’
“But for critical high-tech applications, it’s a growing market segment.”
What used to be “lifting ’ applications 20 or 30 years ago, today account for only five to eight per cent of the market. “From 30 to 40 per cent is MRI machines’ cooling cell magnets for the likes of Intel and AMD and their chip wafers, there’s nuclear applications. All manner of stuff,” said Vogt.
An inert, naturally occurring element, helium is typically found where there’s natural gas. Saskatchewan had a production facility in the Swift Current area from the 1960s until about 1984.
Worldwide, the world’s leading producing nations are Qatar and Algeria. Current use is about seven billion cubic feet per year.
Weil Group’s Mankota facility can trace its roots back to oil exploration work done around 1960. It employs six people, all local, and Vogt figures it will have a production life of at least 10 to 15 years.
Reduced to its basics, this plant’s equipment takes the gas from the ground, purifies it, compresses it and loads the gas — remember that it’s inert, not explosive — on to special trailers that take it to market. “Our aim, frankly, is to get to liquefied production because then the world is your market.”
Because of the peculiar nature of the helium market until recently, people have been “reluctant to put a bit on the ground and do what we’ve done,” Vogt said.
“There are a couple of small producers and some plants downstream of the Amarillo storage facility and an Exxon natural gas plant in Wyoming. Weil Group is looking at additional sites on the Canadian Prairies.
“We’re the first mover up here and we aim to keep it that way.”