The International «Helium 2013» Conference organized by CREON Energy was held at Hotel Baltschug Kempinski Moscow on October 23, 2013, with Gazprom Gazenergoset and NII KM as the Gold sponsors of the event, Air Liquide as its Sponsor, and Global Gases Group and Sauer Compressors as the Partners. The event was supported by Russian Gas Society, Expert Magazine, Platts Agency, and industrial news portal RCC.ru
Dr. Fares Kilzie, Chairman of the Board of Directors of CREON Energy, opened the first session with the welcome address to the conference participants. «Helium is a unique and strategically important product. Development of high-tech industries would be impossible without it», he said. Also, Dr. Kilzie mentioned the positive effect of preservation of the U.S. Federal Helium Reserve (FHR), as well as elimination of storage limitations and continued operation of the Cliffside facility. As far as Russia is concerned, development of helium industry in this country is directly determined by realization of the largest gas field development project in the Eastern Siberia. Thus Russia would become a key player in the helium market, and Moscow would gain the status of a world-level centre where helium-related decisions are taken.
Richard Clarke, Independent Process and Resources Consultant, based in Oxford, England, spoke about the changes in the world helium market configuration. As for the demand and supply balance in the world helium market, three alternative scenarios of its development can be expected for the period from 2014 to 2020, depending on the market situation. If the market maintains its current volumes, oversupply is expected. The 2% market growth rate would lead to shortage of supply in the amount of 30M cub.m, and the 4% market growth would double this figure. The most likely scenario is the second one. Key helium consumers are represented by the companies manufacturing MRT equipment and silicon slabs, as well as companies related to aerospace, physics, show business (aerostats and airships), and Internet providers. The main helium producers are located in Russia (Gasprom Dobycha Orenburg), Poland, Algeria, Qatar, Australia, the USA, India and (potentially) Iran. By 2015, according to the forecast, the geographical centre of helium production will shift from the United States to the Middle East, and by the year of 2030 a new centre of the helium market will be formed in Russia, due to large reserves of helium-rich gases in the Eastern Siberia, particularly in Chayanda and Kovykta fields.
Dmitry Mironov, Deputy General Director for Sales at Gazprom Gazenergoset, said that the only Russian source of helium for today was Orenburg oil and gas condensate field operated by Gazprom Dobycha Orenburg. Helium production has been a loss-making activity for Gazprom Group. So, it was decided to appoint, since January 2012, Gazprom energoset as a single dedicated operator of gaseous helium sales in the domestic market. Strategic buyers of this product are represented by healthcare facilities, enterprises of military-industrial complex and nuclear power industry, research centers and institutions, industrial facilities. Companies of the show business and advertisement industry buy helium too. In 2012, Gazenergoset sold 2.69M cub.m of gaseous helium in the domestic market; sales growth was 15%, compared to 2011. The expected sales volume in 2013, as well in 2014, will be approximately 2.78M cub.m. To guarantee satisfaction of the demand in full, the Company has started construction of helium liquefaction unit at helium plant of Gazprom Dobycha Orenburg with design capacity 4.2M liters a year. According to preliminary estimates, the unit’s utilization rate during the first year of operation will be 75%. The produced liquid helium will be supplied mainly to the domestic market. Launch of the facility is planned for the end of Q1 2014.
Oleg Ganushkin, Director for Business Development at NII KM, spoke on the prospects of Russian pure helium market. Firstly, he mentioned reduction of pure helium consumption volumes in the Russian market in 2013, which took place despite of the sales figures having surged in the beginning of the year, when the shortage of helium had ended, and the buyers were creating reserves of the product. Market consumption of liquid helium has fallen too. All above-mentioned setbacks have been determined by low growth rates of the Russian economy, the lack of new helium-consuming technologies, as well as by appearance of new generation of MRTs equipped with refrigerators that do not require helium refills. The prospective growth rates of 5-7 percent for the period till 2015 would be considered very positive, while the total estimated consumption volumes would be around 110-115 thousand cub.m. According to NII KM, the growth prospects are connected with the growing consumption of pure helium grades in the Customs Union countries (Belarus, Kazakhstan) and in such industries in the Russian Federation as nuclear power (transition to helium grades 55, 60, 70) and metal working (first of all, helium as a component of welding mixtures).
The opening presentation at the second session of the Conference was delivered by Air Liquide’s representatives: Pascal Doguet, Scientific Market Manager, and Bruno Weiss, Proposal Manager. They spoke on the Company’s activities in the global market and covered the Qatar Project in detail. In 2003, Air Liquide and RasGas signed a contract for construction of two helium processing and liquefaction units, Ras Laffan I & Ras Laffan II, with daily capacity of 9 tons and 20 tons of liquid helium, correspondingly. The first unit was launched in 2005, the second one – in 2013. By now, Qatar supplies 13 percent of the world helium, and by 2014, its share is expected to reach the level of 25 percent.
In addition, Nazim Khalli, MEDAL Development Manager, conducted a separate presentation of the Air Liquid subsidiary company that deals with development and implementation of membrane separation technologies. The audience was informed about key process parameters and typical application options of the developed processes that had been implemented at the facilities of such companies as ExxonMobil, BP, Shell, ConocoPhillips, Aramco, and others.
Development prospects of helium production in the Eastern Siberia were highlighted by Olga Maslova, Head of Division for Hydrocarbons Processing Economics at NIIgazeconomika. She said that future helium production in the Eastern Siberia is determined by availability of the market niche and resource base, and the possibility to create a cost-effective helium production chain, including its production, recovery and transportation. In the past two years, the global helium production volumes have exceeded the amount of 170M cub.m. The United States are holding the leading position in production of helium, their share in total production (including helium supplies from the Cliffside storage) in the past decade varied from 74.1% to 85.9%. However, this figure is declining due to launch of large helium facilities in Qatar and Algeria (with shares of 11.6% and 8.7% in 2012, respectively).
The United States hold the dominant position in the world structure of consumption as well. However, their share here dropped from 60% in 2005 to 36% in 2011, mainly due to intense growth of helium consumption in the countries of the Asia-Pacific, especially in China, which increased its share from 14% in 2005 to 28% in 2011. As a result of growing consumption volumes and depletion of helium reserves in the U.S. storages, the world market may face the shortage of helium equaling to 30-35M cub.m in 2020 and 90-140M cub.m in 2030, thus opening a market niche for additional volumes of helium produced in the Eastern Siberia.
The reserves of helium in the Russian Federation have been identified in 210 hydrocarbon deposits; estimated reserves amount to 9.2 bn cub.m. About 90% of Russian reserves of helium-containing gas are located in the Easter Siberia (38% in Irkutsk region, 42% in the Republic of Sakha-Yakutia, 10% in Krasnoyarsk region).
The helium plant construction projects are focused on development of the Chayanda and Kovykta fields. The share of helium sent to the underground helium concentrate storage facility from the fields may reach 50-70%, to the Belogorsk gas processing plant – about 30-50% of the total volume of produced helium. Storage of helium concentrate does not bring profit, and is a specific type of activity. The U.S. experience should be considered, and it seems reasonable to adopt the Helium Law, which would promote establishment of the federal reserve of helium with a minimum target level, and would budget state funding or co-funding (with private companies) to arrange storage facilities and purchase helium.
Nick Haines, Head Global Helium Source Development at Linde Global Helium, spoke about the amended legislation regulating the United States Federal Helium Program. In 1996, The United States government accumulated almost 1 billion cub.m of helium. In the same year, with the Helium Privatization Act, Congress enabled the Bureau of Land Management (BLM) to offer this substantial volume for sale by December 2014 on a straight line basis. 60 million cub.m annually provided over 30% of global helium supplies on a reliable regulated basis. As per November 2013, the Cliffside’s estimated reserves amount to 300M cub.m. By October 2013, all the debt incurred in procuring this helium was scheduled to be repaid. However, the 1996 Act failed to provide for ongoing funding for the BLM if any helium remained unsold, or to allow the BLM to continue operating and delivering the helium that had been sold. Therefore, a new act called The Helium Stewardship Act of 2013 was adopted. According to it, the Cliffside closure procedure will be as follows. Since October 2014, helium volumes sold through auctions will gradually grow. When the reserves are reduced to 100M cub.m, helium will be sold to federal-level consumers only.
Apart from the Cliffside reserve, the main and virtually sole source for helium is natural gas. Klaus Ohlig, General Executive Director at Linde Kryotechnik, presented the Company’s experience in creation of modern units designed to recover helium and С2+ fractions from natural gas. The engineering division of Linde Company is a leading player in the international plant-design market. This division provides the full cycle of works, including design, project management and turnkey construction of industrial facilities. The Company has built more than 4,000 plants world-wide, including the projects realized in Russia and in the distant locations in Siberia. The planned projects include construction of advanced units designed to recover helium and С2+ fractions from natural gas, for example, in the Belogorsk district of the Amur Region. Currently, the Company is working on the helium liquefaction project in Orenburg for Gazprom Gazenergoset. This facility will soon be brought into operation.
Sergey Molchanov, Director of the Helium Plant of Gazprom Dobycha Orenburg, said that helium concentrations at the Orenburg oil and gas condensate field varied from 0 to 0.055%. Modern helium production plants use natural gas with helium concentration from 0.1 to 0.6%. Gazprom Dobycha Orenburg Company has an experience of processing natural gas with helium concentration at 0.055%, and the design capacity is 15 bn cub.m per year. Thus, the recovery process used at the Plant is unique in worldwide terms. Unique also is a technology of helium storage in underground caverns formed as a result of washout of salt beds occurring at depth approximately 1500 m. This technology was used for the first time in the world at the Orenburg Helium Plant. In 2012, in order to enhance the commercial helium loading capacity, two additional stations designed to fill special tanks and containers were installed.
The conference organizers expressed special gratitude to Gazprom Group, the key player in the today’s Russian helium market, who determines the direction of its future development on a global level. Dr. Fares Kilzie, Head of CREON Energy, presented the Company’s representatives with a special award for significant contribution to development of the helium industry in Russia and wished them further growth and working successes.
The project on creation of a pilot helium recovery membrane unit is currently being realized at the Kovykta gas condensate field. This was a focus of the paper presented by Timophey Semikolenov, Deputy Head of Department for Prospective Technologies and Pre-Investment Studies at Gazprom razvitie. Gazprom applied the scheme of flexible regulation of commercial helium production volumes based on the market demand during helium-rich natural gas field development in the Eastern Siberia and the Far East. By 2030, volumes of helium production from the fields of the Yakutsk and Irkutsk gas production centers will amount to approximately 240M cub.m annually, while the estimated annual production of commercial helium, which can be possibly sold to the Asia-Pacific countries, is 60-100M cub.m. As planned, the excessive volumes of unsold helium will be recovered from gas in the field conditions, sent to long-term storage into the productive reservoir of the Chayanda oil and gas condensate field, and further to one of partially depleted helium-rich natural gas fields. It will require pumping of 9 to 12.4 bn cub.m of helium-rich gas (containing 2.9 to 3.7 bn cub.m of helium) to underground storages during a 32-year period. The two-stage membrane helium recovery process will be applied in the field conditions, in accordance with the Gazprom’s proprietary process solutions. Today, the pilot membrane unit has been manufactured by Grasys Company and delivered to the Kovykta gas and condensate field. Commissioning works and early testing of the unit are scheduled for November 2013. The full scope of works on the pilot membrane unit testing is expected to be completed in 2015.
According to the statistics presented by Vadim Udut, General Director of NPO GELIYMASH, the world market is ready to absorb helium from new sources in Russia. In the period till 2030, possible amounts of liquid helium from the Eastern Siberia to be sold in the regional markets are as follows: Europe – 15-20M cub.m a year; Asia – 45-55M cub.m a year; the United States – 20-30M cub.m; domestic market in the Russian Federation – 5-10M cub.m. The main rivals of Russia in helium export will be Qatar, Algeria, and Australia. As for the United States, they plan to use the most part of produced helium for their own needs. The competitive environment is very tense, so one should not be late with implementation of the Eastern Siberian helium projects. These new Russian projects could be realized by the domestic scientific and industrial complex. In order to pursue the successful helium policy, Russia should set up mass production of large-sized process and transportation equipment and create new helium distribution centers. Also, Russia should establish national strategic helium storage facilities under supervision of the Federal State Reserve Agency (Rosrezerv), which should secure the long-term helium production and consumption balance. Being one of the basic enterprises in the Russian helium industry, Geliymash is ready to invest its efforts into coordination of joint activities of Russian companies aimed to implement the Eastern Siberian helium projects.
Since 1992, the cryogenic complex of Nuclotron superconducting accelerator has been operated in Dubna (Moscow Region), providing large-scale production of liquid helium. This project was highlighted by Nikolai Agapov, Chief Engineer of High-Tech Physics Laboratory at International Intergovernmental Organization “Joint Institute for Nuclear Research””. In the near future, a new Nuclotron-based accelerator complex – NICA Heavy Ion Collider – will be set up. The current stage includes assembly and testing of pilot cryogenic equipment models. Commercial production of this equipment may form the basis for industrial helium liquefaction technology during development of new fields in the Eastern Siberia.
Summarizing the event, Head of CREON Energy Fares Kilzie characterized the controversies existing in the helium market as the costs of its reconfiguration accompanying the transition to the global market, and asserted that they would be eliminated in future. «In general, it would be good for Russia to adopt the best practices of the United States, with their Cliffside storage funded by the state. So far, the global market suffers from the continuous shortage of helium, and it will be the year of 2018 when Russia will have a good chance to enter gradually the world helium flows with the volumes as large as 60M cub.m a year», he mentioned.
