It is the second most widespread element of the universe after hydrogen. However, on the ground, it is present only in modest amount in the earth’s crust where it exists in the form of residue of the radioactive decays.
From this modest amount, we evaluate it to 250 billion m3. Such amount is equivalent to 250 years average consumption. Few countries contend for the chance to have and market helium. Leading the way, the United States produces helium, followed by Algeria, Qatar and Russia. Only 12 helium fields exist in the world. So, Helium has the characteristic to be rare to be drawn, but the quantities available are sufficient. In parallel, the market is concentrated by few actors constraining the demand to undergo the fluctuations.
For what helium is used
This co-product of natural gas has multiple interests and uses. In the medical sector, it represents ¼ of the worldwide consumption. For industrial application, it is used to cool the magnets of the scanners in the medical imaging. It is also used for the manufacturing of electronic chips or optical fiber. In the liquid state, helium is the coldest gas on the ground (- 269°) and thus is used in cryogenics.
Used in medical, military, aerospace and industrial fields, helium has an excellent place following the various discoveries of the man. Tanks to its diverse and various uses, it covers a large demand for diversified applications.
The helium’s rank
Its defining feature is that it is more or less difficult to be extracte. Although present at the state of residue, it is not necessarily rare. Its price on the market is interesting for the buyer, but not always tempting for the investor.
Moreover, helium finds few concurrent solutions. Indeed, the alternatives likely to replace it result in an additional cost. As for the production of neon lasers or the manufacturing of optical fiber, although it is irreplaceable, the volume of the demand is too low so that helium can carry weight.
The market of Helium
The United States produces about 80% of the helium’s worldwide demand. Without the American fields, the deficit would range between 25% and 30%. Algeria markets approximately 10% of the worldwide consumption followed by Qatar and Russia.
The place of Algeria in the market was supplanted by Qatar since Americans were into partnership with Qataris for the development of the gas co-product. But the recent demonstrations of hostilities of Saudi Arabia, Egypt, even US president Donald Trump toward Doha could redistribute the cards and downgrade Qatar on the market of heliuM. Especially as for a few years, the blamed American reserves have not allowed so effective output any more. The American fields, profiting from a permissive law of 1920, had allowed the seizure of helium market. Nearly one century later, the principal importers like Japan are concerned and worried about a shortage.
The Algerian characteristic
In these times of economic “Redeployment” and budget deficit related to a drastic fall of the oil revenue, helium could offer an output alternative. First, because the helium gas fields exist and the Algerian reserves are deemed as second on the world scale. Then, if helium is not extracted from our natural liquefied gas fields, it is lost. This represents a waste. At the same time, two difficulties arise in the energy sector: penetrate the market of helium and find a buyer, then allow that the production of helium is profitable. Sold at two or three dollars for m3, Algeria had not fought much to recover the helium from its natural gas. The prices, compared to those of other products or resources do not encourage making investment. In addition, the reduction of the European gas consumption had not encouraged the investors. However, they turned their nose up at the future. Because in spite of the absence of helium shortage today, the indicators show that in spite of developments and searches, the risk is not completely excluded. Moreover, the new measures taken toward Qatar could offer to Algeria a new window, in addition to a growing demand coming from emerging countries like China and India.
Sonatrach and Helium
On a side note, different joint- ventures had come out in Algeria.
An association with German LINDE for the marketing of helium did not have the expected results in Skikda. As for Helios Company, another JV in Arzew, it seems that the added value escaped Sonatrach. All the attempts or setting up of JV with Linde, Air Liquid, for the French part or with Air Product for the American part did not have the expected impact. It is in Qatar that the foreign investments bore their fruit. Indeed, Air Liquid built in 2013 a giant unit fast tracking the country into the second position of helium producer in the world. The Russians also have ambitions in the recovery of helium from their natural gas. Great infrastructures were created and it is question of extending the production to Eastern Siberia, giving more opportunity to Russians to penetrate the market. A discovery was made in Tanzania, where a giant helium field came out. Not less than 10% of helium were discovered in gas pockets near volcanoes. The field represents at least 1.5 billion m3. A record to which it is added that this field coming from a volcanic activity will not be subject to the gas market, which is the case for the other helium fields, which are in fact extracted from LNG.
Although the American fields are growing old and that their stocks are reduced, the United-States intend to preserve their place of leader on a market witnessing a little competition. The Japanese, Chinese, Indian and European demand does not diminish enabling to prognosticate difficulties of meeting the needs. New actors as Russia will try to impose their offer, but it is not too late for Algeria to pose its cards, since the fields exist.