Calgary-based North American Helium (NAH) is proceeding with construction of the largest helium facility in Canada, the Saskatchewan government has announced.
The new facility will be constructed near Battle Creek, a hamlet of 1,500 people situated on the south Saskatchewan-Alberta border. Work is expected to begin in October, and the facility is scheduled to be in operation by July 2021.
NAH recently raised $39 million to fund the plant’s construction and its subsequent drilling program.
“The government has shown a commitment to the development of this industry in Saskatchewan, which will contribute new production needed to replace depleting natural-gas-linked helium sources in North America,” Nicholas Snyder, NAH’s chairman and CEO, said May 28.
Helium is an inert gas produced by the decay of uranium and thorium that can be trapped in underground reservoirs. Its unique physical properties make it vital for several high technology applications where there is often no substitute. Helium's low boiling point and non-reactive nature make it vital for the pressurization and purging of liquid fuels in rockets for space exploration and satellite infrastructure. Helium is also required for semiconductor manufacturing, specialized medical equipment and plasma welding applications due to its high heat capacity. A well-known but minor use is as a lifting gas in balloons and airships.
The Saskatchewan government estimates that helium prices have increased 160 per cent since 2017.
“Our Battle Creek project demonstrates that reliable long-term production of helium can be created from non-hydrocarbon sources, which means a smaller environmental footprint while still benefiting from the expertise developed in Saskatchewan’s oil service industry,” Snyder said.
“Helium production in Saskatchewan is set to take off,” said Saskatchewan Energy and Resources Minister Bronwyn Eyre “The building of this purification facility will enable the province to scale helium production and important export capacity.
The government said that incentives include expanding its provincial sales tax exemption for exploratory and downhole drilling activity and a competitive 4.25 per cent royalty rate for helium.
“We are fortunate to be operating in a jurisdiction with a supportive regulatory structure, favourable geology for helium production and a skilled workforce,” Snyder said.
In a separate statement, NAH said it has raised $39 million to construct the facility and fund a drilling program. The company said it has drilled 15 wells to date and is looking to drill up to 10 more wells by the end of 2020.