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Helium rocket ship

What do semiconductor manufacture, rocket launches and party balloons all have in common: Helium.

While you are on the beach in August Space X will launch 10 new Falcon 9 rockets mostly carrying its Low Orbit Starlink Satellite payload. That's one launch every three days and it matters for Helium.

Helium has the lowest boiling point of all elements at -269 degrees Celsius. It is a SUPER COOLANT. NASA is also a large consumer of helium buying about $50 million of helium per year to cool fiery hydrogen and oxygen gas as they exit the burner during rocket launches.

Rockets cool their jets with Helium:

Rocket launches for orbital rockets led by Space X were the highest ever in 2022 with 174 launches up from 131 in 2021: Space X alone plans to launch 99 rockets in 2023 up from 61 in 2022. Each rocket launch uses approximately one million cubic feet (1 Mcf) of helium and the Falcon 9 rockets are used on average for three separate launches. The implication is that even at current helium prices up ten times in the past five years, helium represents less than 1% of the total ~ $62 million cost of a Space X launch - the most prolific and lowest cost of US space travel.

Space X launch history per year:

However helium prices are NOT up ten times because of Elon Musk or Space X. Neither are party balloons important at less than ten percent of total demand. The main reason helium prices are up is supply from Russia is down.

Over 95% of the 6 Billion Cubic Feet (Bcf) of annual helium production is produced as a by product of natural gas which trades for about $3/Mcf or less. That is helium is over 100 times as valuable as natural gas.

The worlds largest helium producers are the worlds largest natural gas producers ie Qatar, Exxon and Gazprom and they mostly sell their by product helium to an oligopoly of industrial gas processing companies which include; Linde PLC who recently merged with Praxair a combined 45% of global helium processing, Air Products and Messer are three of the big five.

Helium supply has historically been geographically dominated by the United States with 50% followed by Qatar with 30% and Russia expected to eventually 20% of the worlds helium. The US Federal reserve of helium stored in salt caverns at the Cliffside facility in Texas has for decades made up 20% of world supply but last year was exhausted.

Russia was expected to be an important new global source of helium supply from Gazprom’s Amur gas facility in the far east but the facility blew up in January 2023. A restart of the Amur facility is expected in Q4 2023 but the timing is uncertain.

Helium Industry expert Phil Kornbluth predicts that in 2023 or 2024 Semiconductor Manufacture will overtake MRI Scanners as the dominant use of helium at about 23% of total demand.

While Russian gas will likely be exported to China through the Power of Siberia gas pipeline, the answer to the current US helium shortage may be closer to home in Canada.

Saskatchewan Province which in 2022 produced 60 Mcf of helium led by privately held producer North American Helium. Saskatchewan has the worlds 5th largest helium resources with unusually high helium concentrations of up to 2% helium unusually enabling primary production of helium. Saskatchewan even has its own (2021) Helium Action Plan which aims to produce 10% of global helium by 2030.

Actively traded primary helium developers include: Helium One (HE1 £66M Mkt Cap) Royal Helium (RHC C$80M Mkt Cap) and Avanti Energy (AVN C$49M Mkt Cap).

If you are still reading and are curious to know more, Arlington have arranged for global helium independent expert Phil Kornbluth to offer a Helium 101 Teach In, let me know and I will coordinate a time in the next two weeks.

The Helium Curious could ask Phil about why semiconductor manufacture have in 2023 surpassed MRI Scanners as the top usage of helium at around 23% of total global helium demand.

The United States and China are both the top space travellers and Semi Fab builders. While the United States has 40% of the worlds helium resources according to the United States Geological Survey (USGS), China has only 2% of global helium...

As I press send on this email its less than seven hours until the next Space X rocket launch...


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