The Impact of the Iranian Conflict on Helium Supply
The Iranian conflict has had far-reaching effects, not only on oil supply but also on other critical resources like helium. The closure of the Strait of Hormuz has led to the suspension of Qatar’s liquefied natural gas (LNG) operations, which is a significant source of helium. Helium is a vital component in various industries such as medical imaging, semiconductor manufacturing, and defense. It is used in MRI machines, production of semiconductors, and defense applications.
This disruption has raised concerns about the global supply of helium, which was already constrained before the conflict. The demand for helium remains constant, making it difficult to reduce usage even when supply is limited. This has resulted in increased prices due to the inability to easily adjust demand.
Diversifying Helium Supply
The threat to helium supply security has prompted companies to explore alternative sources. HyTerra Limited (ASX:HYT), for instance, is looking into helium production from areas not affected by Middle East conflicts. The company’s CEO, Riley Kemp, highlighted that the US is a major producer of helium, with projects like the Nemaha project in Kansas showing promise.
Helium is typically produced as a byproduct of LNG operations, but it can also be found in natural reservoirs where radioactive elements decay. Interest in these natural sources is growing, with several companies exploring for and producing helium. These include Helix Exploration (AIM:HEX) and several ASX-listed plays.
HyTerra’s Helium Potential
HyTerra is considering helium for early commercialization due to its potential. Initial mud gas sampling has shown elevated helium concentrations, which could be commercially viable given the high price of helium. If flow rates are established at 5% helium, it could serve as an early revenue source for the company.
Production testing is set to start in Q2, with results expected mid-year. This data will help shape future drilling and pilot projects. All holes drilled so far have returned elevated hydrogen and helium gas shows, confirming flow potential.
Other ASX Helium Companies
Several other ASX-listed companies are focusing on helium exploration and production. Blue Star Helium (ASX:BNL) has completed Stage 1 of its Galactica development campaign, with six wells tied into the Pinyon Canyon facility. First helium sales are expected soon, with negotiations underway for long-term contracts.
Noble Helium (ASX:NHE) is focused on its North Rukwa project in Tanzania, where laboratory testing has confirmed high helium concentrations. The company is planning to drill exploration and appraisal wells to demonstrate helium in gas phase and target commercialization.
Gold Hydrogen (ASX:GHY) operates the Ramsay project in South Australia, where exploration has proven the presence of both hydrogen and helium. Results from drilling and testing will inform future pilot projects.
D3 Energy (ASX:D3E) holds permit areas in South Africa, where production testing has yielded significant helium and methane resources. The company has defined 2P reserves and identified prospects in underexplored regions.
Conclusion
The Iranian conflict has highlighted the vulnerability of helium supply, prompting companies to seek alternative sources. HyTerra and other ASX-listed companies are actively exploring and producing helium, ensuring supply security amid global disruptions. As the demand for helium continues to grow, these efforts are crucial in maintaining stable supply chains for critical industries.
