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by John Helmer, Moscow 

The balloon didn’t quite go up at Wednesday’s session of European Union (EU) officials in Brussels to decide on a new round of anti-Russian sanctions, the fourteenth package of the EU’s economic war. Stopping Russian helium exports, one of the items in the package, wasn’t the sticking point.*  

The Russian helium balloon is going up, nonetheless – but not in the direction the EU, US, and other NATO allies imagine.  What is happening instead, Russian industry sources reveal, is that the war conditions have accelerated Russian investment into a rapid expansion of the country’s helium production, ending Russia’s need for helium imports, advancing Russia ahead of the US as the world’s leading producer and exporter, and threatening US helium producers with the destruction of their price and profitability.  

At present, Russian plants produce between 4 and 5 million cubic litres of helium per year; the country needs to consume about 6 million cubic litres, and so it has been importing about 2 million litres a year. The plan for helium production in newly built plants in Amur, Irkutsk, Tatarstan, and Yakutia — sourced from gasfields in Amur and Yakutia with some of the richest helium concentrations in the world — is to generate about 75 million cubic litres annually. That’s  40% of the current world consumption of about 190 million cubic litres. With that much helium, Russia will top the US as the world’s leading producer; take the largest share of the global helium export market; and with exports to China dominate world supply for the foreseeable future.

When Europeans and Americans will want to buy balloons for their parties, fuel their medical scanning and respiration machines, save their naval divers from the bends, and drive their airships, they will have to beg the Russians and Chinese for the helium at the latter’s price. Their warfighting weapon will have been pricked.

Helium was first discovered in 1868 by French and English astronomers watching the sun’s gas emissions. There is a great deal of the gas in outer space, but the discovery of the stuff on our planet took more time to realize;  then the technology to mine and refine it from underground natural gas deposits followed. In 1938 the Soviet physicist Pyotr Kapitsa reported the superfluidity of helium — the applications of this discovery have been multiplying ever since.

Today helium is widely used in high-tech production of cryogenics, superconductors, optical fibers, LCD displays, as well as in medicine, such MRI scanners, laparoscopic surgery, and life support respiration, and in partying for children and adults.  Helium’s best known military application is in underwater naval warfare. The divers who placed the explosives to destroy Russia’s Nord Stream gas pipelines in September 2022 depended on helium in their breathing apparatus.

The world market value of helium was $5.1 billion in 2022, and is estimated in the West to be growing to $7 billion by 2032, an annual growth rate of almost 6%. But Russian industry reports are projecting a growth rate of double this over the next five years.  

Western industry sources say that Russia currently produces bulk liquid helium from three different sources. Gazprom produces helium at its new Amur gas processing plant in Eastern Siberia and its older gas processing plant located in Orenburg; while the Irkutsk Oil Company (INK)  produces helium from its Yaraktinsky Plant located in the Ural Region. Presently, these sources account for approximately 12-13% of global supply

Russian sources report that for the time being Gazprom’s Orenburg plant is the principal source of domestic supply, giving Gazprom near-monopoly control, with 80% of the domestic helium.

INK, which is owned by the billionaire Nikolai Buinov will gain no more than 15% of the market. Buinov, who is not mentioned as INK’s owner in the company’s annual reports, is little known outside his home region of Irkutsk where he and his father began by selling fuel and lubricants to local goldmines.  He is not under US sanctions.  

Source: https://www.britannica.com/

The Russian sources also report that the main helium gas sources are in the geological formations known as the East European and Siberian basins.  Of the natural gas fields explored to date in Russia, 176 sites are considered as a source of helium with a concentration in natural gas of at least 0.05%. State reserves as of last year amounted to 323 million cubic metres for reserve categories A+B; between 8 billion and 9 billion if the less proved categories are included. About a third of these estimated reserves are in Yakutia (Sakha); about 7% in the Orenburg region. The best known producing sites at the moment are the Kovykta and Yaraktinskoye gasfields in Irkutsk region and Chayandinskoye in Sakha.  

(in thousand tonnes)

Source: https://www.tadviser.ru

This pie chart of global production is about to be revolutionized, not only by the expansion of Russian production, but by the downward pressure on helium prices which the new volume of Russian exports will cause, pushing US production of helium – which has already been declining – below the level of profitability. After appeals to the Russian government from hospitals complaining at the 40% spike in the helium prices between 2020 and 2023, it was agreed with Gazprom to stabilize the current price.  When Gazprom’s new Amur helium production enters the market, on top of the INK’s plant in Irkutsk region, there will be a vast surplus of Russian helium and this will be exported, starting with China.

In two years’ time, when Gazprom’s Amur gas processing plant at Svobodny reaches design  capacity,  it will be the largest gas processing plant in the world after the Prudhoe Bay plant in Alaska. It will be the largest helium producer in the world. US industry estimates suggest that when operating at full capacity, Gazprom’s plant will hold about one-quarter of the world market.   


Click on source to enlarge for view: https://www.linkedin.com/

Loading of liquid helium into tanker trucks at the Orenburg plant. For more detail on this plant, click to read.

Gazprom’s new helium shipping hub at Vladivostok, supplied by the new Amur processing plant, launched in 2021.    

Air Products, one of the leading helium suppliers in the US, presents this videoclip on its operations.  

Helium production in the US has been dictated by the state’s military needs, first during World War I and then World War II.  However, in 1996 the Clinton Administration privatized reserves, production plants and distribution. Since then mine source Chevron and producer Air Products and Chemicals have grown rich on the gas while production volumes have declined; they are  already forecast to drop by half to around 40 million litres per annum in five years. At present, Air Products and Chemicals, listed on the New York Stock Exchange, has a market capitalization of $61 billion and is declining from its peak in 2022. Linde, which is also listed on the NYSE, is doing better; its market cap is currently $212 billion.  

The US and EU sanctions war, which intensified in 2022, helped restrict Russia’s helium exports that year because of international payment problems. The new sanction against EU importation of Russian helium, which will take effect later this month, will have negligible impact on Russia, but it will hit European buyers of helium with rising prices. In 2022 Kazakhstan, China, Belarus and Turkey were the main consumers of Russian helium. With the new supply of the gas from Gazprom in Amur, the Chinese import volume will take off.

Source: Source: https://www.tadviser.ru/

The escalation of the helium war by the US and EU will also drive new production, price and trade arrangements between Russia, China, Iran, Qatar and Algeria. One sign of that was the international helium production conference which took place in St. Petersburg in the last week of May. Gazprom is the sponsor.

[*] As this article was being completed for publication, a follow-up session of EU officials on June 20 agreed on the new sanctions package, including the restriction on Russian helium exports.  A final implementing decision is expected on June 24.  

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