Helium extraction and production could help buoy the Saskatchewan resource sector as western Canada’s oil and gas industry continues to struggle. Calgary-based North American Helium Inc. has announced plans to get a second field into commercial production, with construction of a purification facility set to begin in Battle Creek, Saskatchewan this summer. The company’s first well, located nearby in Cypress Hills, is slated to come on-line around the same time.
Although the general public may be most familiar with helium for its minor sideline use in balloons, it is more practically required in a range of industries, technologies and medical research, including diagnostic testing, semiconductors, fibre optics, nuclear power facilities, rocket systems and welding. Canada theoretically boasts vast reserves of the inert gas, which is a by-product of the multi-million-year breakdown of uranium and thorium, but, historically, it is difficult to find and has almost always been discovered as an incidental offshoot of oil and gas drilling.
Dwindling world supply and corollary rising prices have now prompted entrepreneurial geological explorers to actively search for reserves like the two North American Helium has identified in southwest Saskatchewan. Alternatively, helium can be separated from natural gas — where it shows up in trace amounts — through cumbersome and more emissions-intensive industrial processing.
“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,” says Nicholas Snyder, chairman and chief executive officer of North American Helium. “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.”
The company holds exploration rights for approximately 3.7 million acres, primarily in Saskatchewan and Utah, and announced last week that it secured $39 million in equity financing to be invested in what will be Canada’s largest helium purification facility, as well as further exploration. In turn, the Saskatchewan government is providing incentives through a provincial sales tax exemption on exploratory and down-hole drilling and an incentive program for investment in new or expanded oil and gas processing.
“Helium production in Saskatchewan is set to take off,” asserts Saskatchewan Energy and Resources Minister Bronwyn Eyre. “The building of this purification facility by North American Helium will enable the province to scale helium production and important export capacity.”
“We are fortunate to be operating in a jurisdiction with a supportive regulatory structure, favourable geology for helium production and a skilled workforce,” Snyder concurs.