North American Helium gets green light for purification facility in Saskatchewan

A North American Helium drilling site is pictured in southwest Saskatchewan in an undated handout photo. North American Helium / The Canadian Press

A Calgary company says a planned helium purification facility in Saskatchewan will be the largest of its kind in Canada.

North American Helium Inc. (NAH) says it has received all regulatory approval from the province to go ahead with the construction of the plant in Battle Creek.

“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 Thursday.

READ MORE: Canadian oilpatch hopes float on Prairie helium drilling prospects

Demand for the gas, which was once used mainly for military, weather and party balloons, has been steadily rising, creating shortages and spiking prices in recent years. The Saskatchewan government says helium prices have increased 160 per cent since 2017.

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Helium’s unique ability to remain a liquid at extremely low temperatures makes it the cooling agent of choice for superconducting magnets in research and medicine, including MRIs. It’s also essential in rocketry and plasma welding.

The global market for helium, meanwhile, is being thrown wide open by the U.S. government’s decision five years ago to gradually sell off its strategic reserves of the inert gas and turn the market it now heavily influences over to the private sector by 2021.

Click to play video: 'Rising helium prices renew interest in Saskatchewan industry' Rising helium prices renew interest in Saskatchewan industry
Rising helium prices renew interest in Saskatchewan industry – Jan 7, 2020

“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.

It’s an industry that is “set to take off” in Saskatchewan, according to the province’s energy and resources minister.

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“The building of this purification facility by North American Helium will enable the province to scale helium production and important export capacity,” Bronwyn Eyre said.

“In Saskatchewan’s plan for growth, we committed to developing this industry and have implemented strong policies to support new investment just like this.”

The government said that includes expanding its provincial sales tax exemption for exploratory and downhole drilling activity and a highly 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.

READ MORE: Rising helium prices renews interest in Saskatchewan industry

The NAH project has been approved through the environmental assessment process, the province said.

In a separate statement, the company said it has raised $39 million to construct the facility and fund a drilling program.

“This new facility at Battle Creek represents a step change for NAH, as we transition towards self-sustaining growth for both our organization and the helium industry in Western Canada,” Snyder said.

NAH said it has drilled 15 wells to date and is looking to drill up to 10 more wells by the end of 2020.

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Construction on the production facility is expected to start later in the year and be in service by July 2021.

— With a file from the Canadian Press

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