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Production starts at single-well helium purification plant in Saskatchewan

North American Helium says seven years of hard work marks the start of production at its first single well helium purification plant in Saskatchewan.
North American Helium says seven years of hard work marks the start of production at its first single well helium purification plant in Saskatchewan. North American Helium / Supplied

Correction: An earlier version of this story said the capital cost through the program was 50 per cent. It should have said 15 per cent. 

Marlon McDougall calls it a milestone day for Saskatchewan’s natural resource industry.

The president of Calgary-based North American Helium (NAH) was in the province Wednesday as production started at the company’s first single-well helium purification plant.

“Today marks the commercialization of almost seven years of hard work, bringing on our first helium production facility,” McDougall told Global News.

“We are now selling helium into the North American market. So that’s a huge milestone for us in just the first small step into a much, much larger opportunity.”

Read more: Rising helium prices renews interest in Saskatchewan industry

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The Saskatchewan government said the project fits into its plan to grow the province.

“In Saskatchewan’s plan for growth, we committed to developing this industry and have implemented strong policies to support new investment just like this,” Resource Minister Bronwyn Eyre said in May.

Doug Steele, the Saskatchewan Party MLA for Cypress Hills, said there is also an incentive program for NAH.

“Through the oil and gas processing investment incentive program there’s royalty credits that they’ll acquire as they get into production that will help them until they get their feet under them,” said Steele.

“They get 15 per cent of capital costs through that program… that is kind of an incentive to say, ‘hey, you know, we’re open for business in Saskatchewan.”

McDougall said helium is only found in roughly a dozen places around the world — one of those being southwestern Saskatchewan.

He said the gas is found roughly two-and-a-half kilometres underground and is drilled similarly to oil and gas — without the carbon footprint.

“The gas is mostly nitrogen with some small amounts of other gas and then one to two per cent of helium,” McDougall explained.

“So the carbon footprint of this operation versus an oil and gas operation — there’s no comparison.”

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Read more: North American Helium gets green light for purification facility in Saskatchewan

Once extracted, the gas is then processed in the single well purification plant for exporting.

“You can think of a helium purification plant as a nitrogen rejection unit because the bulk of all the gas that’s produced is nitrogen,” McDougall said.

“The helium itself really flows right through the process … sort of the last molecule standing at the end of it all.”

It is then transported as liquefied gas in a high-pressure tube trailer.

While McDougall said they will initially sell to the North American market, the potential is there to expand overseas.

“We believe that having a reliable long-term source of helium in North America will always, will always turn a premium,” he said. “So in the future, though, we certainly anticipate that we will potentially sell into world markets depending on how much growth we see.”

McDougall said there are a number of areas where helium is used — from medical technology to microchips.

“Every MRI machine that’s out there uses helium full of magnets, microchip manufacturing for computers, so that that industry continues to grow significantly. And as the chip architecture shrinks, it requires more and more helium to complete the manufacturing process,” he said.

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“Space exploration is another big one that continues to grow. And in research, nuclear fusion, things like that, are all emerging sort of technologies that require a lot of helium.”

NAH has big plans for future helium drilling in the province. The company currently has 15 wells in the region, expects to drill 10 more by March 2021 and to then drill 10 to 15 new wells, on average, each year going forward.

“[This is a] multi-decade runway of exploration, production and commercialization here,” McDougall said.

“We look forward to continuing to invest capital. And with that comes obvious employment opportunities, both on the construction and drilling operations side, but also on the ongoing well and facility operations.”

Rising helium prices renew interest in Saskatchewan industry
Rising helium prices renew interest in Saskatchewan industry

That includes the construction of a full-scale production facility at Battle Creek, which NAH said will be the largest of its kind in Canada when it comes online in 2021.

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Steele said that is good news for the region and the province. “We’re going through a little different time as such right now,” he said.

“To see anything this proactive… it’s great for anyone’s economy and I’m just happy that they picked Saskatchewan and it’s going to work out for us.”