Russia aiming to become key exporter of helium thanks to new Siberian plant

The new huge production plant in Russia is expected to reshape the market for helium, a gas that’s essential to many critical industries, says The New York Times. At the moment, the vast majority of the world’s helium is generated by the United States and Qatar, but Russia, which is already self-sufficient, intends to become a major exporter.

Helium, which is usually extracted as a byproduct of natural gas, is a finite resource. It is slowly becoming scarcer, while analysts expect demand to rise over time. The gas plays an increasingly critical role in industries like medical technology, space exploration and national security. The exceptional property of helium is an extremely low boiling point making it the coldest thing on Earth. Besides, it is not flammable and does not interact with other gases. Thus, the gas is essential in devices ranging from MRI machines to rocket engines. Russian balloon sellers are also hoping to benefit from an increase in supplies expected next year, as they expect the gas to become cheaper.

Given its wide use, “people began to get nervous about helium supply”, says Christopher J. Cramer, vice president for research at the University of Minnesota. Medical device makers and scientists have opposed helium’s continued use in party balloons, which amounts to about 10% of the world’s supply. The American Chemical Society calls helium an endangered element and recommends that people “opt not to buy helium balloons.”

Some of the world’s largest known reserves of natural gas with high levels of helium are located in Siberia. Russia’s key natural gas producer Gazprom said in September that its Siberian plant was more than 60% completed. The company plans to export cryogenically cooled liquid helium from the Port of Vladivostok, which is well-positioned to supply China and the technology industry on the US West Coast. Russia expects to ramp production up in the middle of this decade in order to produce 25-30% of all helium used worldwide.

Michael Dall, economist specialising in industrial chemicals at IHS Markit, considers that initially, the new Russian supply may lower prices. However, in the longer term, “the dynamics could become more political, something similar to OPEC”. Other countries also see opportunity in helium, according to Founder of Kornbluth Helium Consulting Phil Kornbluth, with Qatar planning new refineries and companies prospecting for new deposits in the United States, Canada and Africa.