What’s the deal with helium?

Posted on: March 7, 2012

For the past several months, ILMO and gas distributors across the globe have been preparing for a helium shortage that could last two to three years. At this time, we are forced to allocate helium supplies to our customers, and are doing so in the most responsible and fair manner possible. Below we have provided details explaining this event on a global and ILMO-specific scale, and we will continue to keep you informed of this situation as it evolves.

Global State of Helium

  • Worldwide demand for helium continues to increase
  • Demand continues to grow the fastest in Asia and Korea
  • Expectations are for a tight worldwide supply over the next 2-3 years
  • Refineries around the world are not producing to their Name Plate Capacity
  • The U.S. Bureau of Land Management (BLM), a major source of helium in North America estimated to supply 33-35% of the world’s helium, has a planned outage of a facility in June, 2012, and forecasts a sell-out in the 2015 time period
    • With costs increasing over 40% since 2011, it is expected that prices will continue to increase significantly in 2012, resulting in price increases throughout the entire BLM supply chain, from suppliers to distributors to end users
    • A major source of natural gas, the Hugoton Field in Kansas, continues to decline in pressure
    • Exxon-Mobile refineries are also a major source of helium, and their helium production is below capacity and limited. Along with BLM, an interruption in supply is anticipated due to pipeline maintenance
    • The state of helium supply is unknown beyond 2015
      • Major companies from around the world are looking for new helium resources
      • U.S. refiners will closely manage their helium portfolios going forward, with allocation already in place for most, and costs predicted to escalate

Besides balloons and blimps, what is helium used for?

  • Helium is uniquely suited for cooling MRI machines in hospitals. It’s also used as a welding gas, in the development of nuclear particle accelerators, as a component in breathing gas mixtures for deep divers, and to pressurize and purge rocket fuel tanks.

ILMO’s Allocation Plan

  • Gas applications that are believed critical, such as helium needed for medical or laboratory requirements are exempt from allocation at this time. We are committed to manage this situation with priority to support applications that have a medical and social benefit to their communities.
  • ILMO is honoring all existing helium contracts, though pricing will be affected with increases depending on contractual terms and conditions, effective March 19, 2012.
  • For non-contract customers, applications that may have less urgency such as balloon filling or some industrial uses may be subject to severe or total allocation.
    • We are investigating alternatives to helium for balloon-filling purposes to offer to this industry, and will share opportunities as they are available.
    • ILMO is attempting to procure helium from alternative sources to minimize all supply disruptions, and when possible will make it available to our customers.
    • We will provide an update when the helium situation changes or improves, so please visit http://www.ilmoproducts.com for continual information.

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