Tanzanian Helium Discovery May Be Double Initial Estimate

Helium resources discovered in Tanzania last year may be almost twice as large as first thought, helping address possible future shortages of the gas used in medical scanners and nuclear energy when production begins, possibly as early as 2020, the exploration company said. Researchers working with Lisbon-based Helium One Ltd. calculated the Rukwa gas field in southwestern Tanzania could contain as much as 98.9 billion cubic feet of the resource, Chief Executive Officer Thomas Abraham-James said in an interview. In June 2016, researchers from the universities of Oxford and Durham in England said the “probable resources” of the “game-changer” discovery were 54 billion cubic feet, seven times the world’s total annual consumption of the inert gas. “Once we complete the exploration, define the gas and the asset has matured, we will be confident about the nature of the gas facility,” Abraham-James said by phone. The company intends to convert the sources to reserves next year and then “can determine the likely size of the production scenario,” he said. The inert gas is critical to technology such as MRI scanners, missile-guidance systems and industrial-leak detection systems, and known reserves are quickly running out. Tanzania’s resources are the first instance of helium being found by direct exploration rather than during a search for natural gas, according to Jon Gluyas, professor of geo-energy at Durham University, who was part of the first discovery team. He said the size of the Tanzanian find won’t be confirmed until test wells are drilled, although the world’s limited production sites mean development will impact global supply.

Global Supply

The U.S. is the world’s leading supplier of the gas, although it’s due to shut its Federal Helium Reserve in 2021, putting global distribution “under intense strain,” the U.S. Subcommittee on Energy and Minerals said in June as it pushed for legislation to allow for the extraction of the gas on federal lands. Qatar, Algeria and Russia are the other main producers, but the Middle Eastern country’s recent diplomatic standoff with its neighbors has raised concern over whether it can be a stable supplier, the subcommittee said. Helium One will need more financing to complete exploration and begin drilling, and will seek to refine and export the gas as Tanzanian demand for it is minimal, Abraham-James said. The U.S.’s total helium reserves and resources were estimated at 744 billion cubic feet, including 153 billion measured reserves, in December 2006, according to a U.S. Geological Survey in January. It put the rest of the world’s helium resources at about 1.13 trillion cubic feet. The Tanzania discovery “has a long way to go before its potential can be assessed,” said Maura D. Garvey, director of market research at Intelligas Consulting in Dedham, Massachusetts. “There are many questions as to whether the helium will be economically recoverable.” Wit a current “slight oversupply” of the gas in the market at the moment, “the potential volume and global impact need to be addressed for when the production can come on stream,” she said by email.

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