DAR ES SALAAM – An Australian firm has announced plans to begin exploiting Tanzania’s ‘world-class’ helium reserves, six years after its geologist founders, on a safari tour of the East African country, suspected there could be a huge presence of the mineral on the Indian Ocean’s cost.
Helium One says its shareholders looked at research carried out by a British geologist in the 1950s and discovered “unusually high concentration of helium gas seeps”, which gave them an indication that Tanzania could be endowed with large primary deposits of the mineral.
Helium supply had for many years outweighed demand.
But now, global supply is under threat.
This could be why Helium One is seeing opportunities to exploit the resource that it says could be as much as 98,9 billion cubic feet.
Analysts say this will be enough to make Tanzania one of the world’s largest producers.
“This will be the largest primary helium project in the world,” says Josh Bluett, Helium One’s technical director.
“The next stage is to conduct the drilling programme and the expectation is to make one or more helium discoveries in these reservoirs,” he says.
“All going to plan we will be in that phase next year and hopefully moving to production by 2021,” Bluett notes.
Authorities in Tanzania say Helium One is moving towards production after the pre-exploration phase was aided by extensive seismic data collected as a result of drilling by US oil company Amoco, who came through the Rukwa basin in the 1980s looking for oil or gas.
The report says Helium One is now “drill ready” after raising US$2 million from Australian, Asian and African investors last year, and procuring three licenses from the Government of Tanzania.
Helium is a crucial component in a number of instruments including MRI scanners, telescopes and radiation monitors as well as spacecraft.
The supply has been dwindling slowly over the years with around 75 percent of helium produced from the US and Qatar.
This set-up is currently taking a serious hit following the decline of two US oil and gas fields which produce helium as a by-product, and the blockade of Qatar by Saudi Arabia which continues to choke their supply.
With the price of helium ballooning, buyers are nervous that the fragility of the supply chain may lead to further price volatility and eventuality put the ability to source helium into question all together.
“If any of these plants shut down for maintenance or anything happens, then that will really wipe out a significant amount of supply,” explains Bluett.
“We see ourselves as playing an important part in rectifying the fragile and not very diverse supply chain. The message from all our buyers is – when are you going to be in production, we want to buy your helium,” he says.