Brian Zinchuk is editor and owner of Pipeline Online
Royal Helium has brought its Steveville, Alberta, plant online. Royal Helium
Next step: Sending this helium to the stars
SASKATOON – Saskatoon-based Royal Helium Ltd. announced on Oct. 12 that the company has completed commissioning of its Steveville helium purification facility and has commenced the start-up of the facility located in southeast Alberta near the town of Brooks.
It was a transformative day for Royal, which drilled its first helium exploration well in southwest Saskatchewan in January, 2021. Oct. 12 was the day Royal Helium went from being a helium explorer to a helium producer. And after years of spending money in hopes an eventual return and two years, 10 months since it drilled its first well, that revenue will soon start to flow. It already has offtake agreements in place such that half of its helium production is already spoken for, and it will be used to send rockets into space.
“This is a pivotal moment for Royal Helium and all its stakeholders,” said Andrew Davidson, President & CEO of Royal, in a release. “Only a few short years after we first began drilling our helium wells and 12 months of design, fabrication, and construction of the Steveville plant, we are now pleased to announce start up following the successful completion of the assembly and commissioning phases. Following a successful start-up, Royal will begin ramping up towards full commercial production, making Royal the first publicly listed helium producer operating in Canada.”
Assembly of Royal Helium’s Steveville plant. Royal Helium
The Steveville plant is engineered to process 15,000 mcf/day of raw gas fed by two of the 100 per cent owned helium wells at Steveville with an output capacity of approximately 22,000 mcf of 99.999 per cent helium per year. The purity level, sometimes referred to as “five nines,” is crucial for usage in stringent applications.
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The company said the production capacity of this facility fully delivers on the 3-year purchase commitments from Royal’s two offtake partner agreements in the major North American aerospace and space launch industries at an average price of USD $538 per mcf (thousand cubic feet) helium (CAD $730/mcf). Of economic significance, the facility at Steveville has an ultra-low operating cost due to it being self-powered by fuel gas co-produced from the two helium wells.
Royal’s 100 per cent owned state-of-the-art purification facility was purpose-built to recover 99.999 per cent helium while setting the highest standards for environmental efficiencies and producing an exceptionally low carbon footprint, the company said. Substantially all of the gas purified at the facility is inert and can be captured in purified form at the facility, providing additional potential cash flow streams. Until the biproduct gases are captured and sold, they are vented with virtually zero impact to the environment, given the gas’s completely inert nature. The limited ancillary methane gas produced is recycled back into the facility to power its own operations, with the ability to generate excess power which will be distributed back into the electrical grid, providing additional economics to Royal.
The Steveville plant will materially benefit from carbon credits, generated under the Technology Innovation and Emissions Reduction System (TIER system) in Alberta. As these carbon credits are monetized it will have the ability to provide Royal shareholders with a material additional cash flow stream, the company said.
The company has also done extensive helium exploration drilling in southern Saskatchewan. It drilled its first of several wells east of Climax, Saskatchewan in January, 2021. Since then it has drilled wells north of Ogema and near Val Marie. The acquisition of Imperial Helium allowed Royal to develop those wells first before moving forward with processing facilities at its Saskatchewan plays.
Spokesperson Dean Nawata told Pipeline Online on Oct. 13 the next steps being considered include testing two wells at Ogema, one well at Val Marie, or potentially drilling a new well at Steveville or a fifth well at Climax. The variables in what path to take next include rig availability.
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