Brian Zinchuk is editor and owner of Pipeline Online
Independent Well Servicing worked on Royal Helium’s Climax-3 well this past summer. All the contractors on site are oil and gas contractors. Photo by Brian Zinchuk
REGINA – While development of helium in Saskatchewan is proving to be the birth, or rebirth of an industry, there is one simple fact: it is entirely dependent on the expertise developed in oil and gas, and the oilfield service companies that, for years, have produced it.
Pipeline Online has been present at the drilling of several of Royal Helium’s wells this year. Every single contractor visible onsite was an oil and gas contractor. That included aeromagnetic survey, geologists, lease builders, drilling rigs, rig movers, shack rentals, pipe providers, water haulers, trucking companies, wellsite consultants, service rigs, perforators, drilling communications, wellhead providers, tank rentals, safety personnel, and even the people who provided the septic tanks for the rig shacks and took away the trash. All were oil and gas.
Indeed, a helium site, while being developed, is indistinguishable from a natural gas site. Processing facilities, such as those at Weil Group’s Mankota site, and North American Helium’s plant near Consul, are a bit different, but not by much.
Weil Group opened a helium processing facility near Mankota in 2016. Photo by Brian Zinchuk
North American Helium processing plant near Consul. Video via YouTube/North American Helium
On Nov. 15, Saskatchewan Minister of Energy and Resources Bronwyn Eyre announced a Helium Action Plan, meant to foster further development of the industry. The announcement took place in the Legislature, and had invited representatives from the helium industry.
Asked if this helium development would be possible without oil and gas, Eyre said, “No, and that’s partly why the importance of the building on our strengths, that’s absolutely integral to this. There is huge crossover in the service, on the service sector side. The skills are there, that jobs are there, and that dovetailing into the helium sector is very, very good news for the service sector, and certainly for the resource, as a whole, and extraction of it. But there’s that exploration side, obviously, (and) the production side. And those are skills which we have in the province which we can build on, and absolutely complement our existing current energy sector and that’s why this is such a good news story all round.”
Royal Helium president and CEO Andrew Davidson said, “Everyone that we use has experience in the oil and gas sector. There certainly there are some that that translate into the mineral sector as well, various rock mechanics, PhDs, but generally all oil and gas background, almost exclusively all Saskatchewan based. That’s a big driver for our company. We hire locals before we hire anyone else. But it’s a natural transition for oil and gas. Any movement away from carbon-based economies, rightly or wrongly, leads heavily into helium development in southern Saskatchewan.”
North American Helium processing plant near Consul. Video via YouTube/North American Helium
Royal Helium Well 4 near Climax. Video via YouTube/Brian Zinchuk
Asked if they could do this without oil and gas expertise, and oil and gas services, Wes Siemens, president of Global Helium, said on Nov. 23, “No. Absolutely not.”
He described how oil and gas are created, then trapped underground in geologic formations over the course of hundreds of millions of years.
“We have to use drilling rigs to drill down there, like two kilometres, sometimes shallow or sometimes deeper. But the helium or the oil and gas is trapped in the subsurface. You have to drill for it. And helium really the same, other than oil and gas is created, typically from the carbonaceous material, (whereas) helium is formed by the decay of uranium and thorium. And again, it’s gonna migrate. Helium is lighter than water. So it migrates, through buoyancy. It migrates upwards and gets trapped, and same as oil and gas we’re going to drill for.”
It’s exactly the same skillset and expertise needed as oil and natural gas development.
Greg Robb, CEO of Helium Evolution, said on Nov. 23, “This play is very much like oil and gas exploration. We use all the same tools.”
“Look at the technical teams of North American and Royal and Global; and they’re all oil and gas people as well. I had an investor ask me this one time, ‘Well, you know, do you have any helium people?” and I said, “Well, there aren’t any dedicated helium people. They’re all people with oil and gas experience, that are now applying their skillset to finding helium. And to make even more understandable, this is a gas play. It’s a gas play, it’s just not hydrocarbon play.
“It’s a gas. It’s trapped like oil and gas is trapped. And we’re exploring for it with the same methods. The big difference, of course, is once you get to the surface, the processing is special.”
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This is Part 4 in a series regarding helium development in Saskatchewan.