Qatar, the world’s second largest helium producer, has closed its two helium production plants over the economic boycott imposed by other Arab states.
The helium plants operated by RasGas, a subsidiary of state-owned Qatar Petroleum (QP), were shut after Saudi Arabia closed its border with Qatar, blocking overland exports of gas, a QP official announced.
RasGas’s closure accounts for 2,000 containers loads per year—equivalent of 32% of global demand. It is 70% owned by QP and 30% owned by US giant Exxon Mobil.
Qatar is second to the US in terms of production, supplying a $4.7bn industry. Other helium producing countries include Algeria, Russian, Canada and China.
Among its uses, helium is used to cool superconducting magnets in MRI scanners, as a lifting gas in airships, as a gas to breathe in deep-sea diving and to keep satellite instruments cool.
Phil Kornbluth, head of US-based industry consultancy Kornbluth Helium Consulting, said he expects the impact on the global helium market to be delayed, as consumers use up existing stocks and work out alternative supply options but if the diplomatic dispute lasts a month or more, there will be a global shortage and prices will double.
“Helium is the single commodity that is affected most by this blockade because it’s probably the only thing where Qatar is a major world producer and the supply has been completely cut off,” he said.
US reserves, meanwhile, are dwindling due to the lack of helium production from its oil and gas fields and the country had already started importing helium from Qatar, according to the US Geological Survey.
Iwatani, which holds half of Japan’s helium market share, said it no longer is receiving shipments from Qatar and only has about a month’s supply in stock, according to Nikkei Asian Review.
Iwatani said it was considering importing gas on ships direct from a Qatari port or the US, according to Reuters.
Helium extracted in Qatar is usually transported on land in a liquid form through Saudi Arabia to reach a port in the United Arab Emirates, where the gas is shipped to Japan, but both those countries cut ties from Qatar, blocking Iwatani from using the route.
Air Water, a major Japanese helium provider, said the problem could affect the industry as a whole.
“There is a possibility that supplies from Qatar will stop indefinitely,” it said.
Kornbluth said major helium suppliers were now putting plans in place to reposition empty containers for filling in the US in order to minimise disruptions. But given the time it takes to redirect empty containers to the US, the industry would take a hit.
“It seems inevitable that world helium markets will experience at least a temporary shortage of supply, with formal supply allocations likely if the blockade is not lifted very quickly.”