Tanzania may start Helium production in 2021

Monday July 11 2016

Helium, a scarce gas, is used in high-tech devices such as MRI medical scanners and radiation monitors. FILE PHOTO | NATION MEDIA GROUP.

Helium, a scarce gas, is used in high-tech devices such as MRI medical scanners and radiation monitors. FILE PHOTO | NATION MEDIA GROUP. 

By KEVIN KELLEY

Commercial production from the vast helium field recently discovered in Tanzania may be five years in the future, the CEO of the Norway-based company spearheading the project has cautioned.

“If all goes according to plan, we could be in production by 2020 or 2021,” Helium One chief Thomas Abraham-James said in a July 8 telephone interview.

Additional testing will be carried out next year as part of a “feasibility analysis” focused on the Lake Rukwa find, Mr Abraham-James added. “With all these projects, we need to drill and confirm that the gas exists beyond any doubt.”

Helium One, a startup firm incorporated last year, must also raise capital before it can begin extracting the gas, the CEO said. The company is reportedly seeking $40 million in investments.

News of the Rukwa find has prompted speculation on the part of some Tanzanians that the country may be on the brink of a helium bonanza.

British and Norwegian researchers' discovery of a reservoir that could contain 54 billion cubic feet of helium could ultimately generate “hundreds of millions of dollars” in revenues, Mr Abraham-James estimated.

Small global market

But the Norway-based CEO warned against viewing the discovery as the potential equivalent, in monetary terms, of Tanzania's enormous natural gas reserves.

“There's a small global market for helium,” Mr Abraham-James noted. “You can never compare it to oil, natural gas or even gold mines.”

Helium is used in a variety of high-tech devices such as magnetic resonance imaging (MRI) scanners that identify medical conditions.

Worldwide supply of the gas is not abundant, with the United States controlling the largest-single helium reserve of 24.2 billion cubic feet. The Tanzania discovery could prove more than twice that size, which would be sufficient to meet global demand for nearly seven years.

But conservation measures by users and increased production of helium by Russia and Qatar, as well as the U.S., have recently eased shortages of the gas.

Helium One is licensed by the Tanzanian government to explore for helium at three sites in the country. The company has looked for the gas in other East Africa countries along the Rift Valley, “but we don't believe they have the right geology” that would result in similar finds of helium, Mr Abraham-James said.

 

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