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Helium supply deflates, gas prices rise quickly

by David Hannon

Supply issues are popping up with helium, but so far have had limited impact on industrial and contract buyers. The shortage is being traced to plants in the Middle East and Africa—one in Qatar and two in Algeria—that had been offline as well as domestic supply problems.

Domestically, the U. S. Bureau of Land Management (BLM) manages a helium storage facility in Texas and a 425-mile pipeline. This summer, the pipeline experienced pressure problems, which made it difficult for private companies hooked into the line to draw helium. BLM provides the U.S. with 42% of its crude helium and says the shortage should be resolved by November.

But some domestic producers are raising prices already. BOC Gases and sister company Linde announced they would increase its helium prices 10-15% effective October 15. BOC said in a statement announcing the increases that "increased helium costs are the result of a growing reliance on purchases of high cost crude helium from the U.S. Bureau of Land Management, government restrictions on the flow of crude helium feedgas through the BLM pipeline and the higher cost of refined helium purchased from third parties. Crude helium from the BLM's stockpile is playing an increasingly important role in the helium supply chain as crude helium production from lower cost private sources declines due to depletion of some of the key natural gas fields that contain helium."

Other industrial gas suppliers have been pushing price increases across the board in the late summer. Praxair announced a 10-15% price increase for several gasses including helium, as well as cylinder rental rates. "Given the fragile nature of the helium supply system, we are not able at this time to supply spot, backup, or unplanned volume," the company said in a statement.

Air Liquide in late August also announced a 10% hike for most of its gasses and a 15% increase in facilities fees.