Nov 24, 20223 min
Taiwan has been significantly affected by the Russia-Ukraine war, especially when analysing the semiconductor industry. There are multiple noble gases which are either directly imported through Russia or then are routed through Ukraine. The war has caused a slowdown on their imports and helium is one of the major components of this trade.
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Helium is the other crucial noble gas for the semiconductor industry, thanks to its high thermal conductivity, which makes it an ideal coolant for heat transfer. Global helium supplies have been disrupted by events unrelated to the war in Ukraine. Chief among these was a series of accidents at the Amur gas processing plant in Russia, close to the border with China. Before the Russian invasion, a third of the world’s helium came through Amur and the world’s largest helium hub at Vladivostok, which was launched by Russian majority-state-owned giant Gazprom in September 2021.
“To understand the impact, you need to understand what the market was before the war and what happened at Amur,” says Jeff Aldrich, co-chair of the Helium Committee for the American Association of Petroleum Geologists. “There are two helium plants there, and back in October 2021, they had tried to start up the second, and it caught fire. They shut down the plant, put out the fire, and repaired the damage, but January [2022] when they restarted the plant, it blew up, damaging the first plant as well.”
The heavy economic sanctions that the U.S. and its allies have imposed on Russia have scuppered any chance to get the plant back online any time soon, says Aldrich. Both plants were being constructed under technical advice from French contractors, and all contracting work ceased after the Ukraine invasion. “As long as Russia maintains its political isolation and sanctions remain in place, it is highly doubtful that they will have the technology to rebuild Amur,” he says.
Karolytė echoes this view. “I seriously doubt that by the time their capacity is developed, the global demand won’t be met by other suppliers,” she says.
Another expert, Stefano Marani, CEO of Renergen, a South Africa-based helium and LNG producer, Marani and Aldrich both cite the suspension of operations at the U.S. National Helium Reserve in Texas as another blow. The reserve, administered by the U.S. Bureau of Land Management (BLM), has remained offline since late 2021 after the discovery of a leak.
“It’s unlikely Amur will operate before early 2026, possibly much later,” says Marani. He notes that the BLM, which represents around 15% of world supply, had a further setback when its operation in Kansas was put out of commission by a fire.
In addition, having emerged as one of the world’s biggest helium producers in recent years, Qatar has also suffered “unscheduled technical outages,” which Marani says have added significant strain to the global supply system.
Returning for a moment to Europe, there is also the issue of diverting potential helium supplies to alleviate energy shortages.
In October, following resolution of tensions over Spain’s support for moves toward autonomy in Western Sahara, Algeria’s state-owned hydrocarbon group Sonatrach reached agreement with Spanish energy provider Naturgy to resume natural gas supplies to meet Spain’s – and by extension Europe’s – increasingly urgent energy needs. But to do this, Algeria has ramped down LNG production, which is essential for the separation of helium.
“Natural gas is methane at room temperature,” Marani explains. “If you super-cool it to liquefaction point at -162 degrees Celsius, it becomes LNG. Helium is still gas at -162 degrees and becomes liquid at -269 degrees. So, the most effective way to get the helium is to make LNG. No LNG, no helium.”
Producing LNG is complicated and “very expensive, so you don’t do it if you have a pipeline available to send natural gas,” says Marani.
“Algeria can make LNG and ship it to other countries, or it can send natural gas through a pipeline to Spain. If it does that, it can’t make LNG and therefore can’t separate the helium.”
Besides its own supply issues, Taiwan is also paying attention to whether China is benefiting from exclusive access to Russia’s helium reserves. Most observers, however, are guarded about predicting any significant advantages for Beijing.
“Earlier this year, China ceased most of its defensive cooperation with Russia,” notes Ivan Versytuk, editor of New Voice of Ukrainey. “In response, Russia restricted its noble gas supplies to the Chinese semiconductor sector.”
Versytuk adds that Chinese noble gas demand is likely to peak soon after the expected closure of a major “highly inefficient and corrupt” R&D program for developing new materials. “Chinese labs need too much of those gases just for theoretical R&D purposes. If you cut Chinese demand for noble gases, things will get better.”