Helium plant planned for Sask.

The plant will be located in the Calgary-based company's Battle Creek field near Consul. | Screencap via nahelium.com

North American Helium has raised $39 million to build a helium purification plant in southwestern Saskatchewan.

The plant will be located in the Calgary-based company’s Battle Creek field near Consul.

The Battle Creek is a Milk River tributary that flows from Alberta into Saskatchewan through Cypress Hills Interprovincial Park and near Fort Walsh.

Cypress Hills MLA Doug Steele said the construction “signals the world-class investment climate Saskatchewan offers” as well as jobs and economic growth for the region.

According to the company, it has closed a “non-brokered common share equity financing” through Off Road Capital Partners in New York worth $39 million and had earlier secured $24 million from insiders. In addition to building the plant, the money will fund drilling programs.

Chief executive officer Nicholas Snyder said this is the second commercial helium field the company has found to develop. The first is a single-well processing unit at its Cypress field also in Saskatchewan.

“This new facility at Battle Creek represents a step change for NAH as we transition towards self-sustaining growth for both our organization and the helium industry in western Canada,” Snyder said in a news release.

NAH has drilled 15 wells in Saskatchewan and plans to drill up to 10 more later this year.

Construction near Consul should begin in October with the plant operating by July 2021.

“This facility will have a throughput capacity of 160 mcf/d (thousand cubic feet per day) of purified helium (20 million cubic feet/day raw gas), making it the largest helium purification system in Canada,” said chief operating officer Marlon McDougall. “Cash flow from this project will allow us to continue organically converting our significant land base of over 3.7 million acres in to a development inventory of growth projects, generating significant potential cash flow streams in the future.”

Helium is an inert gas used in high-tech applications such as liquid fuel for rockets and satellites, and in semiconductor manufacturing, MRI machines and some welding. Helium balloons are a well-known but minor use for the gas.

Canada has the fifth-largest reserves in the world and Saskatchewan has a significant amount.

The province said a global shortage of helium has pushed demand and prices higher. Prices have gone up more than 160 percent since 2017.

In addition to NAH’s drilling, the Saskatchewan Geological Survey is analyzing about 88,000 oil and gas wells in the southern half of the province to find out how many have helium of one percent or more. That is an indicator of viability.

NAH is eligible for investment incentives including a 15-percent transferrable royalty credit based on capital expenditures. The provinces’ royalty rate for helium is 4.25 percent.

The project was approved through the environmental assessment process but did not require an Environmental Impact Assessment. NAH says it uses environmentally conscious materials when drilling and most of the site cleared for drilling is returned to active farmland within a year of completing the well.

The province’s environmental protection division determined that an EIA was not required as it is not a development that fits the criteria.

The project is not expected to have an effect on any unique, rare or endangered feature of the environment, according to the determination.

The footprint will be about 35 acres and 93 percent of that is cultivated land.

Where the development crosses native grass, tame pasture, wetlands or riparian habitat the company is required to directionally drill.

No impacts to fish or fish habitat are expected but the company must obtain an Aquatic Habitat Protection permit before working near the creek.

Rare plant surveys found no federally or provincially listed species in the project area. Wildlife surveys found Baird’s sparrow, which is listed as a species of special concern under the federal Species at Risk Act, and barn swallow, chestnut-collared longspur, common nighthawk and lark bunting, which are all listed as threatened.

The company is to follow restrictions under the Saskatchewan guidelines for sensitive species to minimize any potential impact.

NAH estimates annual emissions of 34,000 tonnes of carbon dioxide equivalents and will be subject to emissions reporting and output-based performance standards based on the province’s 25,000-tonne threshold.

Contact karen.briere@producer.com

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