Global Helium SupplySustainable Helium Business Solutions

Walter L. NelsonAir Products and Chemicals, Inc.

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Today’s objectives Where does helium come from? Why is helium important and where is it used? What does the helium market look like? Where do we get our helium today? Will we run out of helium in the future? How does helium get to market? What is causing the current helium shortage? How does US Legislation impact global supply? How to conserve helium? What is helium recycle?

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Where does Helium come from? By-product of natural gas production Formed by the radioactive decay of heavy elements

in the earth’s crust (Uranium and Thorium)

Only found in certain natural gas fields Where gases formed together and capped by impermeable rock

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Why is Helium important?

Electronics

Fiber OpticsCutting and

Welding

Lifting

Medical Imaging (MRI)

Pressurizing and Purging

Diving

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What is the market demand?

Source: 2012 CryoGas International Source: 2012 Gasworld

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Hugoton &BLM System

Other

Riley Ridge

SkikdaArzew

PolandOrenburg

Qatar

China

Australia

10 MCM0.4 BCF

130 MCM4.9 BCF

16 MCM0.6 BCF

4 MCM0.15 BCF

<1 MCM0.01 BCF

3 MCM0.1 BCF

4 MCM0.15 BCF

Global Helium supply estimate ~ 168 MCM or 6.3 BCF

Where do we get Helium today?

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Estimated worldwide helium reserves

In place demonstrated (measured + indicated) which are currently economic, marginally economic and some that are currently sub economic

Helium in the future?

50 to 70 years supply @ 3-5% CAGR growth rates 200 years supply at current demand rate

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New Helium supply starting 2013Riley Ridge

Skikda

Qatar II

5 MCM0.2 BCF

10 MCM0.4 BCF

34 MCM1.3 BCF

Potential 28% increase in global Helium supply ~ 49 MCM or 1.8 BCF

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How does Helium get to market?

LHe 11,000 gal

BHe 180,000 cf

WorldwideDepots

TRANSFILL AND PACKAGING

Bulk LiquidTrailers

(Containers)

Tube Trailers,Banks,

Modules

Tube Trailers

Dewars

Cylinders Helium,

Specialty Gases

SALES & DISTRIBUTION

LHe 11,000/15,000 gal

LHe 11,000 gal Iso Containers

PRODUCTION, STORAGE, LOADING AND SHIPPING

CUST

OM

ERS

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What’s causing the shortage? Increased demand

- Demand is currently constrained by supply (Sold-out!) Decline in helium extraction from natural gas

- Production shift towards shale gas and oil- Natural production decline in existing gas fields - Fragile economy: lower LNG and CNG demand

Disruptions in helium supply- Planned and unplanned plant outages- Production allocations on the BLM pipeline

Delayed on-stream for new helium plants Global supply will remain tight through 2013

- Until new helium sources begin production & ramp- Until natural gas demand recovers

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US legislation impact on supply? Helium Privatization Act expires on 31 Dec 2014

- BLM provides ~30% of global helium supply

Modeling predicts 10-12 BCF of recoverable helium will remain in the reservoir after 2014

• Successor US Legislation is required- Extend BLM operations through 2020 & beyond- Minimize market disruption while new sources are

developed to replace USBLM as it declines

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How to conserve Helium? Minimize system losses

- Helium supply system audits- Eliminate system leaks – frequent inspections- Turn off supply when not in use

Reduce consumption- Improve thermal performance for cryogenic systems- Operator education – use only what is necessary- Recovery and recycle

Use of alternatives- Different mixtures for welding and analytical applications- Balloons filled with air – suspended or attached to sticks- Substitute other decorations or banners

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What is Helium recycle? Molecule capture at the point of use

- Vacuum or positive pressure collection Recovery and storage

- Accumulation and compression Purification- Membrane, Adsorption or Cryogenic- Analysis & recertification

Recycle- Compression: high pressure gas- Liquefaction: cryogenic liquid

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Conclusions Sustainable helium business

- We must manage this finite resource Investments are necessary

- Natural gas processing with helium recovery Increase recovery and recycle

- Conserve helium at the point of use Legislation is required in the United States

- Extend the BLM operations: ~30% global supply

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Thank you!

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