To further de-risk its maiden helium development, Blue Star Helium Ltd (ASX:BNL, OTC:BSNLF) has contracted experienced US mid-stream provider IACX Energy LLC to deliver and operate an initial helium recovery plant at the high-grade Voyager discovery in Las Animas County of Colorado.
The helium recovery plant will have a throughput of 2 million cubic feet per day to produce about 98% pure helium product gas, with first output expected in the fourth quarter.
IACX will supply and operate the helium plant in exchange for a monthly fee, which means Blue Star will not incur any capital costs to fabricate a plant.
Blue Star's projections for the plant.
Good progress
“Our selection of a third-party operated plant option for the high-grade Voyager discovery has now been cemented with the execution of this agreement with IACX,” Blue Star managing director and CEO Trent Spry said.
“We are pleased to have partnered with such a well-credentialled and proven mid-stream helium operator.
“As well as delivering significant de-risking benefits in terms of upfront capital, time and operating profile, adopting this pathway has also eliminated any requirement for Blue Star to commit to price concession offtake agreements.
“The result is that we can target the premium pricing available in short-term US contract markets and spot sales, with current pricing estimates understood to be running at US$450-$3,000/Mcf for 98 to 99.999% purity helium.
“The plant to be supplied at Voyager can be readily expanded via the addition of a modular membrane unit or addition of a second PSA plant to increase helium output in the future, as well as to accommodate additional high-He-concentration raw gas from surrounding discoveries.
“We are excited to be advancing along the development pathway toward targeted first production from Voyager during Q4 CY2023.
“In parallel, we continue to advance development planning for the Galactica/Pegasus discoveries and mature our extensive exploration portfolio utilising our proven exploration techniques.”
Well drilling soon
Blue Star is seeking permits for a further four wells for drilling at Voyager, on top of the two already permitted.
Drilling at the first two wells is expected to begin in August, with pressure and flow testing to follow soon after.
Long-term partnership
IACX currently operates fourteen discrete helium recovery plants in seven states in the US and one Canadian province.
One of the existing helium facilities is located in Las Animas County, Colorado, neighbouring Blue Star’s Galactica/Pegasus prospect.
IACX senior vice president (Commercial) Jeremy Jordan said: “We are very pleased to be working with Blue Star given the technical and commercial capabilities and professional approach that they have demonstrated.
“Our industry-leading, proprietary, PSA-based helium recovery units can economically extract and purify helium from natural gas to high purity with minimal helium losses, and we look forward to delivering and commissioning Blue Star’s first facility later this year.
“We anticipate having a strong long-term partnership with Blue Star as they continue to develop their portfolio.”
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