Blue Star Helium Ltd (ASX:BNL, OTC:BSNLF) has made further progress in its plan to deliver first helium production from the high-grade Voyager discovery in Las Animas County of Colorado by the end of the year with key feed compressor infrastructure secured.
The company is pleased to have secured the feed compressor as it was identified as a key long lead item for the project and a vital component of the flowsheet.
Compressor being refurbished
After engineering consultants inspected the unit it was acquired for a non-material consideration.
This resulted in significant savings for the company on pricing and delivery of a new unit.
The feed compressor is now being refurbished in the company engineers’ yard.
The compressor, as part of Blue Star's gathering system, is shown with a red star.
Blue Star’s strategy is to find and develop new supplies of low-cost, high-grade helium in North America.
“We are excited to be advancing along the development pathway toward targeted first production from Voyager during Q4 CY2023," Blue Star managing director and CEO Trent Spry said.
“In parallel, we continue to advance development planning for the Galactica/Pegasus discoveries and mature our extensive exploration portfolio utilising our proven exploration techniques.”
READ: Blue Star Helium commissions third-party plant to process Voyager gas
To further de-risk its maiden helium development at Voyager, Blue Star has contracted experienced US mid-stream provider IACX Energy LLC to deliver and operate an initial helium recovery plant.
This 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 of 2023.
IACX will supply and operate the plant in exchange for a monthly fee, which means Blue Star will not incur any capital costs to fabricate a plant.
Helium recovery unit progress
Since then, Blue Star’s team has been working closely with IACX around site requirements and ancillary component acquisitions, including the feed compressor.
IACX has confirmed that work on the helium recovery unit is progressing as planned and delivery to the site is on schedule for the December quarter of 2023.
In regard to the appointment of IACX, Spry previously 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.”
Targeting premium pricing
Spry added: “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."
About helium
Helium is a unique industrial gas that exhibits characteristics of a bulk, commodity gas and of a high-value, specialty gas and is considered a 'high tech' strategic element.
Due to its unique chemical and physical qualities, helium is a vital element in the manufacture of MRIs and semiconductors and is critical for fibre optic cable manufacturing, hard disc manufacture and cooling, space exploration, rocketry, lifting and high-level science.
There is no way of artificially manufacturing helium and most of the world’s reserves have been derived as a by-product of the extraction of natural hydrocarbon gas.