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Royal Helium Ltd. has launched its Steveville helium purification facility, located in southeast Alberta near the town of Brooks.
The Steveville plant is engineered to process 15 million cubic feet per day of raw gas fed by two of Royal’s wholly-owned helium wells at Steveville with an output capacity of approximately 22 million cubic feet of 99.999 percent helium per year, the company said in a news release Thursday.
The production capacity of this facility fully delivers on the three-year purchase commitments from Royal’s two offtake partner agreements in the major North American aerospace and space launch industries at an average price of $538 per thousand cubic feet of helium, the company said, adding that the facility has an “ultra-low operating cost due to it being self-powered by fuel gas co-produced from the two helium wells”.
Royal said the limited ancillary methane gas produced by the facility is recycled back into the facility to power its own operations, with excess power to be distributed into the electrical grid, providing additional economics to the company.
The Steveville plant will also materially benefit from carbon credits, generated under the Technology Innovation and Emissions Reduction System in Alberta.
As these carbon credits are monetized it will have the ability to provide Royal shareholders with a material additional cash flow stream, the company said.
“This is a pivotal moment for Royal Helium and all its stakeholders”, Royal President and CEO Andrew Davidson said. “Only a few short years after we first began drilling our helium wells and 12 months of design, fabrication, and construction of the Steveville plant, we are now pleased to announce start-up following the successful completion of the assembly and commissioning phases. Following a successful start-up, Royal will begin ramping up towards full commercial production, making Royal the first publicly listed helium producer operating in Canada”.
Helium Asset Acquisition
In June, Royal’s wholly-owned subsidiary Imperial Helium Corp. agreed to acquire a significant new project located in the vicinity of the company’s Steveville asset in southern Alberta from an undisclosed arm’s-length private company. The asset includes the entire right, title, estate and interest to drill, explore, and produce as well as all surface rights and records not in the public domain.
The total purchase price for the asset was $293,000 (CAD 400,000), consisting of a combination of cash consideration and a number of common shares in the capital of the company representing the equivalent of $117,999 (CAD 160,000), according to an earlier news release.
Royal’s geological and engineering team has determined that the newly acquired land in Alberta holds significant potential for high flow rate helium-enriched gas in the Cambrian and Devonian horizons in at least two structures identified in the acquired and reprocessed 2D seismic.
“This new project area presented something unique to other areas that we have reviewed, with the presence of existing historic test data demonstrating high flow rate inert gas and confirmed, significant helium concentrations”, Royal COO Shayne Neigum said. “Upon completion of the seismic program, which began in the fourth quarter of 2022, it became clear that this will become one of our highest priority areas, as all of the geological features required of a successful helium production reservoir have been confirmed”.
Royal is an exploration, production, and infrastructure company with a primary focus on the development and production of helium and associated gases. The company controls over 1,000,000 acres of prospective helium permits and leases across southern Saskatchewan and southeastern Alberta.
To contact the author, email rocky.teodoro@rigzone.com
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