BOC Using Darwin LNG Vent Stream to Feed Australia’s First Helium Plant

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). BOC (NYSE:BOX)(London, U.K.) is planning to invest $35 million for a helium production plant using waste gas from the new LNG plant now under construction at Wickham Point, Darwin, in Australia’s Northern Territory. Subject to official approvals, construction of the plant should begin in mid-2006 and go on stream in mid-2007. It will be the first of its kind in Australia.

Global growth in helium sales has risen from 4.5% in 1998 to around 8% in 2004/05 and this rise has been driven by increase in demand from Asian countries. It is used in industrial and manufacturing applications, including medical magnetic resonance imaging, laser welding, particle accelerators, leak detection, and the manufacture of semiconductors, LCDs, and fiber optic cable. It has wide applications in aerospace, defense, and energy programs. Helium, as the coldest known substance, is expected to see dramatic growth in usage in the energy and power industry, in motors, magnets, and transmission networks, where its role in low temperature superconductivity is being harnessed on an increasing scale.

BOC Area General Manager in Darwin, David Hatcher, said that the opportunity to extract helium from Darwin LNG’s vent stream will allow Australia to produce the helium it needs for the first time, instead of having to rely on imports from the U.S. Phil Kornbluth, BOC Vice President, for helium and rare gases said, “The investment in Darwin is another in a series of steps BOC has taken recently to strengthen our global supply position and prepare for the eventual decline of U.S. sources.”

The plant will have a capacity of 150 million cubic feet per year when it reaches full production and will supply between 2% and 3% of global demand.

Under a long-term contract with Darwin LNG, BOC will extract the helium from the vent stream of the Darwin LNG plant. The helium will be purified, liquefied, and filled into specialized ISO containers for shipment. One hundred fifty helium containers worth $20 million will be produced annually for domestic use and for export to Asia and New Zealand.

Although helium is said to make up 25% of the universe, it is relatively rare on earth. All natural gas contains a trace of helium, but only a select number of gas fields contain a high enough concentration to permit economic extraction.

ConocoPhillips (NYSE:COP)(Houston, Texas) leads the consortium that owns the Darwin LNG plant, which is scheduled to produce 3.1 million tons of LNG per annum when it begins operating in early 2006.

BOC operates one of the world’s largest helium refining facilities in Otis, Kansas, and also has access to helium produced from other U.S. sources in Wyoming and Utah and from Poland, Russia, and Algeria. The company will also have access to 50% of the helium produce from a new plant in Qatar that is scheduled to start up later this year. BOC transports the liquid helium to a worldwide network of 48 local distribution facilities and has also developed a leading edge helium recycling capability.

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