Can China bridge the current helium shortage? Contributors, challenges, and bottlenecks in the global helium market!

Helium is widely used in medical, electronics, and semiconductor industries. However, the global helium market is currently facing a supply shortage. Against this backdrop, can China—a major consumer and a potential producer—bridge the current helium gap? China plays a unique role in the global helium market. It is the world’s third-largest helium consumer, yet its domestic production capacity remains extremely low. Consequently, China relies heavily on helium imports to meet its demand. Nevertheless, China is actively striving to enhance its indigenous production capacity and explore new supply sources. Luke Manickam, founder of LM Intelligas, and Phil Kornbluth, founder and president of Kornbluth Helium Consulting, discussed China’s role and potential in the global helium market. They identified two key advantages for China: first, its massive domestic demand; and second, its collaboration with Russia on the cross-border natural gas pipeline project—the Power of Siberia—which taps into natural gas fields containing high-concentration native helium. Manickam noted that China currently consumes approximately 120 million cubic meters of helium annually, with roughly 80% sourced from imports. He believes China has the potential to achieve self-sufficiency—if it successfully develops and leverages its domestic resources, backed by strong government support, substantial investment, and advanced technology and equipment. Kornbluth emphasized that China’s greatest opportunity lies in the Power of Siberia project. Scheduled to commence operations by late 2023 or early 2024, the project is expected to supply China with around 60 million cubic meters of native helium annually. Kornbluth stated that this would elevate China to the world’s second-largest native helium supplier—second only to the United States—thereby reshaping the global helium market landscape and significantly enhancing China’s bargaining power and influence. However, both experts also highlighted several challenges and uncertainties. First, whether the Power of Siberia project will be completed and commissioned on schedule remains uncertain. Second, China’s capability to efficiently extract, store, and transport native helium is still a critical question. Third, it remains unknown whether China will choose to export any surplus native helium to other countries. Bottlenecks currently facing the helium industry Although global helium demand continues to rise, supply is constrained by multiple factors. One such factor is the U.S. government’s decision—in September 2022—to cease public sales of the remaining helium stockpiled in the Federal Helium Reserve (FHR). This means the world will lose a stable and reliable supply source, and no other country has yet built comparable reserve infrastructure. Another challenge stems from Russia—the world’s fifth-largest helium producer. In December 2022, a fire and explosion occurred at Russia’s largest natural gas processing plant—the Amur Gas Processing Plant—causing at least a six-month shutdown.

Risk assessment and response analysis of China’s supply-demand landscape for high-end helium

At the levels of loss and reserves: Even top-tier industry storage and transportation equipment suffer a daily natural evaporation loss rate of liquid helium ranging from 1% to 2%. In long-term storage and transit scenarios, this loss rate further increases. Currently, China’s total liquid helium storage and transportation infrastructure capacity can only absorb routine logistics fluctuations—not extreme, prolonged disruptions such as Qatar’s production facility damage or the implementation of Russian export controls. Moreover, liquid helium reserve resources face shortcomings in release efficiency: storage, filling, and transfer require specialized equipment and technical expertise. A single batch of filling—including pretreatment and purging procedures—takes over 10 hours. Under conditions of acute shortage, reserve resources cannot be rapidly redirected to end users, making it difficult to quickly alleviate large-scale supply gaps. II. Procurement space and cost implications following Russia’s export restrictions After Russia’s export control policy took effect, China’s core emergency procurement channel was severed. Globally available surplus helium resources have essentially been exhausted, leaving virtually no room for incremental procurement. Global helium production capacity and trade quotas are highly concentrated among the four major international helium companies. Main supplying countries’ capacities are fully committed under long-term contracts, with no idle spot capacity available for incremental purchases. A breakdown of the supply structure reveals the following: Qatar—the traditional core helium exporter to the Asia-Pacific region—has suffered physical damage to its primary production facilities, with repair timelines estimated at 3–5 years. Short-term resumption of production is impossible; existing long-term contract volumes have become entirely invalid, and spot supply has completely ceased. Moreover, constrained by U.S. technology licensing restrictions, Qatar has no alternative capacity to fill the gap. Secondary suppliers—including Algeria and Australia—have limited export scale; their capacities are long-term locked into markets across Europe, North America, and Southeast Asia, offering no surplus capacity to support incremental Chinese procurement—and spot purchase costs remain prohibitively high. U.S. domestic production prioritizes domestic and allied markets, with no additional export allocations available; furthermore, its strategic helium reserve has been fully depleted, eliminating any emergency buffer capacity. Russia has cut off supplies to Western nations entirely, while maintaining stable, targeted deliveries to China. Currently, the sole remaining scalable, low-cost, and low-risk source of incremental supply is the China–Russia overland gas corridor—leveraging Russia’s expanded production capacity, dedicated allocation quotas for China, and a secure overland transportation system—to continuously fill the global supply gap. Meanwhile, the Virginia Gas Project in South Africa has emerged as a globally scarce new variable for incremental supply. Operated by Tetra4, a subsidiary of ASP Isotopes (ASPI), the project is located in a geopolitically neutral zone—shielding it from risks associated with Middle Eastern conflicts and Western sanctions. Its helium resource endowment far surpasses conventional producing regions: average helium concentration reaches 3%, with localized blocks as high as 12%—8 to 30 times higher than those of Qatar and U.S. sources—conferring inherent, exceptional cost and production advantages. Phase I of the project completed its core drilling ahead of schedule in March 2026. New wells yield gas volumes 16 times greater than earlier oil wells, with full production expected in Q3 2026—delivering 58,000 cubic feet of liquid helium per day. Sixty percent of Phase I output has already been secured under long-term contracts. Phase II entails a 44-month construction timeline; upon completion, daily liquid helium output will reach a globally significant scale. The project has secured $790 million in policy-based financing from the U.S. Development Finance Corporation (DFC) and Standard Bank of South Africa—making it the only large-scale, near-term helium capacity expansion globally feasible within the next three years, and the pivotal new increment capable of breaking the current oligopolistic supply deadlock. However, the project faces challenges including infrastructure delays, complex inland logistics, historical schedule slippage, and single-site concentration risk—meaning it cannot reverse the global tight-balance situation in the short term.

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