Cimarex Energy says assembly of helium-producing gas plant on track in western Wyoming

Assembly of Wyo. helium-producing plant on track

CHEYENNE, Wyo. — Cimarex Energy Co. has started building a plant in western Wyoming that’s expected to substantially increase U.S. helium production.

Helium isn’t just used to inflate birthday balloons and giant cartoon characters in the Macy’s Thanksgiving Day Parade. The lighter-than-air gas also is important for magnetic resonance imaging, manufacturing computer chips and launching rockets.

Groundwork for the Cimarex plant began outside Big Piney last year, and assembly of the plant began on the site in May. Denver-based Cimarex expects production of helium and methane to begin next year.

The plant will produce as much as 400 million cubic feet of helium a year, or around 10 percent of current U.S. private-sector helium production, said Scott Stinson, manager of the project at Riley Ridge.

The recession has sapped global demand for helium, but Stinson remains bullish.

“We think it’s going to continue to go up from here,” he said. “It has a lot of uses.”

Sour natural gas from the Big Piney-LaBarge area contains about half of the known, natural helium reserves in the U.S. The trick is separating the area’s valuable methane and helium from substantial quantities of carbon dioxide and hydrogen sulfide.

Carbon dioxide is a greenhouse gas and hydrogen sulfide a dangerous toxin.

The world’s largest helium production facility, Exxon Mobil Corp.’s Shute Creek Plant not far from the Cimarex site, pumps hydrogen sulfide back underground and sends carbon dioxide by pipeline to central Wyoming, where it’s used to repressurize old oil fields.

The Exxon plant also vents carbon dioxide into the atmosphere — about 3.6 million tons a year, according to the Wyoming Department of Environmental Quality.

The Cimarex plant will have lower emissions by pumping hydrogen sulfide and carbon dioxide back underground on site, Stinson said.

“We are processing the same gas that Exxon at Shute Creek is processing, but we are doing it in a radically different fashion,” Stinson said. “We’re doing this with virtually, for all intents and purposes, zero emissions.”

Waste gases from the plant’s five gas wells won’t be depressurized, he said, but reinjected underground at the same pressure at which it came out of the ground, saving energy and costs.

The plant’s helium will be refined for market at a separate, nearby plant being built by Air Products and Matheson Tri-Gas. Methane from the plant also will be sold.

Wyoming’s helium supply is expected to become even more significant after the federal government finishes selling off its strategic helium reserve in west Texas over the next several years. The reserve at Bush Dome currently supplies about half of the U.S. market and one-third of the global helium market.

The government began stockpiling helium in the reserve during the days of military airships in the 1920s and 1930s. The reserve remained important during the Cold War, when it provided helium for missiles and NASA rockets.

Congress approved selling off the reserve in 1996 and sales to the private sector began in 2003. The U.S. Bureau of Land Management, which manages the reserve, initially expected to sell off the reserve completely by 2015.

“We will not be doing that because demand has dropped. You can’t make people purchase a product if they don’t want it or need it,” said Leslie Theiss, manager of the BLM’s Amarillo Field Office, which oversees the reserve.

The latest projection for selling off the reserve is 2020. Cimarex is looking ahead to that date and beyond.

“That’s not a long-term supply,” Stinson said. “When it runs out, it runs out.”

The Cimarex plant, he said, will have a life span of 40 to 50 years.