Global helium supplies face significant disruption due to a combination of geopolitical tensions and infrastructure challenges, heightening concerns over the security of this critical resource. Production cuts in key regions, ongoing regional conflicts, and export restrictions have strained the market, prompting interest in alternative sources such as Canada’s reserves.
One of the central issues affecting supply is the ongoing instability surrounding the Strait of Hormuz, a narrow but vital shipping route connecting the Persian Gulf to open waters. Since the outbreak of hostilities in the region, maritime traffic through the strait has been severely limited, with major helium producers like Qatar unlikely to resume full operations until conditions there stabilize. Industry observers note that confidence in the strait’s safety remains low, delaying any potential restart of exports.
Additional supply constraints have emerged from the Eastern European conflict, as Ukrainian strikes have targeted Russian energy infrastructure, and Russia has imposed export controls on helium to prioritize its military demands. These disruptions have further tightened global availability, underscoring the importance of secure and stable helium sources.
Canada holds approximately one-fifth of the world’s helium reserves but currently accounts for only about 2 percent of global production. Its helium resources are concentrated in the southern Prairie provinces, notably in southwest Saskatchewan where companies like North American Helium aim to develop new extraction and processing facilities. Unlike in Qatar, Canadian helium is found in nitrogen-rich pockets deep underground, distinct from natural gas deposits, and extracted using conventional oil and gas drilling techniques.
However, a significant bottleneck for Canada’s helium industry is the absence of domestic liquefaction capacity, a crucial step necessary for long-distance transportation. Helium must be cooled to minus 269 degrees Celsius to become a liquid suitable for shipment. At present, Canadian producers transport raw helium by truck to processing facilities in the United States. North American Helium plans to build the country’s first liquefaction plant in Saskatchewan to address this gap.
Industry representatives emphasize helium’s growing strategic importance amid mounting geopolitical pressures affecting supply chains. Richard Dunn, executive director of the Helium Developers Association of Canada, says the sector stands on the brink of substantial growth if supportive policies and infrastructure are put in place.
Despite helium’s status as one of 34 minerals designated by the Canadian government as critical due to supply vulnerabilities and domestic potential, it lacks certain tax incentives afforded to other minerals. This discrepancy in the Income Tax Act limits the industry’s ability to attract investment, especially through mechanisms like flow-through shares and the Critical Mineral Exploration Tax Credit.
Helium advocates have called on the federal government to amend the tax code to align helium with other critical minerals, arguing this would enable capital inflows necessary to fund production expansion and build the liquefaction facility. Feedback from government officials has been cautiously optimistic. In a June letter, Natural Resources Minister Tim Hodgson acknowledged the potential benefits of these measures for securing a stable helium supply in Canada, signaling openness to further engagement ahead of the next federal budget.
Beyond financial incentives, experts highlight Ottawa’s potential role in firming up demand through long-term offtake agreements or financial instruments like contracts for difference, which could mitigate price volatility risks for producers. Developing specialized cryogenic shipping containers and expanding rail and port infrastructure are also identified as essential components for supporting a fully integrated Canadian helium supply chain.
Meanwhile, some helium producers are exploring opportunities outside Canada to advance their projects. Avanti Energy, for example, is focusing on development in Montana, where the regulatory and business environment is perceived as more conducive to speedy investment deployment. Land holdings in Alberta remain on hold as the company awaits favorable conditions to reengage.
As global helium markets face sustained uncertainty, Canada’s untapped potential has gained renewed attention. Stakeholders see a significant chance to strengthen domestic production capacity and contribute to global supply security, provided that legislative and infrastructural challenges can be overcome.