Blue Star powers up Voyager as helium supply hits critically low levels
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Blue Star is another step closer towards starting targeted production at its high-grade Voyager helium project in Colorado after securing a key power generator package.
The company has been putting all the pieces together needed to bring Voyager – its maiden development project, just 6 miles from the historical Model Dome field – into production during Q4, 2023. The Model Dome area hosts amongst the top three highest helium concentrations in the world.
Achieving this goal will make Blue Star Helium (ASX:BNL) one of the first ASX-listed primary helium plays to enter production, allowing it to tap into helium prices that have been floating towards the stratosphere due to a critical lack of supply.
The rare gas, used in semiconductor manufacturing, nuclear energy production, solar panels, optic fibre and the cooling of superconducting magnets in MRI scanning machines and more, currently sees US short-term contract and spot pricing of between US$450 and US$3,000 per thousand cubic feet (Mcf) depending on its purity (98% to 99.999%).
This underscores just how valuable the 2C (best estimate) contingent resource of 643 million cubic feet (MMcf) of helium at Voyager is for the company, especially when total field and plant operating costs are estimated at between US$100 and US$120 per Mcf with the plant potential to deliver 38MMcf in the first full capacity year.
That’s a hefty potential margin.
Initial development wells will be selected from six potential locations – two approved and another four awaiting approval from the Colorado Oil and Gas Conversion Commission (COGCC) – and will be tied into the facility operated by experienced US midstream provider IACX Energy.
IACX is providing helium recovery services through delivery and operation of a pressure swing adsorption (PSA) helium recovery plant at the high-grade Voyager project under a Master of Services Agreement that the two companies executed at the end of June.
Voyager will ultimately use a 20-well development inventory to maximise the contingent resource.
Blue Star has now executed a lease agreement to secure the generator package for Voyager with experienced generator provider Red-D-Arc Inc, a part of the giant Air Liquide group.
Importantly, it completes the acquisition phase of the principal plant components (including the feed compressor and helium recovery unit) required for IACX to complete installation of the helium recovery plant.
“Securing this power source is another significant milestone as we move towards scheduled production at Voyager,” managing director Trent Spry said.
“Red-D-Arc has worked with Blue Star to tune the power package to our specific plant and compression requirements and it has been a pleasure working with them.
“Securing the generator via a lease agreement further demonstrates the company’s plan to keep capital costs low for our inaugural helium production project at Voyager.”
This article was developed in collaboration with Blue Star Helium, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.