GGE’s new alliance with Paradox Resources is designed to fast-track and optimise commercial opportunities that exist in the current buoyant helium market.
Grand Gulf Energy has entered into a strategic alliance with helium refiner and seller Paradox Resources to pursue several advanced opportunities to optimise and prioritise near-term exposure to the burgeoning helium market.
Paradox owns the Lisbon Valley Helium plant in Utah, around 20 miles north of the Red Helium project – which is set to be a priority supplier to re-start the Paradox liquefier and is capable of producing high-purity 99.9995% helium, attracting premium pricing of more than US$1,000/mcf.
The alliance comes on the back of the recent execution of a Gas Sales and Processing Agreement (‘GSPA’ or ‘offtake’) with Paradox, which provides Grand Gulf with a path to monetisation with minimal CAPEX / time delay for its maiden pure-play helium well, Jesse#1.
Marketing to semi-conductor manufacturers and space industry
Grand Gulf Energy (ASX:GGE) managing director Dane Lance said this is a huge step for the company as it instantly makes GGE the priority raw gas helium supplier to the all-important high-purity helium market.
“Grand Gulf will also partner with helium plant owner Paradox Resources in marketing to high-tech end users such as semi-conductor manufacturers and the space industry as well as exploring any collective corporate transactions and opportunities,” he said.
“The Strategic Alliance has already identified two potentially revenue-generating CO2 disposal options, both of which will be more fully developed in the short term.”
GGE has engaged a specialist helium consultant with considerable experience in helium processing, sales, and marketing to facilitate and drive the Strategic Alliance.
Helium market outlook
Ongoing supply-side, GGE says issues including the outage at the US government’s BLM Cliffside facility (10% global supply) and the Amur facility incident (10 – 20% global supply) have put extreme pressure on the global market, in particular the US spot market.
Next steps
This alliance is set to progress identified CO2 disposal options with revenue generating potential and investigate:
- The expansion of existing carbon sequestration activities at Paradox’s Lisbon Plant to include CO 2 from the Red Helium Project – potentially revenue-generating under Section 45Q of the US Tax Code; and
- The utilization of Red Helium Project CO2 for enhanced oil recovery (flooding) from Paradox’s Lisbon Oil Field, with potential for a mutually commercially advantageous revenue sharing agreement.
Retail prices have increased more than 200% in the UK, and many suppliers in the US are now in Force Majeure.
This article was developed in collaboration with Grand Gulf Energy, 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