helium calmer seas ahead ? cec tucson june 2015 – jerome beauvisage – air liquide advanced...
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HeliumCalmer seas ahead ?
CEC Tucson June 2015 – Jerome BEAUVISAGE – Air Liquide Advanced TechnologiesDavid Grillot – Air Liquide Advanced Technologies
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 20152
Index
A rare gas with properties highly looked for | 3
6 key applications in high end sectors | 4
A sophisticated process requiring a unique expertise | 5
2014 overview | 7
Evolution in the 2000’s: strong changes at play | 9
Many challenges implied for market players | 12
The helium market offer vs. demand issue | 14
Adjusting for the end of the “BLM buffer” era | 15
In a nutshell… | 16
Air Liquide, a major player ready for the new paradigm | 20
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 20153
A rare gas with properties highly looked for
Helium is classified as a noble gas (such as argon, krypton, xenon and neon).
It is inert, colorless, odorless and non-flammable.
He
Lowest boiling point of all elements (-269°C)
Strong cooling properties
Very low molecular density (only hydrogen is lighter)
Can lift anything in the air
Extremely low solubility
Essential to underwater decompression
High-level thermal conductivity
Perfect carrier gas
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 2015
NB: there are several other sectors for which Helium is a key molecule: leisure (balloons), airbags, welding…
4
Six key applications in high-end sectors
Liquid form
40% volumes Gaseous form
60% volumes
MRI (Magnetic Resonance Imaging)
Magnet cooling (a single MRI scanner requires approximately 700 liters of helium per year)
Systems cooling & fuel pressurizing
Rockets & Satellites
Highly purified glass preform creation & fiber cooling
Fiber Optics
Production cooling
Electronics
Breathing Atmospheres
Faster, easier and safer decompression
Carrier gas & purge gas, zero gas or neutral atmosphere gas
Chromatography & Laboratory Applications
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 20155
A sophisticated process requiring a unique expertise
From extraction…
Limited sources
EXTRACTION
Filtration and pressure-swing adsorption on-site
PURIFICATION
Liquefaction on-site
LIQUEFACTION
In highly insulated cryogenic ISO 37,000-L containers
PRIMARY TRANSPORTATION
… to delivery
Liquid: 65-L to 1,000-L Gas: 3 to 160m3
STORAGE
Dedicated fleet of trailers
SECONDARY TRANSPORTATION
CUSTOMERS
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 20156
2 key factors about the helium market
A limited set of sources…
… but undergoing a deep reorganization
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 2015
2014 overview: a limited set of sources
7
7
Only about 10 sources to meet a constantly growing demand.
Current production
volume: 7,500 ISO
loads
Exxon
Hugoton
BLM
Riley Ridge Azew
Skikda
Odolanov Orenburg
Qatar I&II
Darwin
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 2015
2014 Production
8
2014 overview: production areas vs. consumption areas
60%
U.S.A
25 %
Qatar
3 %Russia
10 %
Algeria
Australia2 %
Helium needs to be transported from production zones to 3 main consumption areas.
The rise of the production in Qatar brings new logistics constraints on the worldwide level.
Americas42 %
22%Europe
6%Africa, Middle East & India
30%
Asia
2014 Demand
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 20159
Evolution in the 2000’s: strong changes at play
USA4,700
Algeria500
Russia / CE400
Evolution of helium production in recent years and projection in the coming years
2000: 5,600 ISO
loads
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 201510
Evolution in the 2000’s: strong changes at play
USA4,700
Russia / CE400
Evolution of helium production in recent years and projection in the coming years
Algeria500
Middle East1,900
Darwin150
USA4,450
Algeria800
Russia / CE200
2000: 5,600 ISO
loads
2014: 7,500 ISO
loads
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 201511
Middle East1,900
Evolution in the 2000’s: strong changes at play
Evolution of helium production in recent years and projection in the coming years
Russia / CE200
USA4,450
Algeria800
Russia6,000 – 7,000
Middle East2,000
Darwin150
USA3,000
2014: 7,500ISO
loads
2030:11,600
ISO loads
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 201512
Many challenges implied for market players
ECONOMIC CHALLENGES- BLM index is becoming erratic and unpredictable. Should it remain the
reference?- Rising and volatile cost- Need for product reliability management – not all sources produce with the
same reliability
TECHNOLOGICAL CHALLENGES- Increasing transportation issues- Growing need for recycling processes
GEOPOLITICAL CHALLENGES
- Risk associated with the new production areas
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 201513
Looking ahead
A market likely to alternate between periods of excess demand and of excess offer
A historic market reference depleting quickly
A need for all stakeholders to better anticipate price evolutions
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 201514
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
0
2000
4000
6000
8000
10000
1200012,000
10,000
8,000
6,000
4,000
2,000
0
The helium market offer vs. demand issue
Evolution of helium production and demand on the 2000 – 2030 period
Production Demand Excess production period
Excessdemand period
Hyp
oth
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s:•
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O p
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y 20
30
(4
6%
of
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su
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)
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 201515
2,003 2,004 2,005 2,006 2,007 2,008 2,009 2,010 2,011 2,012 2,013 2,0140
500
1,000
1,500
2,000
2,5002,500
2,000
1,500
1,000
500
0
Adjusting for the end of the “BLM buffer” era
BLM total capacity BLM Production (from USGS report)
(MM
scf)
Since 2012, the BLM annual capacity is decreasing. Its extinction is anticipated for the early 2020’s.
Reduction in the BLM output will put an end to its capacity to act as the market buffer it has been for half a century.
BLM production adjusted in periods of lower demand (55% vs. capacity in 2003, 63% in 2009)
New challenges:- BLM reserves decrease
- Increasing quality / reliability issues
BLM production vs. capacity 2003 – 2014
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 201516
In a nutshell…
A new paradigm is appearing on the helium market
- The US-dominated phase is ending…- … as is the buffer protection the BLM stocks provided
1
New frontiers open as new production areas develop2
Challenges arise along with these, for which all markets players need to prepare
- Cost-related- Technological- Geopolitical
3
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 201517
Air Liquide, a major player ready for the new paradigm
SOURCING CAPACITIES
- Helium primary sourcing volume multiplied by 3 since 2000 (market share rising from 11% to 19% on the same period)
- Diversified portfolio of helium sources around the globe
KNOWLEDGE & EXPERTISE
- Historical presence on the market = know-how and experience
- Cryogenic expertise including helium liquefaction and purification equipment
WORLDWIDE PRESENCE& SUPPLY CHAIN
- One of the largest fleets of helium trailers in the world
- Operating a significant number of filling centers in Europe, Asia and the Americas
- Among the main players on the offshore market (sites in more than 90% of offshore supply bases)
STRONG INNOVATION CAPABILITIES
- Direct involvement in major international projects like ITER, the International Thermonuclear Experimental Reactor, and the Large Hadron Collider (CERN)
- Heading innovation in helium recycling
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 2015 18
Q & A session
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 2015 19
Back-up slides
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 201520
Air Liquide at a glance
WORLD LEADERIN GASES, TECHNOLOGIES AND SERVICES
FOR INDUSTRY AND HEALTH
Present in
80COUNTRIES
MORE THAN
50,000EMPLOYEES
MORE THAN2 MILLIONcustomers and patients
10 Research & Development centers15 Engineering centers
Around 300 patents per year
2013 Revenue: €15,225 million
2013 Net profit: €1,640 million
World leader in gases, technologies and services for Industry and Health CEC TucsonJune 201521
Strong logistics capabilities
FLEXIBILITYin supply to matchCUSTOMER NEEDS
MORE THAN
500facilities worldwide
Present in
80COUNTRIES
A network of more than
10,000distributors
PACKAGED GASES
- Strategically-sited filling centers to serve customers within a 200km radius- Standardized filling units for product consistency across the world- The easiest to use cylinders and valves on the market, for safer, more ergonomic and efficient use of gas (SMARTOP™, ALTOP™)
BULK SUPPLY
- Our dispatch centers are located in the heart of industrial basins- World-class logistics ensuring improved supply reliability to 4,000+ customer sites- Automatic re-ordering through self-powered wireless telemetry units (monitoring supply level on-site)