Uses of liquid helium - MRI
Liquid helium is produced commercially for use in superconducting magnets such as those used in magnetic resonance imaging (MRI). Image credit: Mart Productions via Pexels

South African natural gas and helium producer Renergen has announced the completion of a forward-sale agreement for an amount of 100,000 units of helium in a 19-year agreement, with each unit representing a thousand standard cubic feet (mcf) of liquid helium to Argonon Helium US Inc (Argonon), a Delaware-incorporated helium-trading company.

Argonon will use the helium to issue tokens, which will in due course be listed on an exchange with the assistance of financial services provider Purple Group Limited’s EasyCrypto platform. The tokens will be fully redeemable for helium at the plant, giving investors the ability to participate in the difference between refinery price and the current spot price.

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According to estimates by Edison group and Hannam and Partners, the global helium market, which is currently undersupplied, consumes around 6,000,000 units per annum with an anticipated consumption of over 126,000,000 units by the time Renergen’s Virginia Gas Project’s license for the gas fields across Welkom, Virginia and Theunissen in South Africa’s Free State Province expires, assuming no growth in demand.

At present, the helium market is constrained due to plant outages, disrupted shipping routes and reduced upstream production of helium, amongst other reasons.

Unlike other more transparent commodities, helium is not presently traded in the spot market and a visible price per mcf is not available. The collaboration between Renergen and Argonon is specifically designed to bring transparency of pricing into the market and highlight the growing global importance of the element.

CEO of Argonon, Richard Charrington said: “Whilst 100,000 units is less than 0.1% of the global market over the term of our contract, we believe this transaction is a ground-breaking step in bringing helium to the financial markets and will pave the way for its inclusion into more mainstream commodities. Like with so many other commodities, it will start small and is likely to be traded by those who have researched it and understand the future potential with emerging technologies such as quantum computing and in time, may become much more mainstream in similar way lithium did several years ago.”

CEO of Purple Group Limited, Charles Savage said: “We see a future where the use of block-chain to manage assets at low cost and in a transparent way becomes mainstream. This is what we do at EasyCrypto and it was a no-brainer when our long-time friends at Renergen asked us to get involved. Applying it to a resource base we believe is a very innovative approach and look forward to this journey.”

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CEO of Renergen, Stefano Marani commented: “Helium is a rare element without substitutes and the importance and critical role it plays across several high-growth sectors including medical imagery (MRIs), welding, fibre optics and electronics is leading to a growing global shortfall of helium supply, and rising prices. Through the development of its world-class, high-grade, Virginia Gas Project, Renergen is in a strong position to supply this growing market and continue to create long-term value for all our stakeholders.”

“Argonon has developed an innovative product which will provide an accessible platform and market for any interested investor to gain direct exposure in the underlying commodity and marks its entry into a tradeable commodity,” said Marani.