With global helium prices hitting stratospheric levels, exploration companies are racing to snap up assets in Alberta in a bid to turn this province into a significant supplier of the in-demand gas.

“It’s a bit of a land rush right now, to be honest,” said Chris Bakker, CEO of Calgary-based Avanti Energy, which recently leased 7,000 acres in southern Alberta for the purpose of helium exploration and is in negotiations for another 12,000 acres in Montana.

“In the last 12 to 18 months, there’s been quite a few companies that have appeared on the market,” Bakker said.

Geologists have known for a long time that Alberta is sitting on abundant helium reserves. Large-scale deposits of the gas, which is the second most abundant element in the universe but relatively rare on Earth, can be found deep underground in the same regions that have historically been known for oil and gas drilling.

For decades, this lighter-than-air resource has remained relatively untapped, but recent years have seen renewed interest in helium in Western Canada. Beyond the filling of party balloons, the element has a host of uses — from medical applications and MRI machines to fibre optic cables, data centres, semiconductor manufacturing, and cooling and cryogenics.

“The real growth areas are the high-tech areas,” said Bakker, who worked for Encana (now Ovintiv) for 16 years before taking a buyout in 2019 and launching his helium company. “It’s all around us, in a way. Every time you pick up your phone or look at your laptop, it’s got a connection back to helium.”

At the same time that demand for helium is spiking, there is a supply shortfall. Since the 1920s, the U.S. has been the largest supplier of global helium through its Federal Helium Reserve. But that is set to cease production in 2021, a fact that has caused prices to skyrocket.

Eight Capital analyst Phil Skolnick said, “Prices have been anywhere from $200 to $600/MCF.” (MCF is an abbreviation for 1,000 cubic feet.) “As a frame of reference, natural gas trades at about $3/MCF. Base case, we could see helium demand outpace supply at least until 2025.”

The helium market has the potential to be a “significant opportunity for Canada,” given it has one-fifth of the world’s helium resources and sits next door to the U.S., the largest consumer of helium, Skolnick said. Saskatchewan in particular has come out of the gates running — the province already has nine active helium wells in the province and 24 in the drilling process, according to the government of Saskatchewan.

Last month, Saskatchewan also became home to the largest helium purification facility in the country, owned and operated by Calgary-based North American Helium. The privately held company expects to produce more than 50 million cubic feet per year of purified helium for commercial sale at the $32-million facility.