Helium production to start in five years

New York. Commercial production from the vast helium field recently discovered in Lake Rukwa may start in five years, according to the CEO of the Norway-based company spearheading the project.

“If all goes according to plan, we could be in production by 2020 or 2021,” Helium One chief, Thomas Abraham-James said in a telephone interview.

Mr Abraham-James said additional testing will be carried out next year as part of a “feasibility analysis” focused on the Lake Rukwa find.

“With all these projects, we need to drill and confirm that the gas exists beyond any doubt,” he added.

Helium One, a startup firm incorporated last year, must also raise capital before it can begin extracting the gas, the CEO said. The company is reportedly seeking $40 million (Sh84 billion) in investments. It is still not clear how the Tanzanian government will participate in the project.

Energy and Minerals minister Sospeter Muhongo told The Citizen yesterday that more details would be known when the production agreement is negotiated and sealed.

“We have not come up with a production sharing agreement, but according to the law, the government must have shares in every new mine that is established in Tanzania on behalf of Tanzanians,” he said.

News of the Rukwa find has prompted speculation on the part of some Tanzanians that the country may be on the brink of a helium bonanza.

British and Norwegian researchers’ discovery of a reservoir that could contain 54 billion cubic feet of helium could ultimately generate “hundreds of millions of dollars” in revenues, Mr Abraham-James estimated.

Some independent analysts have estimated the total resources to be worthy $3.5 billion in monetary terms.

But the Norway-based CEO warned against viewing the discovery as the potential equivalent, in monetary terms, of Tanzania’s enormous natural gas reserves.

Additional reporting by Damas Kanyabwoya in Dar es Salaam