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Global Helium Summit 2.0 September 13, 2016

Robert Jolley, PE Bureau of Land Management

New Mexico State Office Amarillo Field Office

U.S. Federal Helium Program

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September 2016

Federal Helium Program History BLM Organization Partnerships and Contract Holders Current Operations Look Ahead

In This Presentation:

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September 2016

1923 – First helium extraction plant built by Fort Worth Helium at Hicks Field to support Navy Department 1925 – Helium Act of 1925 authorized the Bureau of Mines to construct and operate 6 helium plants 1929 – Amarillo Helium Plant built (sold in 2007) 1943 – Exell Helium Plant built (sold in 2011) Thatcher Helium Plant built (closed in 1944) Navaho Helium Plant built in (returned to tribe in 1960) Otis Helium Plant built (closed in 1944) 1957 – Keyes Helium Plant built (closed in 1991) 1960 – Major Helium Legislation – Helium Act Amendments of 1960 1996 – Helium Privatization Act 2013 – Helium Stewardship Act 2014 – First Helium Auction 2021 – Scheduled Disposal of the Federal Helium System, per HSA

Federal Helium Program History

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September 2016

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September 2016

The BLM, a sub unit of the U.S. Department of the Interior manages over 245 million surface acres and over 700 million sub-surface acres

Public Lands Managed by the Bureau of Land Management (BLM)

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September 2016

51 Field Office Employees (Helium Operations)

• Downtown Amarillo Office – 801 S Fillmore • Cliffside Helium Plant – 12 miles NW of Amarillo, TX • Satanta Field Station – Satanta, KS

15 New Mexico State Office Employees (Helium Resources)

• Manages helium royalties associated with natural gas extraction on Federal lands

• Co-located in the Fillmore Office

Approved Employees 66 Current Employees 58

Vacancies 8

Amarillo Field Office Organization

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September 2016

4 Main Helium Functions Storage & Transmission Crude Helium Sales Resource Evaluation & Gas Analysis Helium Royalties from Federal Lands

BLM – Amarillo Field Office

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September 2016

The refiners comprising the CRLP are Air Products, Praxair, and Linde

Partnership between the BLM and CRLP began in 2003 under a 15-year agreement

CRLP provided construction capital to construct HEU administered through Cooperative Agreements

CRLP also provides major maintenance activities during annual plant shutdowns

BLM – Manages Gas Field Production, Leases and Operates HEU

Cliffside Refiners Limited Partnership (CRLP)

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September 2016

Company Contract Number Linde Gas North America, LLC 2016-3249 Praxair, Inc. 2016-3251 Air Products, L.P. 2016-3256 Air Liquide Helium America, Inc. 2016-3284 Pioneer Natural Resources USA, Inc 2016-3286 Keyes Helium Co., LLC 2016-3287 Matheson Tri-Gas, Inc. 2016-3288 Airgas Merchant Gases 2016-3290 Global Gases America 2016-3293 Linn Energy 2016-3296 IACX 2016-3297

Current Storage Contract Holders

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September 2016

Cliffside Helium Plant

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September 2016

Helium Storage Reservoir – Bush Dome

PresenterPresentation NotesHow gas field looks below ground. Very special formation. Helium is stored in dolomite. Anhydrite hold it in place. Otherwise it would migrate to the surface and escape to atmosphere. Very few gas fields like this one. Its called the Bush Dome.

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September 2016

Delivered

Sold

Accepted

Stored

U.S. Helium Recovery

Chart1

19601960

19611961

19621962

19631963

19641964

19651965

19661966

19671967

19681968

19691969

19701970

19711971

19721972

19731973

19741974

19751975

19761976

19771977

19781978

19791979

19801980

19811981

19821982

19831983

19841984

19851985

19861986

19871987

19881988

19891989

19901990

19911991

19921992

19931993

19941994

19951995

19961996

19971997

19981998

19991999

20002000

20012001

20022002

20032003

20042004

20052005

20062006

20072007

20082008

20092009

20102010

recovered

sold

Billion Cubic Feet

0.43

0.36

0.41

0.36

0.54

0.47

0.71

0.47

3.28

0.58

4.04

0.58

4.36

0.69

4.49

0.79

4.51

0.79

4.47

0.65

4.49

0.61

4.4

0.54

4.33

0.54

4.17

0.58

3.67

0.61

1.84

0.65

0.76

0.69

1.23

0.72

1.15

0.79

1.16

0.83

1.37

0.9

1.16

0.97

0.25

1.05

0.82

1.05

0.62

1.08

0.62

1.37

0.92

1.44

1.89

2.24

2.22

2.56

2.25

2.88

3.01

3.06

3.11

3.18

3.36

3.4

3.58

3.45

4.04

3.62

3.64

3.46

3.71

3.41

4.18

3.86

4.11

4.04

4.11

4.2

3.53

4.56

3.14

4.76

3.15

4.58

3.13

4.4

3.1

4.69

2.74

4.8

2.86

4.94

2.78

4.96

2.87

4.67

2.81

4.24

2.71

4.61

Sheet1

yearrecoveredsold

19600.430.36

19610.410.36

19620.540.47

19630.710.47

19643.280.58

19654.040.58

19664.360.69

19674.490.79

19684.510.79

19694.470.65

19704.490.61

19714.40.54

19724.330.54

19734.170.58

19743.670.61

19751.840.65

19760.760.69

19771.230.72

19781.150.79

19791.160.83

19801.370.9

19811.160.97

19820.251.05

19830.821.05

19840.621.08

19850.621.37

19860.921.44

19871.892.24

19882.222.56

19892.252.88

19903.013.06

19913.113.18

19923.363.4

19933.583.45

19944.043.62

19953.643.46

19963.713.41

19974.183.86

19984.114.04

19994.114.2

20003.534.56

20013.144.76

20023.154.58

20033.134.4

20043.14.69

20052.744.8

20062.864.94

20072.784.96

20082.874.67

20092.814.24

20102.714.61

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September 2016

Helium Enrichment Unit Cliffside Field

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September 2016

New Crude Helium Compressor

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September 2016

Daily Pipeline Activity Report

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September 2016

Total Crude Helium Delivery Capability through 2021 with centralized compression 4,595 MMcf

Fiscal Year

Helium Production

(MMcf), with centralized

compression 2016 1,325 2017 1,092 2018 876 2019 716 2020 586

1,325

1,092

876 716

586

0

200

400

600

800

1000

1200

1400

2015 2016 2017 2018 2019 2020 2021

Helium Production (MMcf), with centralized compression

FY2016 and beyond production capacity is dependent field pressure

Production Capacity

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September 2016

Outages

Chart1

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Days Less than 1 MMcf Production

FY2004 to Present - CHEU Outages

81

35

37

44

15

23

13

19

9

5

28

32

102

Sheet1

FY2004 to Present - CHEU Outages

FYDays Less than 1 MMcf Production

200481

200535

200637

200744

200815

200923

201013

201119

20129

20135

201428

201532

2016102

Sheet1

Days Less than 1 MMcf Production

FY2004 to Present - CHEU Outages

Sheet2

Sheet3

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September 2016

Total Program Revenue $1,876,203,782 Bcf *Projected Balance = 8,357,539,000 (8.4) Public 4,537,539,000 (4.5) Private 3,820,000,000 (3.8)

Remaining Helium Available 1,537,539,000 (1.5) for Private Sale Remaining Production 4,595,000,000 (4.6)

Disposal of Assets September 30, 2021 Cliffside Gas Field Federal Helium Pipeline Federal Helium Reserve

* Projected balance on October 1, 2016 – Numbers above are subject to change

Key Figures and Dates

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September 2016

Short-Term October 1 - Leadership Transition October 15 – 10-Day Planned Outage March 2017 - Central compressor tie-in April 2017 – Federal End Users Forum in Amarillo, TX June 2017 – 4th Auction and Sale of Crude Helium in Amarillo

Mid-Term FY2018 - Final Crude Helium Auction and Sale April 2018 – Expiration of the 15-year agreement with the CRLP Continued support to Federal end-users and delivery of privately held crude

helium Long-Term Drafting of new In Kind regulations (43 CFR 3195) September 30, 2021 – Disposal of the Federal Helium System

the Federal Helium Reserve; the Cliffside Field; the Federal Helium Pipeline; and all other infrastructure owned, leased, or managed under contract by the Secretary…

Look Ahead

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September 2016

Point of Contact for detailed questions pertaining to the Federal Helium Program:

Website: Amarillo Field Office website

www.blm.gov/nm/amarillo Amarillo Field Manager

801 S. Fillmore, Suite 500 Amarillo, TX 79105 wk: 806-356-1002 cell: 806-683-7730

Questions

http://www.blm.gov/nm/st/en/fo/Amarillo_Field_Office.html

U.S. Federal Helium ProgramIn This Presentation:Federal Helium Program HistoryInterior Organizational ChartPublic Lands Managed by the Bureau of Land Management (BLM)Amarillo Field Office OrganizationBLM – Amarillo Field OfficeCliffside Refiners Limited Partnership (CRLP)Current Storage Contract HoldersCliffside Helium PlantHelium Storage Reservoir – Bush DomeU.S. Helium RecoveryHelium Enrichment Unit Cliffside FieldNew Crude Helium CompressorDaily Pipeline Activity ReportProduction CapacityOutagesKey Figures and DatesLook AheadQuestions