Helium – More than just hot air

Helium is a colourless, odourless inert gas that is non-toxic and non-flammable. It is a dynamic element with a wide array of uses – ranging from acting as a cooling agent in MRI units to functioning as a pressurizing agent in rocket propulsion.

There are two primary ways to produce helium: (1) capturing it as a by-product of natural gas production; or (2) extracting it through dedicated helium wells.

The global helium market currently relies on major natural gas-producing countries such as Qatar, Algeria, Russia and the United States for helium production. Overall concentrations of helium captured as a by-product of natural gas production are low in these countries in comparison to the concentration of helium being produced by certain Canadian provinces.

Sharing a unique geographic makeup, Alberta and Saskatchewan have geological formations containing helium concentrations above the global benchmark, enabling these two provinces to rely on the second approach – drilling for and producing helium from dedicated helium wells.

Production of helium from dedicated wells creates an independent helium industry, making the extraction of helium more economical than in jurisdictions producing helium as a by-product of natural gas production. There are also environmental benefits from having an independent helium industry, as the greenhouse gas footprint from producing helium from dedicated wells is less than capturing it as a by-product of natural gas production.

Current developments, regulatory framework and incentives

Saskatchewan is currently Canada’s largest helium producer and has several companies exploring for helium, including North American Helium Inc. (North American Helium), Weil Group, Royal Helium Ltd. (Royal Helium), Global Helium Corp. (Global Helium) and Avanti Helium Corp. (Avanti Helium). A number of companies are already producing helium in southwest Saskatchewan. North American Helium currently operates the largest helium purification facility in Canada near Battle Creek, Saskatchewan, and has recently brought its seventh helium plant onstream.

In Alberta, Thor Resources Inc. (Thor Resources), First Helium Inc. (First Helium), Royal Helium and Global Helium, among others, are exploring for and/or producing helium. Exploration has been ramping up in southeast Alberta, with Royal Helium recently commissioning its helium facility near Brooks.

Recently, the Helium Developers Association of Canada was formed (with founding members being Avanti, First Helium, Global Helium, Royal Helium and Thor Resources) to focus on the growing demand for a stable, long-term supply of Canadian helium. Among other things, the group is advocating for balanced tax treatment (as it relates to certain exploration and development expense deductions) for helium with other critical minerals.

In both Saskatchewan and Alberta, the helium sector is generally governed by applicable petroleum and natural gas legislation, regulations and administrative bodies. Saskatchewan’s relevant administrative body is the Ministry of Energy and Resources, and the applicable legislation and regulations include the Crown Minerals Act and the Oil and Gas Tenure Registry Regulations. In Alberta, the relevant administrative body is the Alberta Energy Regulator, and the relevant legislation and regulations include the Mines and Minerals Act, the Natural Gas Royalty Regulation, and the Petroleum and Natural Gas Tenure Regulations.

Saskatchewan recently introduced its Helium and Brine Mineral Tenure Policy. This policy provides (among other things) that Crown disposition holders issued (i) rights for helium and associated gases, or (ii) brine minerals (such as lithium) prior to October 16, 2023 may consent to overlapping dispositions of other commodities in the same stratigraphic horizon and land location.

While the existing application process for helium and associated gases, and the public offering process for brine minerals, continue to apply, as of October 16, 2023, helium and associated gases and brine mineral dispositions may be issued in the same stratigraphic horizon and land location without consent if no helium or brine mineral dispositions are then active in such lands. The rightsholders must not interfere with each other’s operations.

To encourage development in the helium industry, both Saskatchewan and Alberta have a favourable Crown royalty rate of 4.25% for helium.

Saskatchewan has also expanded two programs to include eligible helium projects: the Oil and Gas Processing Investment Incentive (OGPII) and the Saskatchewan Petroleum Innovation Incentive (SPII).

  • The OGPII provides eligible value-added helium projects with transferrable oil and gas royalty credits worth 15% of eligible costs. This incentive allows up to a maximum of $75 million in royalty credits per project.
  • The SPII provides eligible helium innovation commercialization projects with transferable oil and gas royalty credits worth 25% of eligible costs, allowing for a maximum of $5 million in royalty credits per project.

Further, Saskatchewan has expanded the PST exemption for downhole drilling services to include drilling for helium.


There are several considerations regarding the helium industry and the advancement of helium projects in Western Canada.

For example, the increase in helium production in Alberta and Saskatchewan has the potential for conflicts among subsurface participants, considering that the rise of helium production could possibly increase the competition for land leases in or on lands rich in helium and other resources. With the variety of emerging commodity sources and subsurface uses, besides helium – like oil and gas, carbon capture utilization and storage, lithium, hydrogen and geothermal – jurisdictions will need to design and adapt tailored regulations to avoid property management and rights issues. The recent introduction of Saskatchewan’s Helium and Brine Mineral Tenure Policy is one such example.

Overall, it seems that the jurisdictions commencing the development of their respective independent helium industries, guided by tailored regulations and supported by government incentives, should have an advantage over other jurisdictions looking to break into the market in the future.

MLT Aikins has advised on numerous energy projects, and has extensive experience in advising clients on the regulatory and commercial / legal aspects relating to such projects, including helium.  If you’re interested in advancing a helium project, we would be delighted to advise you. Contact us to learn how we can help.

Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.