Airgas has informed us of an impending price increase that will affect our contract (CNR01362).
As many of you may know, there is currently a global shortage of helium. In March of 2018, Airgas informed all customers of disruptions impacting the global helium supply of several of their third-party operated helium sources in the United States, including an ongoing allocation of crude helium to sources along the BLM pipeline system. As a result of the disruptions, which were beyond Airgas’s control, Airgas declared an Excuse of Performance/Condition of Force Majeure (“Force Majeure”), which remains in effect.
Helium Market Dynamics – Reasons for Current Supply Issues
- Demand is outpacing supply
- Strong growth in all segments: government/technology/lab & research/balloon
- Bureau of Land Management system, private crude helium sources in steep decline
- Helium production from Liquid Natural Gas reduced in some regions
- Most industrial gas companies allocating supply to customers
- Lack of major new sources will worsen shortages
- Project delays for smaller new sources in the U.S. and Qatar
- Next major plant (Gazprom Amur) expected to come on-stream in 2021 – 2022
- Continued geopolitical strife causes new supply chain challenges
- Rapid helium source cost increases
- Last BLM auction: +135% increase in average auction price
- Surcharges in effect from many industrial gas companies
While Airgas tries to mitigate rising costs wherever possible, the price must be adjusted in response to unavoidable pressures, including an increase in the cost to acquire and transport helium as well as meeting and exceeding rigorous safety and quality standards.
As a result of these extraordinary changes, all applicable gas pricing, fees, and regional ceiling prices will increase by 35%, effective February 1, 2019.
Airgas has been working diligently to do everything possible to ensure E&I members have access to helium while minimizing the cost increase impact. While this shortage is certainly impacting higher education, we wanted to let E&I members know that Airgas is available to help, such as finding ways to lower your helium usage requirements, identifying all helium applications that can use alternate products, and leak-checking any suspect helium manifold piping systems.
Airgas remains committed to providing the unmatched products, services, and expertise E&I members expect through a comprehensive distribution network of bulk and packaged industrial, specialty, and medical gases and related products.