Kornbluth: Lifting Qatar embargo should improve helium logistics – but Covid-19 remains an obstacle

Earlier this week, Saudi Arabia announced that it was restoring diplomatic relations with Qatar and immediately lifting its air, land and sea embargo that has been in place for more than three and a half years.

Saudi Arabia’s Arab allies – United Arab Emirates (UAE), Bahrain and Egypt – are expected to follow suit in lifting the embargo in the near future. Eventually, this should allow helium shipments from Qatar, which produces approximately 30% of the world’s helium, to once again transit (via truck) through Saudi Arabia and the UAE for shipment through the port of Jebel Ali (Dubai).

The Qatar embargo greatly disrupted the supply chain for helium shipments from Qatar when it was implemented back in June 2017, causing a brief shutdown of helium production at Ras Laffan as well as a period of tight helium supply that lasted for several months. While the major helium suppliers who rely on helium from Qatar quickly developed alternate routes to market, it is fair to say that the current supply chain is more complex, more costly, more time consuming and less reliable than the preferred route through Jebel Ali.

Unfortunately, lifting of the embargo will have limited impact on the helium supply chain in the immediate future. It should be possible to ship liquid helium containers via cargo ship from Hamad (Doha) to Jebel Ali in the relatively near future. These containers can then be transshipped from Jebel Ali, primarily to Asian and European destinations.

However, it appears that restoration of the optimal overland route from Qatar to Jebel Ali will take longer. Due to Covid-19, truck drivers crossing various borders in the region (Qatar/Saudi, Saudi/UAE) are subject to 14-day quarantine periods.

As a result of these quarantine periods, overland transportation between Qatar and UAE will be impractical until Covid has subsided and the mandatory quarantines have been lifted. While the precise timing is uncertain, one could speculate that the quarantine requirements could remain in place through mid-2021, if not longer.

On a positive note, it should immediately be allowable to consume helium from Qatar in Saudi Arabia, UAE, Bahrain and Egypt. Even if overland shipping is not immediately practical, this will still reduce the time/cost required to ship helium to these countries from alternate, more distant sources, including Algeria and the US.