Helium Supply Risks Shift as Blue Star Begins US Production at Galactica
Blue Star Helium has successfully started helium production at its Galactica project in Colorado, positioning itself as America’s newest helium producer with sales targeted for early 2026. The company’s strategic joint venture and low-cost operations underpin a promising growth trajectory amid rising helium and CO₂ demand.
- First helium production achieved at Galactica in December 2025
- Pinon Canyon processing plant operational, targeting January 2026 sales
- 50/50 joint venture with Helium One Global reduces capital risk
- Dual revenue streams from helium and natural CO₂ production
- Project life expected to exceed 12 years with staged expansion plans
A New Player in the US Helium Market
Blue Star Helium Limited has marked a significant milestone with the successful start-up of its Galactica helium and carbon dioxide production facility in Colorado. The Pinon Canyon processing plant began producing refined helium in December 2025, making Blue Star the newest helium producer in the United States. This development comes at a critical time as the US faces a growing helium supply deficit driven by expanding demand in high-tech industries.
The company is targeting short-term helium sales as early as January 2026, with ongoing commercial efforts to secure long-term offtake agreements. These contracts aim to provide stable revenue streams and underpin the project’s financial sustainability.
Strategic Joint Venture and Asset Portfolio
Blue Star’s Galactica project operates under a 50/50 joint venture with Helium One Global, a partnership that significantly de-risks capital exposure and accelerates the path to production. This collaboration allows shared operational and technical resources, reducing financial strain on Blue Star while leveraging Helium One’s expertise.
The company’s asset base is strategically located in Colorado’s Las Animas County, an area with favorable geology featuring high-grade helium and natural CO₂ concentrations and minimal hydrocarbons. Proximity to established infrastructure and purification facilities enhances logistical efficiency and market access.
Market Dynamics and Dual Commodity Revenue
Helium demand is rising sharply, driven by sectors such as semiconductors, aerospace, quantum computing, and clean energy technologies. The US helium supply has been constrained due to declining production from legacy sources and geopolitical tensions limiting imports. Blue Star’s entry into production aligns with a broader strategic push to secure domestic helium supply.
In addition to helium, Blue Star is developing its natural CO₂ resources, which serve critical industrial applications including food and beverage, agriculture, and emerging clean fuel technologies. The dual revenue streams from helium and CO₂ provide diversification and revenue stability, with operating costs estimated at approximately US$13 per thousand cubic feet of sales gas, supporting attractive margins.
Growth Pathway and Operational Outlook
The initial stage of development includes tying in five of seven drilled wells to the Pinon Canyon plant, with full plant capacity expected in the first half of 2026. Blue Star plans to expand production through additional well tie-ins and infill drilling, with a project life anticipated to exceed 12 years.
Further stages envision scaling up to a 30-plus well operation across Galactica and the nearby Pegasus project, potentially involving multiple processing plants. The company also aims to commercialize its high-grade CO₂ discoveries, including the Serenity resource, enhancing its product offering.
Risks and Considerations
While the project shows promise, Blue Star acknowledges risks typical of resource exploration and development, including commodity price volatility, regulatory approvals, environmental compliance, and capital requirements. The company does not provide earnings guidance, emphasizing that actual results may vary materially from projections.
Nonetheless, Blue Star’s strategic positioning, joint venture structure, and dual commodity focus place it well to capitalize on the tightening helium and CO₂ markets in North America.
Bottom Line?
Blue Star’s transition to production at Galactica sets the stage for a new domestic helium and CO₂ supplier amid tightening market conditions.
Questions in the middle?
- How quickly will Blue Star secure long-term offtake agreements to stabilize revenue?
- What impact will helium and CO₂ price fluctuations have on project profitability?
- How will the joint venture with Helium One Global influence future capital and operational decisions?
