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ECONOMY | 16-06-2022 11:04

Tierra del Fuego pitches US$6-billion hydrogen dream

Tierra del Fuego Province is trying to lure investments in hydrogen or ammonium, seeking to diversify its economy away from fossil fuels to tap the global clean-energy transition.

An island region famed for its location at the very tip of South America wants to diversify its economy away from fossil fuels to tap the global clean-energy transition.

Tierra del Fuego Province – which translates to “land of fire” – is trying to lure investments in hydrogen or ammonium, with its base case targeting US$6 billion of spending on wind farms and electrolysers.

“Tierra del Fuego has the potential with its resources to do this,” Provincial Governor Gustavo Melella said in an interview on Tuesday. 

Melella, a former Salesian priest who switched course to politics in the mid-2000s, highlighted the province’s strong Patagonian winds and attractive geography since hydrogen producers could ship through both the Atlantic and Pacific oceans.

The provincial government recently completed a pre-feasibility study and is working on environmental considerations and infrastructure to pave the way for hydrogen projects, with the fuel viewed as crucial to reducing the reliance on carbon of heavy industries like steelmaking. Some companies are also betting that hydrogen fuel cells will be a better choice than batteries to power trucks and ships.

“We have to be ready for when change arrives,” Melella said at the province’s offices in Buenos Aires. “If not, when somebody wants to invest in two or three years, they won’t be able to do it here – the moment will have passed us by.”

Two international companies have expressed interest in developing hydrogen in Tierra del Fuego, Melella said. One is France’s TotalEnergies SE, which already produces natural gas there. The other is US-based MMEX Resources Corp, in partnership with Germany’s Siemens Energy AG. 

Melella won’t allow the involvement of UK investors because Tierra del Fuego’s jurisdiction would stretch to the Malvinas (Falkland) Islands, a British overseas territory fiercely claimed by Argentina.

Tierra del Fuego needs a new port so it can import wind turbines and export fuel. For that, officials are banking on Mirgor SACIFIA, a company based in the province that plans to spend US$200 million to build a new facility.

It’s difficult to ship liquid hydrogen long distances, the pre-feasibility study says. Until the world finds a solution, wind-powered water electrolysis plants in the province would probably produce ammonia, which is used to make fertilisers and plastics.

Tierra del Fuego’s economy depends on oil and gas drilling; tourism, since it’s a jump-off point to Antarctica; and electronics assembly plants attracted by special tax breaks. Other regions of Argentina on the Atlantic coast have already built wind farms, and Río Negro and Buenos Aires provinces are looking into hydrogen projects.

by Jonathan Gilbert, Bloomberg


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