European consortium places its bets on green ammonia in Chile

An initiative planned in the municipality of San Gregorio in Magallanes aims to produce green ammonia (NH3V) for its subsequent export.

Within 24 hours of Freeport McMoran announcing the expansion of El Abra, where it will invest US$7.5 billion, an expected milestone emerged in the area of initiatives related to the green hydrogen industry that will be submitted this year to the Environmental Impact Assessment System (Sistema de Evaluación de Impacto Ambiental, SEIA).

The consortium HNH Energy submitted the “Integrated project for the production and export of green ammonia—HNH Energy” for environmental assessment, which will be developed in the municipality of San Gregorio in the Magallanes Region and involves a US$11 billion investment. This makes it the project with the highest investment cost submitted to the SEIA since its entry into force.

The initiative—owned by the consortium formed by Austrian companies Ökowind and Austria Energy Group and Danish company Copenhagen Infrastructure Partners (CIP)—aims to produce ammonia from green hydrogen and nitrogen separated from the air for subsequent international sale, in the first instance. Its intended location is 120 kilometers northeast of Punta Arenas, in the area known as Bahía Gregorio. However, part of the actions will be carried out in the municipalities of Punta Arenas and Laguna Blanca, both in the Province of Magallanes.

The Environmental Impact Assessment (Estudio de Impacto Ambiental, EIA), which was submitted to the Environmental Evaluation Service (Servicio de Evaluación Ambiental, SEA) and took more than two years to prepare, comprehensively considers all the components required for the production of green ammonia. It includes a process plant for the production of green hydrogen/ammonia, a wind farm to provide electricity, a port for the import of construction materials and components and for the subsequent export of ammonia by sea, an ammonia storage plant, and the works associated with a seawater desalination plant to ensure the supply for the process.

In numbers, the wind power generation capacity is 1.4 GW (194 wind turbines), it will have a hydrogen production of 270 thousand tons per year and 1.3 million tons of ammonia in the same period. In addition, it will have a storage capacity of 180 thousand tons per year (distributed in three tanks).

As detailed by the consortium in the EIA, the general schedule stipulates that construction will last six years, operation 50 years and closure two years. The estimated construction start date is the first half of 2027, once the RCA has been obtained. Meanwhile, the start-up phase of the operation is scheduled for the second half of 2030.

But this is not the only initiative that is expected to be submitted for environmental assessment this year. The Gente Grande project, to be developed by TEG Chile in Tierra del Fuego, which involves an investment of more than US$7 billion, is scheduled to enter the system during the fourth quarter of 2024.

The challenge for the SEA and the industry

The Minister of Energy, Diego Pardow, said that the entry of this project into the SEA demonstrates the confidence that investors and developers have in the country’s institutional framework. “As a State we have developed a series of coordinated actions between different ministries and public services that seek to provide certainty for private investment, not only for this project, but for the entire green hydrogen industry and its derivatives,” he said.

In this line, he commented that, along with the Green Hydrogen Action Plan released this year, “we are strengthening the development of this industry in conjunction with local authorities, such as the development of a public environmental baseline in Magallanes, the strengthening of the technical teams of the Environmental Assessment Service in the area, among others.”

The Executive Director of the SEA, Valentina Durán, confirmed that “this is the highest investment cost ever submitted to the SEIA,” and explained that “over the next five working days the SEA Magallanes Directorate will carry out the admissibility analysis, which is a requirement for initiating the environmental impact assessment.”

Regarding the preparations for assessing this mega-project, Durán confirmed that “the SEA has implemented various lines of action to achieve an effective, efficient and timely processing of the projects that make up the green hydrogen industry in Chile, to ensure that they comply with environmental regulations and adequately address their environmental impacts.”

Marcos Kulka, Executive Director of the Chilean Hydrogen Association (Asociación Chilena de Hidrógeno, H2 Chile), said that the submission of the initiative is a “very positive sign that shows the progress of the industry and that we receive with great satisfaction as a trade association.” He stressed that “this is the largest project to date,” and said that “we are aware that, as it is the most complex project that has been submitted to the Environmental Impact Assessment System, due to the number of components involved, it will be a challenge for the SEIA and a great learning opportunity for the industry.”

Source: Diario Financiero.