Island at World’s End Launches $6 Billion Hydrogen Dream

(Bloomberg) — An island region famous for its location at the tip of South America wants to diversify its economy away from fossil fuels to harness the global transition to clean energy.

Argentina’s Tierra del Fuego province – which translates to Tierra del Fuego – is trying to attract investment in hydrogen or ammonium, with its base case targeting $6 billion in spending on wind farms and electrolysers.

“Tierra del Fuego has the potential with its resources to achieve this,” Governor Gustavo Melella said in an interview on Tuesday. Melella, a former Salesian priest who turned to politics in the mid-2000s, pointed to Patagonia’s strong winds and the province’s attractive geography since hydrogen producers could ship across the Atlantic and Pacific oceans.

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

Read more: Why hydrogen is the hottest thing in green power

“We have to be ready when the change comes,” Melella said at the province’s offices in Buenos Aires. “Otherwise, when someone wants to invest in two or three years, they won’t be able to do it here, the time will have passed us.”

Two international companies have expressed interest in developing hydrogen in Tierra del Fuego, Melella said. One is the French TotalEnergies SE, which already produces natural gas there. The other is the American company MMEX Resources Corp., in partnership with the German Siemens Energy AG.

Melella will not allow the involvement of British investors because Tierra del Fuego jurisdiction would extend to the Falkland Islands, or Malvinas, a British overseas territory fiercely claimed by Argentina.

Tierra del Fuego needs a new port to be able to import wind turbines and export fuel. For this, officials are betting on Mirgor SACIFIA, a company based in the province that plans to spend $200 million to build a new facility.

It is difficult to ship liquid hydrogen over long distances, according to the prefeasibility study. Until the world finds a solution, the province’s wind-powered water electrolysis plants would likely produce ammonia, which is used to make fertilizers and plastics.

Tierra del Fuego’s economy depends on oil and gas drilling; tourism, since it is a springboard 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 the provinces of Rio Negro and Buenos Aires are studying hydrogen projects.

Further reading:

  • BP’s $36 billion project spotlights huge green hydrogen hubs
  • Total and Adani team up for multi-billion Indian hydrogen plans
  • Uruguay’s hydrogen roadmap predicts $1.7 billion in exports by 2040
  • Argentina can be a major exporter of green hydrogen by 2030, says minister

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