Spotlight: US$3bn hydrogen project advances in southern Chile

A US$3bn green ammonia and hydrogen production project is moving forward in southern Chile, bolstering the country’s rapidly growing pipeline of green hydrogen-related initiatives.

The project, dubbed HNH Energy, involves installing 2GW of wind power generation that would allow a plant to produce 1Mt/y (million tons) of green ammonia in the far-south region of Magallanes through a process involving green hydrogen production.

According to the energy ministry, Austrian project owners AustriaEnergy and Ökowind have struck a deal with Trammo, a US-based commodity trading firm, which agreed to purchase and then transport and sell HNH Energy’s ammonia in the international market.

Both companies said they are committed to start operations at the plant within the next five years.

BNamericas reported previously that the project was under evaluation by the developers and that no final investment decision had been made.

The Magallanes region has been mentioned frequently in recent months as having the potential to become a green hydrogen production hub due to strong winds in the area, ports with good locations, and also experience with petrochemical production and export through a well-established methanol industry.

Traditionally, the region has not been as attractive for investments in generation owing to its small population and isolation from Chile’s national grid. But hydrogen production projects can bypass these limitations by building the capacity required on-site through wind generation.

Hans Kulenkampff, president of green hydrogen trade group H2 Chile, recently told BNamericas he estimates that around US$10bn in green hydrogen projects could materialize in Chile before 2025. This would however require some regulatory adjustments in order to accelerate project development, he said.

According to Kulenkampff, green ammonia projects are likely to come earlier than pure green hydrogen projects because they have well-established distribution and export networks, and can flourish under existing regulations.