Uruguay watch: Alur e-fuels call, Ancap offshore round

Uruguayan biofuels firm Alur is seeking expressions of interest to carry out a synthetic fuels production project.

Officials are looking for a firm to produce, using carbon captured from Alur’s Paysandú bioethanol plant, the likes of e-methanol and sustainable aviation fuel.

The project developer will shoulder the risk and cost, said Alur, adding that its parent, state hydrocarbons and cement firm Ancap, may participate. Ancap has industrial sites and midstream infrastructure that could be leveraged. 

Project proposals must comprise green hydrogen production and carbon capture elements. Obtaining carbon – a key component of some sustainable fuels – from biomass is typically cheaper than getting it using other methods.

Ancap holds a 90.8% stake in Alur, the balance belonging to Venezuelan state oil company PDVSA.

Alur and Ancap were advised on the project by Belgian strategy consultancy Hinicio, which has offices in Latin America. 

Green hydrogen – which requires clean energy and water to produce – can be combined with other components to produce derivatives, which can be used as fuels or as feedstock in the chemical and fertilizer industries. Uruguay has an abundant supply of clean power and is planning to begin building out capacity, initially with solar PV, this decade.    

A Dutch project consultancy and developer recently said Chile’s central zone, on account of access to biomass, was potentially attractive for e-methanol projects.

As things stand, Latin America's green hydrogen industry may develop first in zones with existing industrial infrastructure and initially target domestic offtakers via megawatt-scale plants. 

British hydrogen expert Joe Howe, who contributed to the UK’s hydrogen strategy with a chapter on realizing domestic economic benefits, told BNamericas recently it was possible for Chile to adopt a dual-track approach of developing export-focused projects in tandem with plants designed to supply domestic offtakers. Challenges facing some export projects, chiefly those planned for the country's barren, isolated far south, surround infrastructure, territorial planning and human resources. 

Howe is an energy professor at the University of Chester in the UK and chair of regional industry decarbonization body North West Hydrogen Alliance.

Click here for more information on the Alur call

 ***

Ancap received three offers for two offshore hydrocarbons areas in the second open round of 2022.

Argentine state hydrocarbons firm YPF bid for areas OFF-4 and OFF-5. A consortium comprising US player APA and Shell bid for OFF-4.

In the first round of 2022, Ancap awarded acreage to APA and Shell. 

Shell was granted rights to blocks OFF-2 and OFF-7 while APA was awarded block OFF-6. Contract signing is pending, according to an Ancap offshore acreage map.

Earlier this year British upstream company Challenger Energy signed a 30-year license for OFF-1, becoming the only active E&P player in the country. Offshore exploration in Uruguay gathered pace in 2016 with the drilling, by Total, of the first well in around 40 years. Oil and gas shows have been reported, but no commercial discovery made. 

In 2021, Norwegian exploration company PGS said it had signed an agreement with Ancap to reprocess about 11,000km of seismic data obtained off the Atlantic coast several years ago.

Discoveries off West Africa in geological formations analogous to those of Uruguay, along with the country’s stable operating environment, have spurred the interest of E&P firms, according to Ancap.