The American firm MMEX Resources Corporation plans to produce green hydrogen in the province of Tierra del Fuego with a planned investment of US$ 500 million, with the aim of generating between US$ 120 and US$ 190 million of annual exports from its entry into operation in 2025.
Also, the initiative would create 1,500 jobs during the construction of the plant and up to 300 permanent jobs qualified when it begins operations, according to estimates made by the company.
The project is currently in the technical evaluation stage, a process that can take between 90 to 120 days.
Although the investment announcement of US$ 500 million was made last month by the company together with the Government of Tierra del Fuego, the US firm has just now released the fine details of the initiative.
Among the reasons argued by MEX for choosing Tierra del Fuego are the quality of the winds in the southern province, its strategic location facing the ocean (which facilitates export logistics) and the tax advantages it offers for being a free zone (no value added tax and less income tax, among others).
In dialogue with Télam, MMEX Project Financing Manager, Nabil Katabi, assured that “Tierra del Fuego has the best winds in the world, a lot of empty land and is on the sea located in front of Asia and Europe. These natural advantages are combined with the fact that it is a free zone and has tax advantages, which allows us to think of a good development.”
The project of the company from the North American country is thought from a purely export logic and its main bet is to get clients from Asia and Europe for at least 20 years.
Green hydrogen is one of the central renewable energy sources to consummate the energy transition in which most countries in the world are committed to achieve the goal of decarbonizing the energy matrix as the main response to climate change.
For being inserted in an area with tax preferences, Katabi considered it unnecessary to generate its own regulatory framework for the sector, such as the one recently announced for hydrocarbons. In any case, the director of MMEX considered “welcome” the National Hydrogen Strategy 2022-2050 on which the national government works together with the provincial administrations.
However, he emphatically disagreed with the possibility of establishing a retention scheme for fuel exports. “He would kill the industry before he was born,” said Katabi if that happened, although he considered that Tierra del Fuego -as a free zone- would not be affected by such a tax.
Green hydrogen is one of the central renewable energy sources to consummate the energy transition in which most countries in the world are committed to achieve the goal of decarbonising the energy matrix as the main response to climate change.
The so-called “fuel of the future” is generated via electrolysis of water -by separating hydrogen from oxygen- using clean energy sources such as solar, wind or hydroelectric electricity.
Because it has the best winds on the planet in the provinces of Patagonia and the highest levels of solar radiation in the north, Argentina has great potential to become a major player in the nascent industry.
In that sense, a couple of weeks ago The Minister of Productive Development, Matías Kulfas, when participating in the Global Exhibition of Green Hydrogen, in Barcelona, stated that “the conditions are in place for production on a scale that allows the generation of cost structures that end up making this production viable for its international commercialization “.
“Our country has the technological and productive capacity to reach 2030 producing close to 10 million tons of green hydrogen; for this to be possible, we have to structure a consistent international demand, financing and direct investment mechanisms,” the minister added. .
The investment in Tierra del Fuego will be carried out by MMEX through a technological agreement with Siemens Energy, which is already conducting wind resource assessment studies.
The initiative of the US firm projects the construction of a wind farm of up to 300 megawatts (160 MW base), and an electrolysis plant that will allow obtaining more than 55 tons of green hydrogen per day, in the city of Río Grande.
“The objective will be to develop a 300-ton-per-day ammonia or methanol conversion unit for global exports, which will be carried out through its own maritime cargo infrastructure,” MMEX reported.
The initiative of the US firm projects the construction of a wind farm of up to 300 megawatts (160 MW base), and an electrolysis plant that will allow obtaining more than 55 tons of green hydrogen per day, in the city of Río Grande.
When the current evaluation stage is over, the number of hectares needed to generate wind energy will be defined.
Thus, the production of green hydrogen would start “in 2025 or 2026”, as Nabil Katabi anticipated Télam, while estimating that, when fully launched, the project will generate foreign sales of between US$ 120 and 190 million a year.
To obtain the necessary funds to develop the business in its entirety, The company will seek financing from multilateral and development banks such as CAF and the Inter-American Development Bank.
The landing of MMEX is added to that of the Australian company Fortescue, which last year announced an investment of US$8.4 billion to produce green hydrogen in the province of Río Negro.
