The Haru Oni project will use green hydrogen derived from 3.4MW of dedicated wind energy to produce green methanol, which will then be used to produce carbon-neutral gasoline and other products.
Civil works in Punta Arenas in the deep southern region of Magallanes kicked off last week, and a formal ground-breaking ceremony will be held on 10 September, Andes Mining and Energy (AME), the Chilean energy firm that heads the HIF consortium, told Argus.
The pilot project will produce 350 metric tonnes/yr of methanol and 130,000 liters/yr of gasoline, and is designed to be scaled up in two subsequent stages.
The pilot plant is scheduled to begin operating in May 2022. The methanol and gasoline will move about 35km (21.7 miles) by truck to Puerto Mardones for export. The project will also produce 16 t/yr of carbon-neutral LPG.
Eyeing the EU market, AME plans to make a final investment decision next year on an $800mn commercial-scale plant with methanol production of 140,000 t/yr, or its gasoline equivalent. Before the commercial plant starts up in late 2024 or early 2025, AME will decide whether to build a world-scale methanol plant for launch in 2026, AME chief executive Clara Bowman has said. A final decision on whether to build the 1.4mn t/yr plant is likely in 2023. The company is working on similar projects in the US and Australia.
HIF partners include Italian generator Enel, German engineering giant Siemens and Chile's state-owned oil company Enap. The German government has provided financing.
HIF is one of several green hydrogen projects in the pipeline in Chile, where 1,800GW of solar and wind energy potential is some 70 times more than current installed capacity.
Driven by a 2050 net-zero emissions target, Chile issued a green hydrogen strategy in late 2020 with a vow to become the world's lowest-cost producer, and to decarbonize the strategic copper mining industry and diversify exports.
In northern Chile, France's Engie is working with the copper mining industry to decarbonize heavy transport and introduce green ammonia for manufacturing mining explosives in conjunction with Chilean firm Enaex.