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O&G watch: Green hydrogen open season, Rockhopper license, biodiesel prices, LNG quotes

Bnamericas Published: Wednesday, November 30, 2022
O&G watch: Green hydrogen open season, Rockhopper license, biodiesel prices, LNG quotes

Power firm AES Andes has begun an open season for companies interested in securing future output from its Adelaida green hydrogen production facility, planned for Antofagasta region in northern Chile.

The open season runs until April 7, which is the deadline for submitting offers.

With equivalent capacity of 2.5MW, Adelaida is designed to produce up to 1,000kg/d, using power from renewable sources and desalinated water.

Planned for the site of the AES Andes 545MW Angamos thermoelectric plant in Mejillones, the complex will also have two hydrogen fueling stations for the likes of mining or port sector vehicles. Construction of the facility is due to start mid-2023, with operations scheduled to begin in 2024. Angamos' two coal-fired units are expected to be available for retirement from 2025.  

Javier Dib, CEO of AES Andes, said the initiative seeks to “activate the market and trigger a specific demand on the part of the companies that would like to have more sustainable and environmentally friendly operations.”

He added: “This is the first green hydrogen open season to be held in South America and it is also an excellent showcase for the country.”

Chile has a portfolio of green hydrogen projects targeting the domestic offtake and export markets, leveraging wind resources in the south and solar in the north. Given the infrastructure and potential consumers in the north, home to industrial hubs, that part of the country is seen as best positioned to lead the charge.

Gigawatt-scale export projects planned for windswept southern region Magallanes will involve significantly more logistical and planning challenges.

Click here to access the bidding rules online application form

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The Falkland Islands government extended to December 2024 the South Falkland basin production licenses held by British upstream firm Rockhopper.

The company holds a 100% stake in the licenses and a 35% interest in areas in the North Falkland basin, where a final investment decision on the Sea Lion project could be made by end-2024, officials said recently.

In September, Israel’s Navitas Petroleum completed an associated farm-in at the North Falkland basin, obtaining a 65% stake.

Rockhopper CEO Samuel Moody said in a regulatory filing: “Whilst our primary focus is on working with Navitas to bring the Sea Lion development in the North Falkland basin to fruition, this extension will enable us to progress our understanding of these highly prospective licences in the south – in particular, the PL011 licence which adjoins the Borders & Southern Darwin discovery – which offer the opportunity for future regional development in the Falklands.”

Sea Lion holds 530Mb (million barrels) of 2C recoverable resources.

***

Argentina’s federal energy department established prices for November-March for biodiesel used in diesel blends.

 - For operations from November 15-30: 242,000 pesos (US$1,446) a metric ton

 - For operations in December: 251,680 pesos a ton

 - For operations in January 2023: 261,747 pesos a ton

 - For operations in February 2023: 272,217 pesos a ton

 - For operations in March 2023: 283,106 pesos a ton 

The price hikes are in line with the government’s Precios Justos (fair price) program, designed to help tackle soaring inflation, currently nudging 90% annually. Under Precios Justos, prices at the pump cannot rise more than 4% in December-February and by 3.5% in March.   

The government introduced a biofuels law in 2021 and later published associated secondary legislation to guide its implementation. The biofuels law, in force until end-2030, was branded a promotional regime by the government, with some quarters of the biofuel industry criticizing it as damaging to the sector. 

Under the law, the minimum proportion of bioethanol in the gasoline mix remains at 12% and the minimum proportion of biodiesel in the diesel mix is 5%, down from 10%. The energy department is authorized to make future cuts. Rules were temporarily tweaked this year, amid a national diesel shortage, to permit a higher proportion of biodiesel in the finished blend. 

***

State energy company Enarsa asked international firms to indicate how many LNG shipments they would be willing to send – and at what price – in 2023, local media outlet EconoJournal reported.

Officials received non-binding quotes from at least five of its usual suppliers for a total of up to 30 shipments, volumes that could cost an estimated US$2.0bn, the report said.

Enarsa reportedly offered to make a partial upfront payment for the imports.

Argentina is working to boost domestic gas production and transport capacity to help substitute expensive imported gas.

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