Uruguay's State-Run Conglomerate Seeks Partners for Renewable Jet Fuel Project

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(Bloomberg) — Uruguay’s largest industrial conglomerate is seeking partners for a $200 million sustainable aviation fuel project it’s preparing to build to serve export markets.

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Ancap, the state-run oil and cement company, will call on potential investors, raw material suppliers and buyers of the renewable fuel known as SAF to submit an expression of interest as soon as this month, Chairman Alejandro Stipanicic said in an interview. He said the results of the three-month process could lead Ancap to enlarge the project’s initial annual capacity of 180,000 cubic meters (48 million gallons).

Uruguay, which generates more than 90% of its power from renewable sources, is trying to capture a slice of global investments in sustainable fuels and chemicals made from oilseeds and green hydrogen. At the same time, Ancap has signed contracts with foreign oil companies such as Shell in a bet that Uruguay’s continental shelf contains hydrocarbon riches like those discovered across the Atlantic in Namibia.

Read More: United Airlines Is Betting Big on a Pricey Green Aviation Fuel

The South American nation has until the end of the decade to establish itself as a global SAF exporter or risk being relegated to supplying canola oil to refineries in other countries, said Stipanicic, who sees production starting in late 2026. Ancap will close the tender for the basic engineering contract for the SAF plant on Monday.

“If we take too long with the SAF project there will come a time where the world pays us more for the raw material, canola oil, than the SAF,” Stipanicic said.

Other key points from the interview:

• Ancap plans to tender four offshore wind energy areas for production of green hydrogen during 2024
• The company aims to structure an investment fund this year to finance its participation in large energy projects
  • “The design of this fund isn’t simple,” Stipanicic said. “In the next 10 to 12 years Ancap could easily have to make decisions for $8 billion to $10 billion”
  • The fund, which will probably be structured as a financial trust, will allow Uruguayans to invest in those projects