Chile’s ENAP Says Working on Decarbonization Plan

Chile’s Empresa Nacional del Petroleo (ENAP) has said it is working on a decarbonization plan with goals for 2035 and 2050, as it announced $3.5 billion in capital for 2024–28.

The five-year investment, which is subject to financial performance, “allows addressing aspects such as integrity and performance of refinery and logistics assets, operational excellence, process safety, compliance with environmental commitments, and the development of new businesses”, the state-owned oil company said in a press release. The plan was agreed at ENAP’s shareholder meeting.

“In addition, Enap announced that it is working on a Decarbonization Plan with specific goals for 2035 and 2050, which it will soon announce”, ENAP said.

Earlier this month ENAP said it had awarded the construction contract for a 1,000-kilowatt green hydrogen production project, part of its plan to produce “new fuels”. Planned to be put into service next year, the facility will use power from the Vientos Patagónicas wind farm, where ENAP holds a majority stake. The green hydrogen produced here will supply vehicle charging stations, as well as serve as a feedstock for a fractionation plant in Cabo Negro, according to Enap.

“With the construction of this plant, Enap hopes to generate knowledge and experience in the production and use of this energy in the Magallanes region as part of its strategy for the development of new fuels”, ENAP said in a news release April 4.

“The German company Neuman & Esser won the bidding process for the project, which considers electrolysis, storage, charging station, and a detailed training plan for company workers, among others”.

ENAP chief executive Julio Friedmann said in a statement at the time, “ENAP will be the first company to produce green hydrogen as a final product in Magallanes, and it is an important step in the objective that we have set for ourselves to be the most relevant actor to accelerate the energy transition in our country through the continuous development of better fuels”.

Meanwhile at the meeting of ENAP’s ordinary shareholders, company officials highlighted its financial position. ENAP had already announced its annual financial results February 2.

For 2023 it logged $1.4 billion in earnings before income tax, depreciation and amortization (EBITDA), ENAP’s highest yearly EBITDA in its history. It also highlighted “profits of US$ 565.8 million and a reduction of its consolidated debt by US$ 602 million”.

“The 2023 EBITDA is 2.5 percent higher than in 2022 and, although profits for the period were slightly lower than the US$575.3 million in the previous year, this result includes a net impairment of US$113.1 million due to the impairment of some of the subsidiary’s assets in Argentina”, ENAP said in the February announcement. “Without this adjustment, profits would have exceeded US$680 million”.

It said it had remitted $400 million to the state in the fourth quarter of 2023, on a request by the Finance Ministry as an advance for 2023 and 2024 profits.

The 2023 performance was “undoubtedly very satisfactory, reflecting not only a better price situation, but also good management of the company that is part of a policy agreed upon with the Ministry of Finance of reducing debt, reducing the financial burden, improving management, and developing sustainable investments, not only from an environmental point of view but also financially”, Chile Finance Minister Mario Marcel was quoted as saying in the post-shareholder meeting statement by ENAP.

Friedmann said in the statement, “In the last 18 months, we have reduced ENAP’s debt by more than US$1 billion”.

“Today, we are focused on improving our financial situation, following the path of debt reduction, and achieving a relevant production increase”, the ENAP chief executive added. “For this, we have a responsible investment plan, prioritizing initiatives that allow us to safeguard the company’s sustainability, good results, and business for the coming decades, ensuring operational safety and reducing environmental impacts”.

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