Uruguay’s Ancap to Launch Natural Hydrogen Exploration Program as State Energy Companies Face Integration Pressure

Ancap will present two projects to Uruguay’s executive branch covering natural hydrogen exploration along coastal areas and analysis of underground storage capacity for carbon dioxide, hydrogen, or natural gas sequestration. San Román announced the initiatives at the LATAM Renewables Congress organized by Uruguay’s Renewable Energy Association (AUDER), drawing parallels to the country’s petroleum exploration efforts. The company is examining whether Uruguay’s geological conditions match regions where natural hydrogen deposits have been discovered elsewhere, despite lacking current evidence of domestic reserves.

The natural hydrogen program advances alongside Ancap’s refinery transformation plans. San Román indicated the La Teja facility will transition toward biorefinery operations incorporating recycled material processing, moving beyond what she characterized as outdated bioethanol and biodiesel production methods currently used by subsidiary ALUR. The conversion targets lower carbon footprint biodiesel production, though implementation depends on investment project approvals still under study and subject to Uruguay’s specific needs.

Uruguay currently receives natural gas from Argentina through a contract between UTE and Pan American Energy signed in December 2025 and expiring in November 2026. The agreement supplies the Punta del Tigre thermal plant to replace diesel consumption. UTE president Andrea Cabrera confirmed the utility is evaluating contract renewal for more consistent natural gas supply.

The energy initiatives emerge amid renewed pressure for operational integration between Ancap and UTE. Former Ancap president Alejandro Stipanicic has advocated for shared board members between the state enterprises to enable “cross-pollination of positive experiences,” citing international precedents like Spain’s Repsol and Colombia’s Ecopetrol combining petroleum and electricity operations. Stipanicic proposed the arrangement as necessary for adapting to integrated energy markets where hydrogen serves as catalyst, though the suggestion reportedly met cool reception from both UTE leadership and executive branch officials preferring such discussions remain private.

Ancap also operates pilot hydrogen projects targeting industrial transport fuel supply and a HEFA initiative for sustainable aviation fuel production as part of broader resource diversification. The International Energy Agency reported global primary energy consumption increased 62 percent over 25 years through 2025, with solar photovoltaic, natural gas, and petroleum driving a 1.3 percent single-year increase.