Argentine state-controlled energy company YPF is nearing agreements to sell liquefied natural gas (LNG) from its planned $24 billion Vaca Muerta project. The company expects to finalize two or three contracts, each covering between 0.5 million and 1.5 million tonnes per year, before partners make a final investment decision in November.
Backed by YPF, Italy’s Eni, and Abu Dhabi’s XRG, the project aims to convert gas from the vast Vaca Muerta shale formation into a significant LNG export source. Initially, it will feature two floating LNG facilities with a combined capacity of 12 million tonnes per year, expandable to 18 million tonnes.
A dedicated 527-kilometre pipeline will transport gas from Vaca Muerta to the Atlantic coast in Río Negro province, supported by gas treatment and liquids infrastructure. Eni and XRG each hold about 32% stakes in the upstream blocks supplying the project, while YPF holds 36%. Securing long-term buyers is essential to finance the development. YPF CEO Horacio Marín noted that the financing package might not be fully finalized before the November investment decision, but lenders are expected to provide letters of intent.
Recent disruptions to LNG supplies from the Persian Gulf have led Asian buyers to seek more geographically diverse sources, potentially strengthening Vaca Muerta LNG's commercial appeal. The partners have also applied for Argentina’s RIGI investment incentive regime, marking another key step toward the final investment decision.
