Argentina’s state-run energy firm YPF expects to take together with its foreign partners the final investment decision for the $20-billion Argentina LNG project in the middle of 2026, YPF’s chief executive Horacio Marin told Reuters on Thursday.
YPF, Italy’s Eni, and XRG, the new energy investment company of Abu Dhabi’s national oil firm ADNOC, are developing the Argentina LNG (ARGLNG) project. Argentina LNG will be an integrated upstream and midstream gas development project designed to develop the resources of the huge shale basin Vaca Muerta field and serve international markets, exporting LNG in various phases, with first exports potentially by 2030.
Eni and YPF signed in October the Final Technical Project Description, which involves gas production, processing, transportation, and liquefaction for export through two floating gas liquefaction units (FLNG) with a capacity of 6 million tons per year each.
Last month, Eni and YPF signed a non-binding agreement with XRG for the potential involvement of ADNOC’s company in the 12 MTPA phase of the integrated project.
LNG exports from the 12 MTPA project phase involving Eni and XRG will likely start in 2030 or 2031, Marin said told Reuters today.
Early next year, YPF will retain JP Morgan to seek project financing for this phase, the executive said, adding that project financing usually covers 70% to 80% of similar large-scale projects.
Huge shale gas reserves are laying the foundations of pipeline and LNG exports out of Argentina, which could make South America’s second-largest economy a major force in regional and global gas supply.
Argentina has the resource base—the vast unconventional reserves in the Vaca Muerta shale basin in the Neuquen province. But it needs to build up infrastructure to ship the gas from supply centers to interstate regional pipelines and planned LNG export facilities.
Argentina could see its natural gas production peak at 180 million cubic feet per day (Mmcd) by 2040 under a base-case scenario, with the potential to reach as high as 270 Mmcd if the country successfully develops all its planned LNG export projects, Wood Mackenzie said in a July outlook on the country’s gas and power markets.
By Michael Kern for Oilprice.com
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