Argentina’s state energy company YPF, Italy’s Eni and Abu Dhabi’s XRG are targeting a final investment decision (FID) to be signed in Buenos Aires by year-end for a large-scale LNG (Liquefied Natural Gas) project linked to the Vaca Muerta shale gas field, it is reported.
The project involves piping gas produced from the Vaca Muerta shale field to the Atlantic coast, where it would be liquefied and exported via floating LNG (FLNG) facilities. A dedicated pipeline of about 527 kilometers is planned from Vaca Muerta to the coast of Río Negro province, with two FLNG units reportedly to be deployed offshore. The project applies Eni’s floating LNG technology, which is expected to reduce construction time and costs compared with conventional onshore liquefaction plants, it is reported.
Total investment is reported at approximately $24 billion, with an ownership structure of YPF at 36% and Eni and XRG each holding 32%. The two FLNG units are reported to have a combined initial capacity of 12 million tonnes per year, with potential expansion to 18 million t/y. YPF CEO Horacio Marín has reportedly mentioned signing the FID in Buenos Aires by year-end, targeting a construction start in February 2027. Separately, the companies are reportedly working to secure two to three additional LNG sales agreements in the 0.5-1.5 Mtpa range.
Vaca Muerta is one of the world’s leading shale gas and shale oil deposits, and Argentina is pursuing a national strategy to leverage this resource to transform itself into an LNG exporter, with this project as a central pillar.
The project’s structure — transporting gas from an inland shale field via a long-distance pipeline to the coast before liquefying and exporting it via floating facilities — reflects a recent trend in LNG projects of using FLNG to reduce upfront investment burden and construction time instead of building new large onshore liquefaction plants. An LNG export project of this scale in South America approaching FID is unusual and suggests Argentina has made substantial progress in converting its shale gas development achievements into actual export volumes. The ownership structure combining a national company (YPF) with European (Eni) and Middle Eastern (XRG) capital reaffirms the common practice in large LNG projects of attracting investors of diverse nationalities to spread risk. The push to secure multiple LNG sales agreements even before FID reflects a typical approach of locking in long-term offtake contracts early to support project financing. If realized, this project could reshape the supply picture of the Atlantic basin LNG market as South America emerges as a new LNG supply source.
Whether the FID signing targeted for year-end actually takes place is the most important next milestone. If FID is reached, whether the construction start planned for February 2027 proceeds on schedule is also worth watching. If the reported two to three additional LNG sales agreements are signed, which markets — Europe, Asia or others — that volume targets also needs to be confirmed. In addition, the timeline for the 527-km pipeline construction and FLNG facility contract awards, including EPC contractor selection, also bears watching.