Shell signs accord with Argentina’s YPF to develop LNG plant

Shell Plc has signed an agreement with Argentina’s state-run energy company YPF SA to work on a plan to export liquefied natural gas.

YPF’s executive chairman, Horacio Marin, signed the accord in the Netherlands with Shell’s LNG chief, Cederic Cremers, YPF said in a statement Thursday.

The deal is a boost for Argentina’s LNG ambitions — and for President Javier Milei’s bid to attract foreign investment — after YPF’s original partner in the venture, Malaysia’s Petronas, exited.

Shell will help to develop the first phase of the “Argentina LNG” project, which envisions building floating units with capacity to export 10 million tons a year of the fuel. The agreement isn’t a firm decision to proceed with an investment in engineering and design for the liquefaction vessels. That decision will be taken at a later date.

By any measure, construction of the so-called FLNGs would require billions of dollars. To lure the investments, libertarian Milei — who’s on a crusade to deregulate Argentina’s economy and open it up to business — has included LNG export projects in a sweeping incentives programme.

Shell’s interest comes as YPF moves to convince Argentina’s drillers in the heralded shale patch Vaca Muerta to rally around a single LNG plan.

That’s why, even before Argentina builds any of its own dedicated capacity, YPF has already signed up to supply an LNG vessel that will be provided in 2027 by Golar LNG Ltd, a deal that was brokered by rival driller Pan American Energy Group.

YPF this week boosted its reserves of shale gas by acquiring Exxon Mobil Corp’s stake in a key field.