State oil company YPF has submitted an application for its "Argentina LNG" project to participate in President Javier Milei’s investment incentive scheme, with a planned total investment of US$51 billion.
The plan intends to develop the Vaca Muerta shale formation’s gas resources for export as liquefied natural gas (LNG).
The Argentina LNG project, backed by YPF, Italy’s Eni and United Arab Emirates energy firm XRG, is the “most important investment presented to date” under the Régimen de Incentivo para Grandes Inversiones (RIGI), YPF Chair and CEO Horacio Marín said.
“This project will transform natural gas from Vaca Muerta into LNG exports destined for international markets,” Marín said.
The project is designed to turn gas from Vaca Muerta, one of the world’s largest shale oil and gas formations, into LNG for international markets using two floating liquefaction units with a combined capacity of 12 million tonnes per annum (MTPA) off the coast of Río Negro.
The investment plan calls for US$29 billion to be invested by the project's planned start-up in 2031.
YPF expects the project to generate around US$10 billion in annual export revenues over a period of two decades, potentially making it a major source of foreign currency for Argentina.
The broader project also includes gas production in Neuquén province, transport infrastructure, processing facilities and liquid-fractionation plants needed to supply the floating LNG units.
Of the US$29 billion expected to be invested by 2031, roughly US$24 billion will go towards infrastructure, while the remaining US$5 billion will be invested in upstream development and drilling the wells needed to raise production sufficiently to supply both liquefaction units at full capacity.
“Adhering to RIGI is a crucial step to move forward with a project that will open a new chapter for Argentina as a global energy exporter,” Marín said.
Launched under Milei, RIGI offers incentives designed to attract large-scale investment in strategic sectors. The scheme is a central element of the government's efforts to draw foreign capital into Argentina and boost exports.
Vaca Muerta is a cornerstone of Milei’s economic strategy, with the government seeking to expand oil and gas production and increase energy exports as part of its efforts to strengthen Argentina’s finances.
The Argentina LNG application follows YPF’s submission in May of a separate US$25-billion project under RIGI aimed at accelerating development of the Vaca Muerta shale formation.
During the planned construction phase, the LNG project is expected to generate more than 20,000 jobs per year, according to YPF. Around 8,000 jobs per year are expected to be sustained during the project's operation and commissioning phase.
The project is also expected to generate significant business for domestic suppliers, with YPF estimating around US$15 billion in contracts for goods and services, supporting the expansion of local industry and energy-related productive capacity.
– TIMES/NA
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