Argentina’s YPF and Italy’s Eni have reached an agreement with the Abu Dhabi National Oil Company’s XRG investment arm for it to join a liquefied natural gas project linked to Argentina’s Vaca Muerta field, YPF said on Tuesday.
In a statement released during the Abu Dhabi International Petroleum Exhibition and Conference, YPF CEO Horacio Marin said XRG’s incorporation “strengthens a key initiative for the energy future of the country,” and will allow Argentina to turn into a “world-class” exporter of LNG.
The project is seeking financing of at least $12.5 billion, a person close to YPF told Reuters. The companies are expected to sign a technical agreement within a month, that person added. Eni and Argentine state-controlled oil company YPF signed a final engineering agreement in October to export gas from the Vaca Muerta formation, the world’s second-largest unconventional natural gas reserve.
YPF is leading the project, which involves installing floating liquefaction units at a port in the Patagonian province of Rio Negro. Gas will arrive from Vaca Muerta, in the province of Neuquen, via a pipeline.
Argentina, which is seeking to increase its foreign exchange reserves, could earn at least $10 billion annually if it exports 12 million tons of LNG a year, YPF said on Tuesday afternoon. Exports of LNG are expected to start by mid-2030.
As part of the project, YPF expects to export 50 million cubic meters of natural gas per day, 100,000 barrels of oil and 150,000 barrels of liquefied petroleum gas.
