Italy's Eni Shows Interest in Joining YPF's Argentina LNG Project

Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--The chief executives of Eni SpA (NYSE:E) (Rome, Italy) and YPF (NYSE:YPF) (Buenos Aires) have signed a memorandum of understanding (MOU) to evaluate the Italian company's participation in the Argentina liquefied natural gas (LNG) project spearheaded by YPF. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project and Plant databases can click here for the project report and click here for the plant profile.

The deal between the companies relates to the development of upstream, transportation and liquefaction facilities through two floating LNG units with a capacity of 6 million tons per annum (Mtpa) each.

The Argentina LNG development contemplates the construction of an LNG export terminal in Sierra Grande, Rio Negro province to export the growing production from Vaca Muerta, the world's second-largest shale gas reservoir.

In December, Shell plc (NYSE:SHEL) (London, England) and YPF signed a deal to jointly develop the first phase of the project, which includes two floating liquefying units with a combined capacity of 10 Mtpa.

The second phase of the development considers the construction of a modular liquefaction plant of 10 Mtpa. The last phase considers an expansion of another 10 Mtpa, with new liquefaction trains to bring the Argentina LNG project's total capacity to 30 Mtpa. Subscribers can click here for the second stage project report and click here for the third stage project report.

The assets will be connected to Vaca Muerta via a new 580-kilometer (360 miles) gas pipeline, and the overall project is valued at US$50 billion. Subscribers to Industrial Info's Oil & Gas Pipelines Project Database can click here for the project report.

"We are very pleased to sign this agreement with Eni, which would allow us to accelerate the timeline for the Argentina LNG project. We see great interest worldwide, both from large production companies and from countries seeking to purchase gas from Vaca Muerta," said YPF Chief Executive Officer Horacio Marin.

The boom in natural gas and oil production from Vaca Muerta is attracting more players to the nation's hydrocarbon industry, while Argentina is increasingly being placed as a key regional and global energy player.

As an example of the international interest, in January, YPF signed a memorandum of understanding with Indian companies to export 10 Mtpa of LNG to the Asian country. For more information, see January 24, 2024, article - Argentina's YPF Signs MOU to Export LNG to India.

With the development of Argentina LNG and growing natural gas production from Vaca Muerta, YPF projects exports worth US$30 billion by 2030.

Besides the development of the Argentina LNG project, YPF also announced the construction of a 550,000 barrel-per-day (BBL/d) oil pipeline, in partnership with other energy companies, to transport Vaca Muerta's output to a new export terminal on the Atlantic coast.

The oil pipeline would reach investments of US$3 billion, and it could expand its capacity to 700,000 BBL/d. Subscribers can click here for the project report.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).