Oil Companies to Build $3 Billion Pipeline in Argentina

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Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--A group of energy companies will build a 550,000-barrel-per-day (BBL/d) oil pipeline, which could receive financial benefits from Argentina's new RIGI system. YPF, Pan American Energy, Vista Energy, Pampa Energia, Chevron Argentina, Plus Petrol and Shell Argentina plan to build the 437-kilometer (271-mile) Vaca Muerta Sur, connecting Argentina's shale reservoir to the coast.

The companies involved say Vaca Muerta Sur eventually could expand to 700,000 BBL/d. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Pipeline Project Database can click here for a list of detailed reports for projects related to Vaca Muerta Sur.

The pipeline will connect Vaca Muerta, the world's fourth-largest non-conventional oil reservoir, to Punta Colorada's coast, in the Rio Negro province. According to YPF, the pipeline will be connected to an oil terminal with single buoys and storage tanks, which are expected to be operational by the end of 2026.

The project will fall under the Regime for Incentive of Large Investments (RIGI), Argentina's new system which grants special benefits to companies investing large amounts in the country. The construction of Vaca Muerta Sur is expected to lead to investments of US$3 billion.

Given the increased production volumes from the shale formation in recent years, the construction of midstream capacity is key for Vaca Muerta's development.

On par with the construction of Vaca Muerta Sur, in recent years, Argentina reopened an export pipeline from Vaca Muerta to Chile. It also inaugurated sections of the Perito Moreno gas pipeline which connects Vaca Muerta to the northern Argentina provinces. All this is to find new markets for the reservoir's output.

According to the company statement, YPF, Pan American Energy, Vista Energy, and Pampa Energia, shareholders of the pipeline, will use about 275,000 BBL/d of the capacity, allowing Chevron Argentina, Plus Petrol, Shell Argentina, and others to use the remaining 230,000 BBL/d.

The construction of this asset could bring Argentina US$15 billion through oil exports.

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