Shell Pulls Out of YPF's Argentina LNG Project a Year After Joining

Written by Amir Richani for Industrial Info Resources (Sugar Land Texas)

---

Summary

Shell leaves YPF's Argentina LNG 2 project, which could have added up to 10 MTPA of LNG production. La Nación suggests YPF could be talking to Saudi Aramco and ExxonMobil about joining.

---

Shell (London, England) has exited the Argentina LNG 2 project led by YPF (Buenos Aires, Argentina) only one year after joining, according to news reports. The project would deploy two floating liquefied natural gas (FLNG) units, each with a capacity to export 5 million tons per annum (MTPA), and the construction of a 600-kilometer natural gas pipeline to transport Vaca Muerta's production to Punta Colorada. Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Production Project Database can learn more by viewing the related project reports.

According to Argentine newspaper La Nacion Shell told the publication that it "has decided not to proceed with the initial phase of the Argentine LNG project. Initially, Shell only participated in the pre-FEED (pre-feed engineering design) phase. We continue to view Argentina as a potentially attractive growth market for LNG exports. Therefore, Shell continues to explore expansion options with YPF for Argentine LNG."

Shell had taken Petronas' (Kuala Lumpur, Malaysia) place on the project before its recent exit. According to La Nacion, companies such as Saudi Aramco (Dhahran, Saudi Arabia) and Exxon Mobil Corporation (Spring, Texas) could be among those interested in joining the project to fill the vacancy.

Shell and YPF are still partners in the Vaca Muerta Oil Sur project (see project reports), a roughly 600-kilometer pipeline under construction with an initial capacity to transport 180,000 barrels per day (BBL/d) of oil starting in 2026, with a further expansion to 550,000 BBL/d by 2027.

Argentina LNG Beyond Shell

In parallel, YPF is also working on Argentina LNG 3 (see project reports), a project aimed at deploying an additional 12 MTPA of capacity across two more FLNG terminals, with the possibility of further expanding capacity to 18 MTPA. The companies expect to make a final investment decision on the project by next year.

Key Takeaways

• Shell exits YPF's Argentina LNG 2 project
• The project would have a maximum capacity of 10 MTPA.
• YPF is still moving forward with Argentina LNG 3

---

About Industrial Info Resources
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 over 200,000 current and future projects worth $17.8 trillion (USD).