YPF Presses Gas on LNG Projects

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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

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Summary

YPF President Horacio Marin prioritizes Argentina LNG's development and expects an FID by year-end.

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Big Decisions

YPF's President and CEO Horacio Marin said during the Gastech conference in Bangkok that the company is advancing on the development of its Argentina LNG project, with a final investment decision (FID) expected by the end of the year.

"Argentina LNG is currently the most important project for me and the company. We are working intensively on financing with export credit agencies (ECAs) and commercial banks. We will sign the FID in Buenos Aires towards the end of the year, and in February of next year, we will move forward with the initial works and project execution," said Marin.

The project is in partnership between YPF, Eni and XRG, ADNOC's international investment company.

Argentina LNG is expected to have an initial capacity of 12 million tonnes of LNG per annum (MTPA), with the possibility to expand the project to 18 MTPA. The project contemplates the construction of a dedicated gas pipeline, processing facilities and floating liquefaction units.

More importantly, according to a report from Bloomberg, YPF is close to signing the first LNG export contracts for the Argentina LNG project, with Marin saying the company expects to sign two to three contracts of between 0.5 MTPA and 1.5 MTPA.

Projects like Argentina LNG gain further global commercial relevance amid geopolitical tensions and energy supply disruptions in the Strait of Hormuz and the Red Sea. One example is the March attacks on QatarEnergy's Ras Laffan LNG facilities, which knocked out around 12.8 MTPA of the company's export capacity. QatarEnergy said the damaged facilities would take between three to five years to be repaired.

Argentina LNG would represent another significant source of LNG for international markets and allow the South American country to export its growing gas volumes from the Vaca Muerta shale reservoir, which accounts for roughly 60% of the nation's gas production.

Beyond Argentina LNG

YPF is not the only company advancing on LNG projects in Argentina. A consortium led by Pan American Energy is also developing the Southern Energy SA Project (SESA), which includes two FLNG facilities with a combined export capacity of 6 MTPA.

Key Takeaways

• YPF expects an FID on Argentina LNG by the end of 2026.
• Bloomberg reports that YPF is close to signing two to three LNG export contracts.
• IIR is tracking US$15 billion in YPF investments in Argentina.

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