Argentina Issues Force Majeure on LNG FPSO

Argentina's YPF has issued a force majeure notice to Exmar, the Belgian operator of the Tango LNG vessel said late June 25. It said the notice was not lawful and was considering how best to defend its interests.

"YPF claims that effects of the coronavirus (Covid-19) pandemic both worldwide and in Argentina have hindered YPF’s ability to perform its obligations under the agreements, including but not limited to its ability to pay the invoices due for services performed for the period starting the second half of March 2020," Exmar said.

The threatened non-payment will hit Exmar hard: its first quarter results showed that the Tango floating LNG terminal contributed 36% of its total pre-tax profits (Ebitda) for the period. It loaded its first commercial cargo last November.

"Irrespective of the outcome of the dispute with YPF in respect of the notice, Exmar is contemplating several measures to safeguard its liquidity position, which is on the basis of our current forecast, not at risk till the end of 2020," it said.