YPF, Petronas pick Rio Negro for $30bn Argentina LNG project

Argentina's state-run oil and gas company YPF and its partner Malaysia’s Petronas will invest over $30bn to develop an LNG plant in the province of Rio Negro, YPF announced on July 31.

“After an extensive evaluation process carried out by our team of professionals together with Petronas, it was concluded that the most suitable location for the development of LNG Argentina is Sierra Grande, in the province of Rio Negro,” said Horacio Daniel Marin, CEO of YPF. The board of directors of YPF approved this decision unanimously after analyzing all the technical and economic information presented on the alternatives for this project.

Last year, YPF and Petronas signed an initial land lease deal with the port of Bahia Blanca in the Buenos Aires province to develop the project, which could have a capacity of up to 25mn tonnes/year. The first phase of the project would have a capacity of 5mn tonnes/year. The gas for the project will be sourced from the Vaca Muerta, Argentina’s giant shale formation.

Marin added that the project is going to be one of the "most important" private initiatives in the history of Argentina. "It is a project of more than $30bn that would transform Argentina into the fifth largest LNG producer in the world," he said.

The two companies signed a memorandum of understanding in 2022 to pursue collaboration in Argentina in an integrated LNG project and other areas, including upstream oil, petrochemicals, and clean energy solutions. 

Recently, Golar LNG entered into definitive agreements with Pan American Energy for a 20-year deployment of a floating LNG (FLNG) vessel in Argentina. The FLNG project will also tap into the resources from the Vaca Muerta shale formation in the Neuquina basin. The project is expected to start LNG exports in 2027.