YPF seeks record $51 billion investment for Argentina LNG exports

YPF has filed a request under Argentina’s large-investment incentive regime for a planned $51 billion LNG project aimed at liquefying and exporting natural gas from Vaca Muerta.

The project, known as Argentina LNG, would be developed by YPF together with Italy’s Eni and XRG, the international energy investment arm of Abu Dhabi state oil company ADNOC.

The filing under Argentina’s Régimen de Incentivos a las Grandes Inversiones, or RIGI, marks a key step for one of the flagship projects of YPF President and CEO Horacio Marín.

According to the company, Argentina LNG is the largest project submitted under the RIGI framework so far and the biggest private investment ever announced in Argentina. The proposed amount exceeds the $46.71 billion tied to the 21 projects already approved under the regime over the past year and eight months.

The final amount eligible for RIGI benefits may still be reduced during the government’s review, as authorities determine which assets qualify under the program.

Integrated gas export chain

The Argentina LNG plan covers an integrated production chain, from the development of gas-rich blocks in Neuquén to processing, transport, liquefaction and export.

The project includes dedicated gas pipelines, processing plants, units to separate natural gas liquids and port infrastructure.

The final export stage would be located off the coast of Río Negro, in the San Matías Gulf, where two floating liquefied natural gas units, known as FLNGs, are expected to operate. Together, the units would have capacity to produce 12 million tonnes of LNG per year.

Operations are scheduled to begin in 2031.

Of the $51 billion planned over the full life of the project, around $29 billion would be invested before the two floating units come online. About $24 billion of that amount would go to strategic infrastructure, including industrial complexes, pipelines, port facilities and FLNG units.

Another $5 billion would be used to develop Vaca Muerta production and drill the wells needed to fully supply the two liquefaction units.

“Joining the RIGI is a fundamental step to move forward with a project that will open a new chapter for Argentina as a global energy exporter,” Marín said. He added that the initiative would serve as a growth platform, generating jobs, technological development and opportunities for local suppliers.

Financing and investment decision

After submitting the project under RIGI, YPF and its partners must advance through other key stages, including securing financing. The structure is being developed with JPMorgan.

The companies expect to make a final investment decision by the end of the year.

During the construction phase, planned for 2026-2030, a significant share of the investment is expected to be financed through project finance. Under that model, loans are repaid mainly with the project’s future revenue and backed by long-term export contracts with international buyers with strong credit profiles.

The companies estimate that Argentina LNG could generate nearly $10 billion in annual exports over two decades. They also project purchases from domestic suppliers of around $15 billion during the project’s development.

Construction is expected to generate about 20,000 jobs per year, including direct, indirect and induced employment, with a peak of up to 40,000 workers in the third year of execution. Once operational, the project would support about 8,000 jobs per year.

YPF expands RIGI portfolio

YPF has already become one of the main players under Argentina’s RIGI framework. The first project approved under the regime was the El Quemado solar park, developed by YPF Luz in Mendoza.

Another approved project is Vaca Muerta Sur, or VMOS, a YPF-led consortium building an oil pipeline to export crude from Punta Colorada, in Río Negro.

Southern Energy, led by Pan American Energy, has also advanced a smaller LNG export project using floating liquefaction units. In addition, YPF recently submitted a separate RIGI request for the development of the Loma Campana field, involving a planned $25 billion investment.

For exporters, shipping companies and logistics operators, Argentina LNG could become one of the most important infrastructure projects in the country’s trade outlook. If completed, the project would create a large-scale LNG export platform on Argentina’s Atlantic coast and expand the role of Vaca Muerta gas in global energy markets.

Source: Clarín

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