Argentina’s state-owned company YFP and energy giant Shell have signed a $50 billion project development agreement. The scope of the agreement entails implementing an LNG facility in Argentina. Attributed as the nation’s premier LNG project, the $50b Argentina LNG initiative focuses on the liquefaction of gas for international export. Moreover, it entails extracting gas from specific blocks in Vaca Muerta and transporting it through specific pipelines. The pipelines are expected to stretch 580 kilometers from a processing and liquefaction facility. The facility is set to be constructed in Sierra Grande, Rio Negro, along the Atlantic coast. Formalized in the Netherlands, the partnership marks Shell’s involvement in the project’s initial phase. It also entails targeting annual production of 10 million tonnes annually.
The Scope of Implementation Regarding Argentina’s LNG Project
Both Shell and YFP are anticipated to collaborate to ensure the implementation of Argentina’s LNG project. The collaboration from both companies is expected to move the project to the front-end engineering design stage. “We are proud that Shell, a world leader in LNG production, is joining the project. As a pioneer in the LNG market, Shell’s knowledge and experience will be instrumental in helping to position Argentina as a reliable and competitive global energy supplier.” The agreement also marks the conclusion of Malaysia-based oil company Petronas in the significant LNG project. However, Petronas will still be involved in other endeavors and will collaborate with YFP in developing the La Amarga Chica area. Located within Vaca Muerta, it is recognized as the world’s second-largest unconventional gas reserve. Moreover, it is the fourth-largest oil reserve in the world.
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Shell as a Game Changer in the Multibillion-Dollar Project
Honed with years of experience and expertise, Shell brings a new point of perspective on Argentina’s LNG project. The company noted that the LNG project is aligned with its plans to continue growing its LNG business. YFP also shows commitment in placing Argentina on the LNG market and energy production. Recently, it sanctioned the construction of a new pipeline in partnership with Pan American Energy, Vista Energy and Pampa Energy. This ambitious endeavor aims to support exports from the Vaca Muerta Sur region. The $3 billion Vaca Muerta Sur pipeline will include a loading/unloading terminal. Furthermore, it will include monobuoys and storage facilitates and expected to commence operation in Q4 of 2026. Handling 550,000 barrels per day at the start of operation, it has the potential to scale up to 700,000 bpd.
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