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Italy’s Eni recently signed a memorandum of understanding with Argentina’s state-owned oil and gas company YPF to join the latter’s proposed Argentina LNG export project.
Argentina LNG is a large-scale upstream and midstream integrated gas development project, designed to develop the resources of the Vaca Muerta onshore shale gas field and serve international markets through exporting in various phases up to 30 million tons per year (mtpa) of LNG by the end of the decade.
The project phase covered by the MoU relates to the development of upstream, transportation, and gas liquefaction facilities through two floating LNG units of 6 mtpa each, for a total of 12 mtpa.
During Eni’s quarterly earnings call on Thursday, Brusco said that the project will be developed in three phases, which will be run in parallel.
“We are joining YPF, who has very strong and deep country knowledge on the unconventional upstream of Vaca Muerta. They are operating this asset for decades. So they know pretty well the subsurface and all development and operation activities,” he said.
“While on our side, as Eni, we are recognized as a fast-track and low-cost project operator. And we would bring our experience and leadership, particularly on floating LNG projects,” he said.
Boosting LNG portfolio
“We are looking at this Argentina LNG project and full value chain to complement our portfolio of LNG and also to reach our strategic target of 20 million tons per annum,” he said.
“And we think that the combination of the expertise of YPF on the upstream of Vaca Muerta and the expertise of Eni on the midstream floating LNG will set this venture for success,” Brusco said.
During the call, Brusco also answered a question on how much Eni is planning to invest in the project and whether the company is also investing in upstream.
“Yes, I mean Argentina is an integrated project. So basically, we will be all along the value chain from the upstream to midstream balanced ideally. So having the same equity on both sides,” he said.
“The project, of course, is in a very early stage, but the Phase 3, the phase that we are assessing with YPF of 12 million tons per annum, will have a cost in the region of $20 billion.. I’m including all costs from upstream to the transportation to the midstream and the liquefaction,” he said.
Argentina LNG
Earlier this month, YPF CEO Marin said that YPF expects more supermajors to become equity partners in the planned Argentina LNG project following a deal with Shell.
He revealed this during YPF’s investor day in New York on April 11, providing more details on the project.
In December 2024, YPF and UK-based LNG giant Shell signed a project development agreement (PDA) for the first phase of the Argentina LNG export project.
Earlier this year, YPF also joined a floating LNG project developed by Pan American Energy, Golar LNG, and other partners.
YPF signed a participation agreement to acquire a 15 percent interest in Southern Energy, a company that is planning to develop the FLNG project in Argentina.
Under the first phase, or Argentina LNG 1, YPF will enter the international LNG market via a tolling agreement.
“And we are in the finishing time of signature during this month. This will be, if that happens, the first one, and it will start exporting in 2027. There will be two ships and six million tons,” Marin said.
The second and the third phase of the Argentina LNG project includes newbuilds.
Shell is the strategic partner in Argentina LNG 2.
Estimated Capex for this phase is $10 to $12 billion, and YPF expects to have a 30-35 percent stake in this phase.
This phase would have a capacity of 10 mtpa and two FLNGs, and the first production is expected in 2029/2030.
Moreover, the third phase of Argentina LNG would have a capacity of 12 mtpa and two FLNGs with exports expected in 2028/2029, according to a YPF presentation.
The presentation shows that FID for this phase could be taken in the fourth quarter of 2025, and YPF expects to have a 25 percent stake.
