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Pampa said in a statement it will initially hold a 20 percent stake in Southern Energy (SESA), the entity established by PAE and Golar to undertake the FLNG project in Argentina, becoming its second-largest shareholder.
The company did not provide financial details of the deal.
The FLNG project involves deploying Golar LNG’s floating liquefaction vessel, Hilli, in the San Matías Gulf, Río Negro province, alongside the construction of supporting infrastructure.
The vessel will have a production capacity of 2.45 million tons per year (mtpa) of LNG, equivalent to 11.5 million cubic meters or 0.4 billion cubic feet of natural gas per day.
Operations are expected to begin in the second half of 2027.
During the FLNG project’s initial stage, Pampa has committed to supplying up to 3 mcm or over 100 mcf of natural gas per day from its Neuquina basin blocks, Pampa said.
Pampa currently produces an annual average of over 13 mcm or 0.5 bcf per day, with peaks of 17 mcm or 0.6 bcf per day in winter in the basin.
With an estimated investment of $2.9 billion over the next 10 years, the FLNG project represents a strategic milestone to monetize Pampa’s Vaca Muerta reserves and position Argentina in the global LNG market, the company said.
Pampa noted that SESA has also applied for Argentina’s incentive regime for large investments (RIGI), as the FLNG project meets the criteria.
YPF
This move follows an announcement by YPF CEO Horacio Marin.
Marin said that Argentina’s state-owned oil and gas company YPF will join the FLNG project developed by Pan American Energy and Golar LNG
The CEO said YPF will join this initiative that “marks a milestone in the energy industry of our country and that represents a big step to be able to carry out our Argentina LNG project, with which we expect to export $15 billion in LNG by 2030.”
Earlier this month, Marin said that YPF is in negotiations with supermajors to become equity partners in the planned Argentina LNG project. The company also held a large number of meetings with potential offtakers.
YPF and Malaysia’s Petronas recently decided to build their $30 billion Argentina LNG export project in the Patagonian province of Río Negro.
YPF and Petronas decided that the project would be located in Sierra Grande, Río Negro instead of the initial Bahia Blanca, Buenos Aires plan.
However, it appears that YPF’s project partner, Petronas, is considering whether to continue developing Argentina LNG.
Petronas “have to decide” by the end of December if the company is continuing, Marin said.
A presentation posted on YPF’s website shows that during its first phase, Argentina LNG would have two floating liquefaction units with a production capacity of around 9 mtpa.
The following phases of the project entail the construction of an onshore modular plant which would progressively expand to achieve a final capacity up to 30 mtpa.
Hilli
Golar’s FLNG Hilli, located offshore Cameroon’s Kribi, recently offloaded its 122nd cargo of liquefied natural gas since it started operations in 2018.
In July, Golar LNG entered into definitive agreements with PAE for a 20-year deployment of this FLNG in Argentina.
The FLNG project will monetize Argentine gas, tapping into the vast resources from the Vaca Muerta shale formation in the Neuquen basin, the world’s second-largest shale gas resources.
The floating LNG player said in its third-quarter report that PAE issued a reservation notice reserving FLNG Hilli for the project in October 2024.
The project’s definitive contracts are subject to satisfying defined conditions precedent, including an export license, environmental assessment, and FID by PAE.
“Work on the conditions precedent is progressing with their satisfaction and FID is expected within Q1 2025,” Golar said.
Golar said the FLNG project will initially utilize spare capacity in Argentina’s existing pipeline network.
Work to construct a dedicated pipeline connecting the FLNG terminal location directly to the Vaca Muerta shale formation is also being pursued.
“This could support a multi-FLNG vessel project in Argentina, including opportunities for our MKII FLNG(s),” Golar said.