Malaysia’s energy giant Petronas and Argentina’s state-owned oil and gas company YPF are joining forces to develop a large LNG export project in Argentina to liquefy natural gas from Vaca Muerta’s vast shale gas resources.
YPF and a Petronas’ unit in Argentina signed a joint study and development agreement on Thursday to work on the potential development of the Argentina integrated LNG project, Argentina GNL.
The project will include upstream gas production, dedicated pipeline and infrastructure development, LNG production, as well as marketing and shipping.
According to YPF, the first phase of the project would have a production of 5 million tonnes of LNG and would cost about $10 billion.
In the future, the capacity could rise to 25 million tonnes, YPF said.
Boosting cooperation
Besides the LNG project, Petronas and YPF signed a memorandum of understanding to pursue collaboration in Argentina in other areas, including upstream oil, petrochemicals, and clean energy solutions.
“The final investment decision for the projects will be undertaken after diligent technical and commercial assessment has been conducted, backed by conducive fiscal terms, legislation and policies,” Petronas said in a statement.
Petronas’ strategic alliance with YPF began in 2014 through its partnership in the La Amarga Chica project, Vaca Muerta, as part of its growth aspiration in the Americas.
“Petronas’ expertise in integrated LNG and unconventional plays will add value to the intent and synergy of both parties in further exploring potential LNG opportunities in Argentina, leveraging on Vaca Muerta’s vast unconventional gas resources,” Petronas CEO Tengku Muhammad Taufik said in the statement.
Worth mentioning here, YPF previously terminated a charter deal with Belgium’s Exmar for the Tango floating LNG producer. The two firms settled the dispute in 2020.
Argentina is also an LNG importer. Excelerate Energy’s 150,900-cbm FSRU Exemplar recently left the country after supplying regasified LNG during the peak winter demand.