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YPF president and CEO Horacio Marin, and Shell’s executive VP of LNG, Cederic Cremers,
signed the deal in The Hague, Netherlands, according to a statement by YPF on Thursday.
The PDA means that Shell will join the LNG project.
YPF said the parties commit to mature the development of the first phase of the Argentina LNG project towards a decision to enter the front-end engineering and design (FEED) stage.
The first phase has a liquefaction capacity of 10 million tons per year (mtpa).
“We are proud to have Shell, with its world-leading LNG business, join the project. As a pioneer in the LNG market, Shell’s knowledge and experience will be instrumental in helping position Argentina as a reliable and competitive global energy provider,” Marin said.
Marin recently revealed that YPF was in negotiations with supermajors to become equity partners in the planned Argentina LNG project.
He said the company also held a large number of meetings with potential offtakers.
Petronas no longer part of Argentina LNG project
With Shell entering into the development of the first phase of the Argentina LNG Project, Petronas’ participation as a partner of YPF has come to an end, YPF said in the statement.
Both will continue working on the development of the La Amarga Chica area in Vaca Muerta.
“YPF acknowledges Petronas’ valuable contribution during the last two years, sharing with YPF’s teams its technical and commercial experience in the LNG market,” the company said.
The joint work has contributed to the development of the LNG project to its current stage and will allow further steps to be taken, YPF added.
YPF and Malaysia’s Petronas recently decided to build the $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.
The Sierra Grande area appears to be the best option due to the shorter length of the pipelines needed to transport shale natural gas from Vaca Muerta.
YPF said the full project would have a capacity of 30 mtpa.
In March this year, YPF launched a tender for engineering work for floating LNG units as part of its planned Argentina LNG export project.
A presentation posted on YPF’s website previously showed 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.
PAE project
Last month, Marin also announced that YPF will join a floating LNG project developed by Pan American Energy and Golar LNG.
In July, Golar LNG entered into definitive agreements with Argentina’s PAE for a 20-year deployment of FLNG Hilli, curretnly located offshore Cameroon’s Kribi, 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.
London-listed oil and gas firm Harbour Energy and Argentina’s Pampa Energia also joined this project.
Golar expects the project to start LNG exports within 2027.
