This story requires a subscription
This includes a single user license.
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.
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.
The project would have a capacity of 30 million tons per year.
Petronas to decide by end of this year
Marin provided an update on the project during YPF’s third-quarter earnings call on November 8 following the company’s recent “roadshow” in Asia and Europe.
It appears that YPF’s partner in the project, Petronas, is considering whether it would continue to develop Argentina LNG.
Petronas “have to decide” by the end of December if the company is continuing, Marin said.
“But because our job is to maximize the shareholder value, we are continuing to discuss with supermajors to enter” the project as equity partners, he said.
“I cannot tell the names of the companies because it’s confidential,” he said.
Several reports previously said that LNG giant Shell is one of the companies interested in Argentina LNG. However, Shell did not confirm this.
“We are going to declare that when we have this final document signed,” Marin said.
India, Europe
Regarding offtakers, Marin said that YPF visited India and Europe.
“And really, I’m very, very positive because we have a lot of NDAs signed. I think it’s 14 so far MoUs with different companies,” he said.
Besides India, YPF visited Hungary, Italy, and Germany.
“And also, we went to London and (met) there (with) several companies,” he said.
“In all the meetings, it was positive,” Marin said.
“That doesn’t mean that we signed a contract,” he said, adding that YPF plans to start the negotiations “as soon as possible.”
Floating LNG
In March this year, YPF launched a tender for engineering work for floating LNG units as part of its planned Argentina LNG export project.
YPF and a Petronas’ unit in Argentina signed a joint study and development agreement on September 1, 2022 to work on the potential development of the Argentina integrated LNG project, Argentina GNL, to liquefy natural gas from Vaca Muerta’s vast shale gas resources.
Earlier this year, Marin said during YPF’s 2023 earnings presentation that the company expects to take a final investment decision on the first phase of the planned Argentina LNG export project in 2025.
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.