YPF advances Argentina LNG, pipeline projects
YPF SA and Shell PLC last week agreed to develop the 10-million tonne/year (tpy) first phase of Argentina LNG, to be built in Sierra Grande, Rio Negro province, on the country’s Atlantic coast. The agreement committed the two companies to pursuing Phase 1 development of the plant towards front-end engineering and design (FEED).
Shell is replacing Petronas as a partner in Argentina LNG, but YPF and Petronas will continue to jointly develop the La Amarga Chica portion of Vaca Muerta shale. In announcing the Shell agreement, YPF acknowledged “Petronas’ valuable contribution during the last 2 years,” the joint work having brought Argentina LNG to the stage at which the pairing with Shell could occur. La Amarga Chica has estimated 2P reserves of 4.6 billion cu m of natural gas and 350 million bbl of oil.
Argentina LNG includes gas production from dedicated blocks in Vaca Muerta and its transportation through 580 km of dedicated pipelines. YPF also last week bought 100% of the company that owns ExxonMobil Argentina and Qatar Energy's stake in Vaca Muerta’s Sierra Chata unconventional concession, giving it a 54% stake in the block in partnership with Pampa Energía SA, the current operator.
Sierra Chata is 150 km northwest of the city of Neuquén and has a surface area of 864 sq km. It is one of the most prospective gas assets in Vaca Muerta, with estimated 2P reserves of 13 billion cu m natural gas.
Argentina oil infrastructure
YPF has also been active in developing Argentina’s crude oil infrastructure. It, Pan American Energy SL, Vista Energy SAB de CV, Pampa Energía, Chevron Argentina SRL, Pluspetrol Resources Corp. BV, and Shell Argentina SA joined forces as Vaca Muerta Oil Sur (VMOS) to build the 437-km, 30-in. OD Vaca Muerta Sur crude pipeline, running from Neuquén basin oil fields to the Atlantic coast. The 550,000-b/d pipeline will include a loading and unloading terminal with interconnected monobuoys and a tank and storage yard near Punta Colorada, Río Negro. Its capacity can be expanded to 700,000 b/d as needed.
VMOS shareholders (initially YPF, Pan American, Vista, and Pampa) have committed about 275,000 b/d of capacity (120,000 b/d, YPF; 55,000 b/d, Pan American; 50,000 b/d, Vista; 50,000 b/d, Pampa), and VMOS has granted options to Chevron Argentina, Pluspetrol and Shell Argentina, among others, to commit up an additional 230,000 b/d. These three operators are also expected to join VMOS.
Punta Colorado’s deepwater monobuoy system will allow direct loading of tankers up to 300,000 dwt (very large crude carriers hauling roughly 2 million bbl). The terminal will also have 2 million bbl of on site storage, complete with heating and insulation to maintain crude quality.
Construction began in 2024, with YPF building the first section from Tratayén to the Allen pumping station, as part of its Oldelval system. Following now-attained approval under Argentina’s large-scale investment regime (RIGI), the pipeline is expected to enter service fourth-quarter 2026, with commercial operations slated to begin July 31, 2027.
Work will use horizontal directional drilling and the pump stations high-efficiency electrical motors, to minimize environmental impacts.
According to YPF, the pipeline was the first project to be submitted for RIGI benefits. Vaca Muerta Sur will be financed partly by the current shareholders, who have together committed $3 billion to getting it built, and partly by local and international financing to be granted to VMOS in 2025. YPF estimates that the pipeline, “together with other initiatives,” will enable an extra $15 billion in annual income for the country, growing to as much as $20 billion/year if expanded.
Christopher E. Smith | Editor in Chief
Christopher brings 27 years of experience in a variety of oil and gas industry analysis and reporting roles to his work as Editor-in-Chief, specializing for the last 15 of them in midstream and transportation sectors.
Camilo Ciruzzi | South America Correspondent
Ciruzzi is a journalist based in the Argentine province of Río Negro. He has over 30 years of experience in radio and print media. Ciruzzi studied Communication Sciences at the University of Buenos Aires and specialized in energy, political economy, and finance.
