Argentina LNG, the liquefied natural gas project backed by YPF, Eni and Abu Dhabi-based XRG, has applied for inclusion in Argentina’s Large Investment Incentive Regime, or RIGI, as the partners work toward a final investment decision by the end of 2026.
The proposed integrated development would connect natural gas production from Argentina’s Vaca Muerta shale formation with processing, transportation and LNG export infrastructure. The project calls for two floating LNG vessels offshore Río Negro province with combined liquefaction capacity of 12 million tonnes per year.
YPF said in a separate project announcement that total spending over the life of Argentina LNG could reach $51 billion, making it the largest project submitted under the RIGI framework to date. The company expects the two floating LNG units to begin operations around 2031.
RIGI was established to encourage large-scale investments in Argentina by providing qualifying projects with long-term fiscal, customs and foreign-exchange benefits and greater regulatory stability. For Argentina LNG, securing those terms would help underpin the financing of a capital-intensive project intended largely for export markets.
The application follows several steps by the partners to deepen their involvement in the project. YPF, Eni and XRG signed a binding joint development agreement in February to advance engineering, commercial and financing work for the 12-million-tonne-per-year development.
In June, Eni and XRG also agreed to acquire stakes in the upstream company holding gas acreage dedicated to Argentina LNG. Under that arrangement, Eni and XRG would each hold 32% and YPF would retain 36%, subject to required approvals. The acreage includes the Meseta Buena Esperanza I and II, Aguada Villanueva Norte and Las Tacanas I and II blocks in Vaca Muerta.
The project is part of Argentina’s broader push to convert Vaca Muerta’s large unconventional gas resources into sustained LNG exports. If developed as planned, it would add a new source of LNG supply from South America at a time when producers in the United States, Qatar and other markets are also expanding liquefaction capacity.
By Charles Kennedy for Oilprice.com
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