YPF and Shell have signed a Project Development Agreement (PDA) for the first phase of the “Argentina LNG” project. This initiative envisions a liquefaction capacity of 10 million tons per year (MTPA) and will utilize natural gas from the Vaca Muerta formation. The PDA was signed in The Hague, Netherlands, marking Shell’s official entry into the project as a partner, replacing Malaysia’s Petronas.
YPF President and CEO Horacio Marín expressed confidence in Shell’s involvement, stating:
“We are proud that Shell, a world leader in LNG production, is joining the project. As a pioneer in the LNG market, Shell’s knowledge and experience will be instrumental in helping to position Argentina as a reliable and competitive global energy supplier.”
The Transition: Petronas’ Role Comes to an End
Shell’s partnership signals the conclusion of Petronas’ involvement in the Argentina LNG project. However, YPF highlighted the significant contributions Petronas made over the last two years, particularly in sharing its technical and commercial expertise in LNG. Importantly, YPF and Petronas will continue collaborating on the development of the La Amarga Chica area in Vaca Muerta.
Project Highlights
The Argentina LNG project is part of YPF’s broader 4×4 strategic plan under Horacio Marín’s leadership. It aims to establish Argentina as a global LNG exporter. The project includes:
- Gas Production: Sourced from dedicated blocks in Vaca Muerta.
- Transportation Infrastructure: A 580 km gas pipeline to connect production sites to the terminal.
- Liquefaction Terminal: Located in Sierra Grande, Río Negro, on Argentina’s Atlantic coast.
YPF noted that the PDA commits both companies to advance the project to the Front-End Engineering and Design (FEED) stage.
Integration of AI and Starlink in Vaca Muerta
In a parallel development, YPF is leveraging artificial intelligence and Starlink satellite technology to enhance operational efficiency and productivity in Vaca Muerta. The integration of real-time analytics and high-speed connectivity is setting new standards for resource management and exploitation.
Challenges Ahead
Despite the progress, capital controls and foreign currency restrictions continue to impact oil and gas operators, limiting the ability to import critical equipment for Vaca Muerta’s development. YPF’s efforts to navigate these challenges are underpinned by growing international interest, such as Shell’s involvement in the LNG initiative.
This milestone reaffirms Argentina’s commitment to becoming a global energy player and strengthens YPF’s position as a leader in the country’s energy transformation.