Two energy players have joined a floating liquefied natural gas (FLNG) project being co-developed by Southern Energy S.A. (SESA), a joint venture (JV) formed by Golar LNG, a Bermuda-headquartered owner and operator of liquefied natural gas (LNG) midstream infrastructure, and Latin American integrated energy company Pan American Energy (PAE), offshore Argentina.
The first newcomer is Argentina’s energy firm Pampa Energía , which acquired a 20% stake in SESA, thus becoming its second-largest shareholder. Another compatriot company, YPF , joined the FLNG project last week .
The project entails installing Golar LNG’s FLNG vessel, Hilli Episeyo , in the San Matías Gulf , Argentina’s Río Negro province, to export gas from the Vaca Muerta shale deposit in the Neuquén (Neuquina) Basin , and building supporting infrastructure.
With an estimated investment of $2.9 billion over the next 10 years, the development is expected to position the South American country in the global LNG market. Since it meets the criteria to qualify as a long-term strategic export project, it has been submitted to the Argentinian incentive regime for large investments (RIGI).
FLNG Hilli Episeyo will have a production capacity of 2.45 million tons per year (mtpa) of LNG, equivalent to 11.5 million cubic meters (mcm) or 0.4 billion cubic feet (bcf) of natural gas per day. A final investment decision for the project is expected to be reached in 2025, with operations to follow suit in the second half of 2027.
Pampa committed to supplying up to 3 mcm or over 100 mcf of natural gas per day from its Neuquina Basin blocks during the FLNG project’s initial stage, noting that 22.2% of the gas volumes would come from its El Mangrullo and Sierra Chata fields. The firm claims its Neuquina assets currently produce an annual average of over 13 mcm or 0.5 bcf per day, with peaks of 17 mcm or 0.6 bcf per day in winter.
The second player to come on board is the London-listed oil and gas company Harbour Energy, which confirmed signing an agreement to acquire a 15% interest in SESA. Harbour says its participation offers an “opportunity to work with its partners to continue to mature the proposed FLNG project towards a final investment decision and to unlock the full potential of its Vaca Muerta acreage.”
In July 2024, Golar and PAE entered into definitive agreements to deploy FLNG Hilli Episeyo for 20 years, with the latter issuing a reservation notice for the vessel in October 2024. The project will tap into Vaca Muerta, which is described as the world’s second-largest shale gas formation.