YPF and Indian trio shake hands on LNG export from Argentina’s future plant

Argentina’s oil and gas firm YPF has signed a memorandum of understanding (MOU) with three Indian companies, India’s Oil and Natural Gas Corporation (ONGC), Gas Authority of India Limited (GAIL), and ONGC Videsh, to export liquefied natural gas (LNG) from its proposed project in the Sierra Grande Norte, on the South American country’s Atlantic coast.

The Argentinian player aims to export up to 10 million tons per annum (mtpa) of LNG to the Indian trio. Additionally, the agreement includes cooperation on lithium and other critical minerals, as well as the exploration and production of hydrocarbons. 

“It is a great satisfaction to advance with India in this agreement to potentially supply them with gas. We are convinced that the country has an opportunity to become an energy exporter and achieve the industry-wide goal of generating $30 billion in revenue over the next 10 years,” said YPF’s President, Horacio Marín.

The signing ceremony in New Delhi was attended by India’s Minister of Petroleum and Natural Gas, Hardeep Sinh Puri; Secretary of Petroleum and Gas, Pankaj Jain; ONGC’s Executive Director of Business Development, Ranjan Goswami; GAIL’s Executive Director of LNG, Satyabarata Bairagi; ONGC Videsh’s Vice President of Business Development, Swati Sathe; and YPF’s President and CEO, Horacio Marín.

The signing of the MOU concluded the YPF’s President’s tour through Israel, Korea, and Japan to generate interest and open these markets to gas produced from the Vaca Muerta field. Located in the Neuquina (Neuquén) Basin, YPF says this is the world’s second-largest shale gas field, containing 308 trillion cubic feet (Tcf) of gas resources. 

Intending to become an LNG exporter, the Argentinian firm is developing Argentina LNG (ARG LNG), an integrated liquefaction project that will exploit the “vast” resources of Vaca Muerta. The natural gas is set to be transported through dedicated 580-kilometer pipelines to the LNG plant to be located in the Sierra Grande Norte, Rio Negro Province, on Argentina’s Atlantic coast. 

Phase 1 of the project will include two floating liquefaction units located near the shore, each with a capacity of 5 mtpa. Next, Phase 2 envisages the construction of a 10-mtpa onshore modular liquefaction plant, which is set to be expanded by adding two trains as part of Phase 3. The final capacity is expected to reach up to 30 mtpa.

As part of the preparation for the project, YPF purchased ExxonMobil Argentina and Qatar Energy‘s stakes in the Sierra Chata unconventional concession in December 2024. As disclosed by Pérez Alati, Grondona, Benites & Arntsen (PAGBAM), which advised YPF on the acquisition, ExxonMobil held a 70% and Qatar Energy 30% stake over Sierra Chata.

According to YPF, it now holds an approximate 54% stake in the block in partnership with operator Pampa Energía. Located 150 kilometers northwest of the city of Neuquén, Sierra Chata is said to be one of Vaca Muerta’s most prospective gas assets.

Furthermore, the Argentinian firm announced the signing of a project development agreement (PDA) with Shell for the first phase of the Argentina LNG Project on December 19, 2024. YPF President and CEO Horacio Marin and Shell’s Executive Vice President of LNG, Cederic Cremers, signed the PDA in The Hague, Netherlands. 

The partners committed to mature the development of the first phase of the Argentina LNG project towards a decision to enter the front-end engineering and design (FEED) stage. 

“We are proud to have Shell, with its world leading LNG business, join the project. As a pioneer in the LNG market, Shell’s knowledge and experience will be instrumental in helping position Argentina as a reliable and competitive global energy provider,” noted YPF President.

With Shell joining the first phase of the LNG project, YPF disclosed that Petronas’ participation had come to an end. The firm acknowledged Petronas’ contribution during the last two years, noting that the joint work contributed to the development of the project to its current stage.

Another step towards developing the Argentina LNG project was YPF getting on board the floating liquefied natural gas (FLNG) project being co-developed by Golar LNG and Pan American Energy (PAE) in Argentinian waters. The $3 billion project will see the FLNG Hilli, set to be installed in the San Matías Gulf, off the coast of Argentina’s Río Negro province, export gas from Vaca Muerta.