Eni and YPF pooling resources to speed up LNG project amid global gas rush

With the demand for gas on the rise, Italy’s energy giant Eni has made a move to join forces with Argentina’s oil and gas firm YPF to work on jointly evaluating a phase of a proposed liquefied natural gas (LNG) project in the Sierra Grande Norte, on the South American country’s Atlantic coast.

The CEOs of the two companies have signed a memorandum of understanding (MoU) to evaluate Eni’s participation in the Argentina LNG large-scale upstream and midstream integrated gas development project promoted by YPF.

This project is designed to develop the resources of the Vaca Muerta onshore gas field and serve international markets by exporting, in various phases, up to 30 million tons per year (mtpa) of LNG by the end of the decade.

Claudio Descalzi, Eni’s CEO, highlighted: “YPF’s choice of Eni as a strategic partner stems from the specific and distinctive know-how we have developed in FLNG projects in Congo and Mozambique, and from the recognition of our global leadership in implementing projects with this technology.”

The MoU between the duo covers the project phase related to the development of upstream, transportation, and gas liquefaction facilities for two floating LNG (FLNG) units of 6 mtpa each, for a total of 12 mtpa.

Horacio Daniel Marín, YPF’s President and CEO, underlined: “We are very pleased to sign this agreement with Eni, which would allow us to accelerate the timeline for the Argentina LNG project. We see great interest worldwide, both from large production companies and from countries seeking to purchase gas from Vaca Muerta.”

The natural gas from the project is set to be transported through 580-kilometer pipelines to the LNG plant in the Sierra Grande Norte, Rio Negro Province. While Phase 1 entails two FLNG units near the shore, Phase 2 envisions the construction of a 10 mtpa onshore modular liquefaction plant, anticipated to be enlarged with two trains as part of Phase 3 to reach up to 30 mtpa.

In partnership with the operator, Pampa Energía, YPF holds a 54% stake in the Sierra Chata unconventional concession, which is situated 150 kilometers northwest of Neuquén and described as one of Vaca Muerta’s most prospective gas assets.

The MoU with Eni follows the memorandum of understanding related to LNG export, which YPF inked with three Indian players: Oil and Natural Gas Corporation (ONGC), Gas Authority of India Limited (GAIL), and ONGC Videsh.

According to Eni, the MoU with YPF aligns with its strategy of promoting the energy transition, favoring the development of gas production, and reducing the emission impact to achieve carbon neutrality by 2050, contributing to security and competitiveness in energy supplies.

Eni is busy with multiple LNG projects, including the one in Mozambique, where the firm recently achieved the 100th LNG cargo from its FLNG in the African country and secured the Council of Ministers’ approval for its Coral Norte/North FLNG project.