Argentine state-owned oil company YPF and multinational energy company Eni have signed a Memorandum of Understanding (MoU) to develop the Argentina LNG project.
The project relates to the development of upstream, transportation and gas liquefaction facilities at the Vaca Muerta onshore gas field, serving international markets through two floating LNG units capable of producing 6 million tonnes per annum (mtpa) each. By the end of the decade up to 30 mtpa could be produced on the project, it is reckoned.
Eni CEO Claudio Descalzi said YPF’s choice of Eni as a strategic partner stemmed from the specific and distinctive skills and knowledge the companies have developed in FLNG projects in Congo and Mozambique.
YPF President and CEO Horacio Daniel Marín said the agreement would allow the pair 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,” he said.
The signing is in line with Eni’s strategy of promoting the energy transition, favouring the development of gas production and reducing the emissions impact, with the goal of achieving carbon neutrality by 2050.
Renewables-leaning think tank the Institute of Energy Economics and Financial Analysis (IEEFA) hasidentified several financial risks associated with the Vaca Muerta project, including high subsidies, economic instability, and infrastructure needs.
While IEEFA’s analysis of the project emphasises the significant potential for economic growth, it also flags the considerable financial, fiscal, and political risks that need to be addressed for the project to succeed.
