Italy’s Eni and Argentina’s state-controlled energy company YPF announced on Friday that they have finalized an engineering agreement for a major liquefied natural gas(LNG)project based on Argentina’s Vaca Muerta shale formation.The signing took place during a joint presentation marking a key step forward in their cooperation on developing Argentina’s vast natural gas resources.
The two companies first signed an initial memorandum of understanding in June to collaborate on the production,processing,transportation,and liquefaction of natural gas from Vaca Muerta,one of the world’s largest shale reserves.Under the finalized agreement,the partners will move ahead with a project designed to produce and export LNG using floating liquefaction units with a total capacity of 12 million metric tons per year.
At the signing event,Eni CEO Claudio Descalzi outlined the division of responsibilities and emphasized the project’s timeline.“YPF will be responsible for the upstream,and we will be responsible for the floating liquefaction,”he said.“We need to reach the market before 2029.”Descalzi added that the initiative will enhance Argentina’s role in the global LNG market and contribute to regional energy security.
YPF CEO Horacio Marin said the project will require drilling about 800 new wells and is expected to double the company’s 2024 gas production levels.He estimated that the development will involve$25 billion in infrastructure investment and an additional$15 billion for upstream activities.Marin highlighted the project’s importance for Argentina’s long-term energy and economic growth,noting that the country has significant potential to expand natural gas exports.
The Vaca Muerta field,located in Argentina’s Neuquén Basin,is one of the most promising shale gas formations globally.Its development is central to Argentina’s strategy to increase energy self-sufficiency and establish the country as a key LNG supplier to international markets.
The planned project combines Eni’s extensive experience in LNG technology with YPF’s expertise in upstream operations.The use of floating liquefaction units(FLNG)will allow flexibility in production and export logistics,helping Argentina access global energy markets more efficiently.
Industry observers view the partnership as a significant advancement for Argentina’s energy sector,which has sought to attract foreign investment and expand natural gas exports.If completed as planned,the project could transform the nation into a regional LNG hub,supporting both domestic energy needs and international supply chains.
With the engineering agreement now finalized,both companies are expected to proceed with detailed design and financing stages.The project represents a major opportunity to strengthen Argentina’s position in the global LNG market and deepen cooperation between Eni and YPF in developing sustainable energy infrastructure.
