Argentina's big-ticket midstream projects, upstream firms to watch in 2025

Billions of dollars in midstream and upstream investment is due to flow in Argentina in 2025, driven by midstream projects and upstream work targeting the Vaca Muerta shale play.

Investor appetites are being whetted by multiple factors, chiefly a deregulation drive led by President Javier Milei and Vaca Muerta’s vast untapped potential. 

The federal government’s Rigi investment incentives regime is another carrot being dangled in front of export-focused gas projects and oil and gas transport initiatives. 

According to estimates from Neuquén province, home to the bulk of Vaca Muerta, the outlay by incumbent players alone is forecast to reach US$10bn in 2025.

Vaca Muerta production forecast

The Argentine office of professional services firm PwC estimates that Vaca Muerta could be producing 1Mb/d oil and more than 250Mm³/d gas in 2030.

PwC said that the accumulated investment at Vaca Muerta stands at around US$200 billion. Investments started flowing around 2010.

Vaca Muerta production was 403,000b/d oil and 83Mm³/d gas in August, up 35% and 22% year-on-year, respectively.

Vaca Muerta Sur

The most advanced midstream initiative is YPF’s US$3bn Vaca Muerta Sur oil pipeline and terminal project, which may get underway by the end of the month, given the company this week said construction would start “immediately.”

Project shareholders YPF, Pampa Energía, Vista Energy and Pan American Sur (a unit of Pan American Energy) have committed to secure around 275,000b/d of capacity on the duct. Pluspetrol, Chevron Argentina and Shell Argentina have been offered around 230,000b/d.

Southern Energy LNG

Southern Energy’s floating LNG-exporting project is the most advanced in Argentina in terms of environmental permitting.

A public consultation was conducted in December, with the next phase involving the issuance of a technical ruling and a final resolution. 

The company pegs capex at US$6.9bn over the project’s 20-year contract window, with initial outlay targeting components such as overland and subsea pipelines.

Given that the 2.45Mt/y Río Negro province project is due to come online in October 2027, pre-construction or construction work could get underway by end-2025 if the permits are secured.

TGS’ private initiative gas compression project

Midstream gas player TGS presented federal authorities with a private initiative project to expand capacity of the first phase of the Vaca Muerta gas pipeline via compression.

A call for bids was due, the company said recently. TGS has first refusal and an award decision is expected by around the turn of the year, meaning work could start in 2025.

The US$500mn initiative, unveiled earlier this year, is one of two company projects designed to increase transport capacity by a total of 14Mm³/d by mid-2026, taking it to 35Mm³/d from the current 21Mm³/d.

Upstream players

The Vaca Muerta landscape has shifted recently following the sale of ExxonMobil shale and midstream assets to Pluspetrol and YPF.

Reflected in its Proyecto Andes conventional asset divestment plan, YPF is sharpening its focus on Vaca Muerta shale oil extraction.

Combined, the companies have several billion dollars of Vaca Muerta outlay planned. Others with hefty spending or growth goals announced include Tecpetrol, Pampa Energía, Shell Argentina, Vista Energy and Pan American Energy.  

Divested Proyecto Andes assets should also attract conventionals investment by players such as Pecom, Bentia Energy, Petroleos Sudamericanos and PCR.Other projects that may advance in 2025

Among other midstream initiatives to watch include YPF’s proposed LNG exporting project, also planned for Río Negro province. 

Meanwhile, gas transporter TGN has previously said it was planning a pipeline to carry the fuel to mines in the country’s northwest. 

In terms of oil, midstream concessionaire Oldelval this year announced the US$838mn pipeline project Duplicar Norte. 

The duct expands capacity between oil fields in the north of Neuquén province and the Allen pumping station further south, in Río Negro province. The first-phase work would boost capacity to 67,000m³/d, while a second phase would ramp it up to 91,000m³/d.