
LNG, pipelines, divestments, fertilizer outlay: Takeaways from YPF’s 2Q24 call

Argentine state-controlled hydrocarbons company YPF gave updates on two big-ticket midstream infrastructure projects, divestments and other developments.
YPF is laser-focused on spurring oil production and exports from the Vaca Muerta shale play and getting LNG production underway.
LNG PROJECT
YPF’s flagship initiative is a multibillion-dollar LNG exporting project, planned with Malaysian counterpart Petronas.
A final investment decision is expected by the end of 2025, according to a YPF presentation.
YPF, which expects to own 25-30% of LNG production, recently said fixed infrastructure would be built in Punta Colorada, Río Negro province, where exports are due to start via floating units.
New pipeline infrastructure would be needed to transport gas to Punta Colorada.
VACA MUERTA SUR
YPF’s Vaca Muerta Sur oil pipeline and export terminal project is advancing.
Around a third of the US$200mn first phase – a 130km link between Loma Campana in Neuquén province and Allen in Río Negro – is built. Associated capacity is expected to reach 350,000b/d in 1H25 and climb to 450,000b/d by the end of 2026.
Allen is also the access point to the Oldelval system, which transports Neuquén basin oil to export facilities in Buenos Aires province and is currently being expanded.
A US$2.5bn second phase of Vaca Muerta Sur, involving a 440km link connecting Allen to Punta Colorada, where a deepwater export terminal is also planned, is due to enter service in 2H26, with a capacity rate of 180,000b/d. This is expected to climb to around 500,000b/d in 2027 and about 700,000b/d from 2028, if demand is in place.
The second phase would be built under the federal government’s Rigi investment incentives regime, the call was told. Río Negro was the first jurisdiction to adhere to Rigi.
Producers are applying for a share of capacity on the future infrastructure, the call heard. Letters of intent corresponding to about two-thirds of total project transport capacity have been signed.
Commenting on timelines, Marín said: “We have not delayed one day. Our program is to mobilize the equipment in November.”
The project would be driven forward by an SPV, with stakes linked to amount contributed to the construction cost.
YPF is working on the design of the second phase and supplier contracting, and has secured environmental green lights, investors were told.
PROYECTO ANDES
Proyecto Andes is a plan to divest around 50 mature conventional blocks, a process YPF aims to conclude this half.
Officials have so far executed sales and purchase agreements for six of an initial batch of 11 clusters. These 11 corresponded to 30 blocks.
Among the latest to announce acquisitions is local group PCR, which obtained two clusters in Mendoza province.
Negotiations surrounding 20 more blocks, to be sold or reverted, are underway.
“I think we are going to sign two more [sales and purchase agreements] in the next week,” YPF CEO Horacio Marín told the company’s 2Q24 results call on Friday.
Provincial authorities need to authorize transactions.
“I think we’re in very good shape,” Marín said, referring to a company goal of completing the divestment process by the end of the year.
PRODUCTION, CAPEX, M&A, DIVESTMENTS, INVESTMENT
Production
YPF produced 249,000b/d of crude in 2Q24, up from 241,000b/d a year earlier.
The company is betting heavily on shale oil in the Vaca Muerta formation, where its core hub comprises areas Loma Campana, La Amarga Chica, Bandurria Sur and Aguada del Chañar. Of the Q2 total, 113,000b/d was shale, up from 95,000b/d.
YPF is aiming to hit a shale production rate of 120,000b/d by the end of the year. Production guidance for 2025 and beyond is due in March.
Conventional output in the quarter was 135,000b/d, down from 146,000b/d, reflecting a national downward trend.
Average price obtained for crude was US$70.8/b, up from US$63.4/b a year earlier amid an industry shift towards bringing local prices in line with international prices.
Natural gas output climbed 6% year-on-year to 38.8Mm3/d (million cubic meters), fetching US$4/MMBTU (million British thermal units), up from US$3.90/MMBTU.
On the exploration map, YPF, along with driller CGC, is also hunting for oil and gas in hydrocarbons formation Palermo Aike and evaluating a pilot well.
“I think in the coming weeks you will see the results and we are expecting that first oil, if it comes, will come in the next weeks,” Marín said.
In May, the companies completed 12 frac stages at the well – Maypa.xx-1 – in the Cañadón Deus field in Santa Cruz province.
In Q2, YPF expanded oil exports via the Otasa duct to Chile by 25% quarter-on-quarter to 29,000b/d, the equivalent of around 11% of company oil production.
Capex
Capex, chiefly targeted at upstream, was US$1.20bn, down 6% year-on-year.
M&A
Amid speculation over who will buy shale blocks being sold by ExxonMobil, Marín said the company was interested in profitable assets.
“Saying that, this is a confidential process, so I cannot give you more information on that,” he said.
Divestments, Investment
An original proposal by the government of President Javier Milei to privatize YPF was scrapped although divestments of units are being mulled.
Subsidiaries going on the block are lubricants units YPF Chile and YPF Brasil, gas station unit Refinor and natural gas distributor Metrogas.
Regarding Metrogas, Marín said that “we are going to sell but not today,” adding that the price of the company should eventually climb.
Meanwhile, fertilizer business Profertil is “very, very profitable” and YPF will look for partners to double plant size, the call heard.
“With project finance or with the new partners, we will see how to do that,” Marín said.
BOTTOM LINE, NET DEBT
YPF posted net income of US$535mn for the quarter, up 41% year-on-year, as revenue rose 13% to US$4.94bn. Net debt stood at US$$7.46bn, up 18% year-on-year.
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