Argentina
News

Argentina revives LNG project with gas-starved Europe as export target

Bnamericas

Argentine authorities have decided to revive the project to build a large-scale natural gas liquefaction facility in the Atlantic coast and is targeting its export potential towards a gas-starved Europe.

During a meeting between President Alberto Fernández and Spanish Prime minister Pedro Sánchez, they both highlighted Argentina's export potential as a food and energy producer. 

Argentine foreign minister Santiago Caffiero said the new Néstor Kirchner pipeline, which is being tendered by state-owned energy firm Ieasa, would open up the country's export possibilities by connecting the Vaca Muerta unconventional formation with the port town of Bahía Blanca, where the LNG liquefaction project would be built.

"This [project] will give Argentina energy self-sufficiency," Cafiero said, allowing the country to become "a net exporter of liquefied natural gas." Argentina is far from being so today, having to import LNG and Bolivian gas via pipeline every winter.

The LNG plan, which was widely discussed in 2019 as a US$5bn project targeting Asian markets and quickly shelved due to the country’s economic crisis, has resurfaced as a US$10bn project mainly aimed at European nations facing a supply shock due to the Russian invasion of Ukraine.

The project could total yearly sales of US$15bn according to the government's estimates and would start operations partially in 2026. It would be led by national oil company YPF in partnership with private oil and gas producers. Argentine authorities have held a series of meetings with private oil firms and discussed the possibility of a new, more market-friendly hydrocarbons reform after the government's previous proposal failed to draw attention in congress, according to local business daily Ámbito.

Today, foreign currency and transport restrictions are widely seen as the two main issues holding down the country’s hydrocarbons industry. Vaca Muerta itself is seen as a Permian-level asset in terms of its natural gas potential, but investment has failed to materialize at the necessary scale. The new law would allow the industry privileged access to central bank dollars when a firm commits to an investment above US$50mn, although similar measures have proved politically non-viable in the past.

Last September, finance minister Martín Guzmán and Fernández presented a major hydrocarbons reform proposal that would, among several, changes, allow private firms to skip some currency restrictions in a bid to spur industry growth. The bill did not move forward as it failed to garner significant support in congress, in the oil industry and among provincial authorities worried about dwindling oil revenues.

Subscribe to the leading business intelligence platform in Latin America with different tools for Providers, Contractors, Operators, Government, Legal, Financial and Insurance industries.

Subscribe to Latin America’s most trusted business intelligence platform.

Other projects

Get key information on thousands of projects in Latin America, from current stage, to capex, related companies, key contacts and more.

  • Project: Groete
  • Current stage: Blurred
  • Updated: 1 minute from now
  • Project: La Curva
  • Current stage: Blurred
  • Updated: 4 minutes ago

Other companies

Get key information on thousands of companies in Latin America, from projects, to contacts, shareholders, related news and more.

  • Company: Proquiel Químicos SpA  (Proquiel Químicos)
  • The description contained in this profile was extracted directly from an official source and has not been edited or modified by BNamericas researchers, but may have been machine...