Argentina’s Rigi energy project pipeline grows, rules tweaked

Southern Energy has become the latest sector firm in Argentina to confirm plans to tap the government’s Rigi investment incentives regime for large-scale projects.

Southern Energy wants to export LNG from a vessel offshore Río Negro province, an initiative that would require US$2.90bn in investment in 2025-35, local press reported.

The company, owned by British-Chinese-Argentine hydrocarbons producer Pan American Energy (PAE) and London-based LNG logistics firm Golar, would moor a floating production vessel off the coast of the southern province, which has adhered to the Rigi regime.

The initiative involves initially producing when domestic demand for natural gas slackens, typically over the warmer months of the year. However, talks are underway to permit constant production, state-controlled oil firm YPF said in recent days.

The platform is expected to be linked to the San Martín duct, which transports output from Tierra del Fuego, Chubut and Santa Cruz province onshore and offshore gas assets to the north. A stretch of the pipeline runs just some 25km from the coast of Río Negro. In terms of gas, the San Martín duct has around 14Mm3/d idle capacity, according to a 2022 annual report from regulator Enargas.

Other energy projects eyeing Rigi benefits are the following, while others may be still under wraps.

• YPF Luz’s US$200mn Mendoza province solar PV project El Quemado
• YPF’s US$2.5bn Vaca Muerta Sur oil pipeline and terminal
• YPF’s LNG Argentina LNG-exporting project
• TGS’s US$5bn Vaca Muerta gas pipeline capacity-expansion project

The government recently published Rigi implementation rules. Rigi establishes a series of tax and exchange rate benefits and stable rules of the game for 30 years.

Associated project outlay minimums start at US$200mn, rising to US$600mn for some oil and gas projects and US$2bn for long-term export initiatives deemed strategic.

Rigi rules tweak

Argentina’s government, via a decree, tweaked rules governing the Rigi regime.

With the change, projects to expand existing initiatives can obtain Rigi benefits.

The decree establishes what conditions expansion projects must meet.

More information can be obtained here.