YPF-backed LNG project seeks incentives with $51 billion investment

Argentina LNG, a joint venture backed by YPF, Eni, and XRG, has formally requested inclusion in the Special Regime for Large Investments (RIGI) to advance its ambitious integrated natural gas production and export project. This initiative, with a projected total investment of $51 billion, stands to become the largest private investment in Argentina's history and the most significant project under the RIGI framework to date.

The project is designed to create an integrated value chain, converting the vast natural gas resources of Vaca Muerta into liquefied natural gas (LNG) for international markets. Projections indicate that the venture could generate approximately $10 billion in annual export revenue for two decades, providing a substantial boost to the country's trade balance and foreign currency inflows. The initial phase, leading up to the planned operation of two floating liquefaction units (FLNG) by 2031, is expected to see an investment of around $29 billion.

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This financing will be backed by long-term export contracts with investment-grade international buyers.

Of this initial investment, roughly $24 billion will be allocated to critical infrastructure, including industrial complexes, dedicated pipelines, port facilities, and the two FLNG units. An additional $5 billion will fund upstream development and the drilling of necessary wells to ensure sufficient production capacity for the liquefaction plants. During the construction phase, a significant portion of the funding will be secured through international project finance, a common strategy for large energy infrastructure projects, backed by long-term export contracts with investment-grade international buyers.

Horacio Marín, President and CEO of YPF, highlighted the RIGI application as a crucial step for Argentina LNG, heralding a new era for Argentina as a global energy exporter. He emphasized the project's potential to foster economic growth, create employment, drive technological development, support local suppliers, and establish an unprecedented international presence for the nation. The company stressed that the RIGI application marks a pivotal milestone, offering a stable legal, fiscal, customs, and exchange rate framework essential for the project's long-term success.

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We are talking about a growth platform that will generate employment, technological development, local suppliers, and an unprecedented international insertion for our country.