YPF, Petrobras, and Dow inaugurate key project to boost Vaca Muerta gas processing and exports

Compañía Mega, a joint venture involving YPF, Petrobras, and Dow, has inaugurated a new fractionation train at its complex in Bahía Blanca, Argentina. This significant US$260 million project is designed to enhance the processing capacity for natural gas liquids (NGLs) associated with gas from the Vaca Muerta formation, thereby aiming to increase exports. The newly operational facility represents the initial phase of a broader investment program totaling US$650 million, slated for completion between 2023 and 2028. This investment strategy is intended to align with and support the escalating production of unconventional hydrocarbons from the Neuquén Basin. According to Mega, the new fractionation train is projected to boost the production capacity of NGLs by up to 50%, although the initial increase is expected to be around 20%. Mega plays a crucial role in the Vaca Muerta value chain, processing approximately 40% of the natural gas produced in the Neuquén Basin. The company also operates a 600-kilometer pipeline connecting Neuquén to Bahía Blanca. Through its processing, Mega extracts valuable components such as ethane, propane, butane, and natural gasoline. These products serve the petrochemical industry, the domestic cylinder gas market (garrafas), and export markets. The expansion is particularly relevant as shale gas and gas associated with oil production in Vaca Muerta contain a higher proportion of liquids than conventional gas, for which older facilities were originally designed. During the inauguration, YPF President and CEO Horacio Marín highlighted that the expansion will enable greater value capture from natural gas production. Compañía Mega CEO Tomás Córdoba described the project as a pivotal moment for the company, positioning it to support Vaca Muerta's expansion with increased capacity and efficiency, ultimately adding value to Argentina's energy production.