Given the expectations surrounding the role of gas in the future energy mix, Italy’s energy giant Eni and Argentina’s oil and gas firm YPF have come up with a roadmap to pave the way for a final investment decision (FID) to be taken for a phase of a proposed liquefied natural gas (LNG) project in the Sierra Grande Norte, on the South American country’s Atlantic coast.
Following a memorandum of understanding (MoU) to evaluate Eni’s participation in the Argentina LNG (ARGLNG) large-scale upstream and midstream integrated gas development project promoted by YPF, an agreement has now been signed for the project during the meeting between Javier Milei , President of the Republic of Argentina, and Giorgia Meloni , Prime Minister of Italy.
This deal outlines the necessary steps to reach the final investment decision for the phase of the project that covers the production, treatment, transportation, and liquefaction installations of gas through floating units, with a total capacity of 12 million tons of LNG per year (mtpa).
The LNG undertaking is designed to develop the resources of the Vaca Muerta onshore gas field and serve international markets by exporting in various phases up to 30 mtpa by 2030.
Eni explained that it was selected as a strategic partner for Argentina LNG due to its know-how developed during its floating LNG (FLNG) projects in Congo and Mozambique, alongside its construction of projects with similar technological requirements.
The two players ’ new agreement is said to represent a further strategic step forward toward the maturation of the ARGLNG project, in line with the Italian firm’s strategy to promote the energy transition through the development of gas production and achieve carbon neutrality by 2050, whilst enabling the security and competitiveness of global energy supplies.
As the gas from the project will be transported through 580-kilometer pipelines to the LNG plant in the Sierra Grande Norte, Rio Negro Province, Phase 1 entails two FLNG units near the shore. While Phase 2 envisions the construction of a 10 mtpa onshore modular liquefaction plant, this is expected to be enlarged with two trains as part of Phase 3 to reach up to 30 mtpa.
The $50 billion project is being developed by a 50:50 joint venture between YPF and Shell. Recently, a memorandum of understanding regarding LNG export was penned by YPF with three Indian firms: Oil and Natural Gas Corporation (ONGC), Gas Authority of India Limited (GAIL), and ONGC Videsh.
The recent batch of MoUs was followed by two jobs, estimated to be worth $13.7 billion, which Golar LNG won for Argentina’s proposed LNG project.