Italy’s energy giant Eni has set the wheels in motion to expand its upstream portfolio with three blocks in Argentina, connected to a liquefied natural gas (LNG) export project planned for development in the South American country.
Eni has signed a sale and purchase agreement (SPA) for the acquisition of a 32% interest in three upstream blocks, including Meseta Buena Esperanza , Aguada Villanueva , and Las Tacanas , which are part of the unconventional Vaca Muerta basin in Argentina.
Mohamed Al Aryani , President of International Gas at XRG, underlined: “Argentina has the potential to play an increasingly important role in meeting the world’s growing demand for natural gas, and projects such as Argentina LNG will be important to unlocking that opportunity.
“Vaca Muerta is one of the world’s most attractive gas resources, and this proposed transaction gives XRG a direct role in helping advance a project with the scale, quality and long-term potential to become a significant new source of reliable LNG supply for global markets.”
The three blocks will be part of the Argentina LNG integrated development, an upstream-midstream project aimed at leveraging the Vaca Muerta gas resources, helping to strengthen the country’s position as a global LNG supplier in the long term.
Guido Brusco , Eni’s Chief Operating Officer Global Natural Resources, commented: “Our entry into Vaca Muerta unconventional basin, alongside YPF and XRG, strengthens Eni’s ability to develop world-scale gas resources and convert them into competitive LNG for international markets.
“Vaca Muerta is one of the world’s richest unconventional basins in terms of resources: our participation positions us across the entire value chain, from Argentine upstream to the supply of LNG to international customers, creating value while contributing to global energy security.”
These assets’ resources will feed the 12 million tons per annum (mtpa) of LNG capacity via two floating LNG (FLNG) units of 6 mtpa each. The transaction of the acquisition, subject to approval by the relevant authorities, will enable participation in the three upstream blocks to be held by YPF (36%), Eni (32%), and XRG (32%).
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Al Aryani emphasized: “We are also pleased to be partnering with YPF, a highly capable and strategic partner with deep expertise in Argentina’s energy sector and a leading role in developing Vaca Muerta, and with Eni a leading developer of Floating LNG projects.”
This transaction, which is perceived to represent a further significant step toward the maturation of the Argentina LNG project, is in line with Eni’s strategy to strengthen and diversify its upstream gas portfolio, develop integrated projects along the value chain, and expand the marketing of LNG equity, while contributing to the security and competitiveness of energy supplies.
Horacio Marín , Chairman and CEO of YPF, noted: “We are taking another step forward in the development of Argentina LNG. The entry of Eni and XRG into the upstream segment strengthens the project’s value chain and allows us to move toward its development on a global scale.”