$51 billion LNG megaproject takes ‘important’ step on path to FID by year-end

A giant multibillion-dollar liquefied natural gas (LNG) export project in South America is laying the groundwork for a final investment decision (FID) by the end of 2026, with the submission of its application to join Argentina’s Large Investment Incentive Regime (RIGI), bringing the country closer to unlocking one of the world’s largest new gas export developments and transforming its vast Vaca Muerta resources into a major source of LNG supply.

The Argentina LNG integrated liquefied natural gas project promoted by YPF, Eni, and ADNOC’s XRG has submitted its application to join Argentina’s Large Investment Incentive Regime, supporting the development of a large-scale LNG export project with a total investment of $51 billion throughout the life of the project, leveraging the resources of the Vaca Muerta formation. 

Eni, which sees the submission of the RIGI application as “an important milestone” toward the project’s final investment decision, targeted by the end of 2026, emphasized: “The Argentina LNG project combines the complementary capabilities of YPF, Eni and XRG to unlock the world-class gas resources of Vaca Muerta and contribute to the development of a competitive LNG export platform capable of supplying international markets.”

The project aims to develop an integrated LNG value chain, from upstream gas production to export infrastructure, including gas transportation and processing facilities and two floating LNG (FLNG) units, with a combined liquefaction capacity of 12 million tonnes per year (mtpa), to be located offshore Río Negro province.

Hernán Franchina, LNG Commercial Lead at YPF, highlighted on LinkedIn: “Argentina LNG — promoted by YPF, Eni and XRG — has submitted its RIGI application: a USD 51 billion integrated project turning Vaca Muerta gas into LNG exports via two FLNG units, 12 mtpa combined capacity, offshore Río Negro.

“~USD 10 billion/year in export revenue over two decades, ~USD 15 billion in local procurement, up to 40,000 jobs at peak construction, and 8,000 jobs sustained through operations. The largest private investment in Argentina’s history — and a defining step for the country’s energy future.”

YPF claims that this project represents the largest private investment in Argentina’s history and the largest project submitted under the RIGI framework to date. The project encompasses the development of an integrated value chain that will transform Vaca Muerta’s natural gas resources into LNG exports for international markets, with rich gas production in Neuquén, dedicated transportation infrastructure, processing facilities, liquids fractionation trains, and two FLNGs, which will operate offshore Río Negro in the Gulf of San Matías.

Horacio Marín, Chairman and CEO of YPF, commented: “Joining the RIGI framework is a fundamental step toward advancing a project that will open a new chapter for Argentina as a global energy exporter. We are talking about a growth platform that will generate jobs, technological development, opportunities for local suppliers, and an unprecedented level of international integration for our country.”

The application for RIGI approval is described as a key step forward, since the regime provides a long-term framework of legal, fiscal, customs, and foreign exchange stability that is fundamental to enabling large-scale, capital-intensive, export-oriented energy infrastructure projects, essential for attracting investment and long-term international financing required to execute initiatives of this nature.

The project is expected to generate export revenues of approximately $10 billion per year over a period of two decades, making a significant contribution to the country’s trade balance and foreign currency inflows, while driving significant participation from domestic suppliers, with an estimated $15 billion in procurement of goods and services, supporting the growth of local industry and the development of productive capabilities associated with the energy sector.

The total investment is expected to reach approximately $29 billion by 2031, which is the expected start-up date of the two FLNG units, with around $24 billion of that amount to be allocated to the development of strategic infrastructure, including industrial complexes, dedicated pipelines, port facilities and the two FLNG units, while approximately $5 billion will be invested in upstream development and the drilling of the wells required to achieve the production levels needed to supply both units fully.

During the project’s construction phase, a substantial portion of the investment will be financed through a project finance structure sourced from international markets, one of the most widely used solutions worldwide for large-scale energy infrastructure projects, supported by long-term export agreements with international buyers holding investment-grade credit ratings.

The construction phase, scheduled between 2026 and 2030, is expected to enable Argentina LNG to generate approximately 20,000 jobs annually, including direct, indirect, and induced employment, with workforce levels peaking at up to 40,000 workers during periods of maximum activity, expected in the third year of the project.

Over the course of the operational phase and throughout its lifetime, the project is forecast to sustain approximately 8,000 jobs annually, including direct and indirect employment, contributing to the economic development of Neuquén, Río Negro, and the broader national energy value chain.

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