Argentina LNG formalized its entry into the RIGI with a historic investment of USD 51 billion

The megaproject Argentina LNG formalized its application for membership in the Incentive Regime for Large Investments (RIGI), consolidating an unprecedented accumulated disbursement of USD 51 billion.

This titanic initiative, driven by the majority state-owned oil company YPF in partnership with international giants Eni (from Italy) and XRG (the investment arm of the Emirati ADNOC), represents the largest private investment in the entire history of Argentina.

The primary objective is to structure an integrated value chain to transform natural gas from Vaca Muerta into exports of liquefied natural gas (LNG) destined for global markets.

The extraordinary progress of this project demonstrates the resounding success of the deregulating and business-friendly direction promoted by the administration of Javier Milei, offering a framework of long-term legal, fiscal, customs, and exchange stability essential for attracting international financing.

In line with this milestone, the president and CEO of YPF, Horacio Marín, emphasized: “Joining the RIGI is a fundamental step to advance with a project that will open a new stage for Argentina as a global energy exporter. We are talking about a growth platform that will generate jobs, technological development, local suppliers, and an unprecedented international insertion for our country”.

The executive was categorical in stating: “Without RIGI, there is no LNG today. I said it at the beginning and I continue to say it. That change and that opening to business was very necessary”.

According to estimates, once operating at full capacity, it will generate genuine income from exports close to USD 10 billion annually for two decades.

The total financing will be organized under the largest Project Finance scheme in Latin America. The development cost of USD 51 billion will be structured with 70% covered by international loans and the remaining 30% contributed by the partner firms.

The immediate focus is on consolidating financing for the initial phase of USD 15.5 billion, a task where the international entity JP Morgan is responsible for the financial design alongside banks such as Santander.

The global reception has been overwhelming: 47 prequalified banks submitted offers, reaching an oversubscription equivalent to 2.4 times the originally required capital. Regarding this, Horacio Marín pointed out: “When you have a book that exceeds what you need, that means more time and less rate”.

The upstream blocks that will supply the project have already been delineated following an asset swap with the company Pluspetrol.

The distribution over the strategic fields Meseta Buena Esperanza I and II, Aguada Villanueva Norte, and Las Tacanas I and II was structured with a 36% share for YPF and a 32% share for each foreign partner, Eni and XRG; areas that will be managed by the firm UPCO ARLNG I S.A.U..

The technical scale includes a pipeline of 527 kilometers in length and an unprecedented diameter of 48 inches that will connect Meseta Buena Esperanza (in Neuquén) with the terminal at Sierra Grande (in Río Negro) to mobilize a projected capacity of about 100 million cubic meters per day.

Additionally, a multiduct will be built to transport liquids associated with gas, treatment plants, and fractionation trains. Furthermore, at least two floating liquefaction units (FLNG) will be positioned off the coast of Sierra Grande, in the Golfo San Matías, with an initial combined capacity of 12 million tons of LNG per year (12 MTPA), with a projection to scale up to 18 million (18 MTPA).

In the industrial bidding for the supply of pipes, the corporation Tenaris —led by Paolo Rocca— is analyzing investments for the coating of the pipes, seeking revenge after losing the pipe tender to the Indian firm Welspun in the context of the Southern Energy (SESA) project by Pan American Energy (PAE).

Of the total USD 51 billion, it is projected to invest about USD 29 billion by the year 2031, coinciding with the commissioning of the floating platforms. Of that amount, USD 24 billion will be allocated to industrial infrastructure —pipelines, port complexes, and FLNG units— and the remaining USD 5 billion to the development of wells in the upstream.

In social terms, during the construction phase (2026-2030), the project will generate approximately 20,000 annual jobs (direct, indirect, and induced), reaching peaks of up to 40,000 workers during the third year of works. In the operational phase, it will sustain about 8,000 annual jobs, boosting the economies of Neuquén and Río Negro. Additionally, contracts worth USD 15 billion are expected to be exclusively allocated to national goods and services suppliers and contractors.

To dimension this colossal initiative, it is worth contrasting it with the Southern Energy (SESA) project. While SESA has already secured a contract for USD 7 billion with the German state-owned Securing Energy for Europe (SEFE) to export 2 million tons annually of LNG for 8 years starting at the end of 2027 —covering 80% of the capacity of its liquefaction vessel, the Hilli Episeyo— the processing capacities of its vessels are between 40% and 60% lower than those projected for the units of Argentina LNG, whose formal entry into operations will be staggered between the years 2029 and 2031.