YPF and ENI signed a memorandum of understanding to export LNG for USD 100 billion.

As part of an international tour by President Javier Milei, YPF and the Italian energy company ENI will sign a preliminary agreement this Friday in Rome to advance to the third phase of the Argentina LNG megaproject, which involves the export of liquefied natural gas (LNG) worth USD 100 billion over the next twenty years. The signing will be led by YPF President Horacio Marín and ENI CEO Claudio Descalzi, with the participation of Milei and Italian Prime Minister Giorgia Meloni.

The agreement, known as a head of agreement, represents a key step before the Final Investment Decision (FID), which YPF expects to reach before the end of the year.  This stage follows the Memorandum of Understanding (MOU) signed in April and defines the main commercial terms of the contract, although it is not yet binding.

A project that will change Argentina's energy balance

The partnership with ENI will focus on developing infrastructure to extract, transport, liquefy, and export gas from Vaca Muerta through floating units installed in the province of Río Negro. The intention is to install two liquefaction vessels with a capacity of 6 million tons per year (MTPA) each, which represents a gas volume close to 100% of Argentina's current production.

In total, the Argentina LNG project plans the installation of six offshore vessels, capable of producing 28 MTPA, equivalent to 141 million m³ per day. If fully completed, it would rank among the largest global initiatives in the sector. According to the International Gas Union (IGU), this figure matches the number of floating plants operating worldwide.

First shipment in 2027

The starting point of the plan will be the start of operations in 2027 of the Hilli Episeyo vessel, provided by the Norwegian firm Golar and operated by Southern Energy. This consortium, recently benefited from the Large Investment Incentive Regime (RIGI), is made up of Pan American Energy, YPF, Pampa Energía, Harbour Energy, and Golar LNG. Its initial production is estimated at 2.45 MTPA, equivalent to 11.5 million m³ per day.

This unit will be joined by the future construction of a second vessel, "MKII," exclusively owned by Southern Energy, which will support the initial phase of the plan.

Phases 2 and 3: global partners and more vessels

Starting in 2028, Argentina LNG phases 2 and 3 will begin, with an additional production increase of 22 MTPA. The second phase, scheduled for 2029-2030, will be driven by YPF together with Shell and three other strategic partners yet to be revealed, with an estimated investment of USD 12 billion, two new vessels, and a dedicated gas pipeline. Meanwhile, Argentina LNG 3 will add another 12 MTPA and is the phase that motivated the agreement signed with ENI.

In addition to LNG, the Government estimates that the increase in oil exports could generate another USD 15 billion annually, which, combined with LNG, could add up to USD 30 billion per year in exports, a level comparable to that of the agricultural sector, offering a structural solution to the country's persistent foreign exchange deficit.