YPF seeks financing to build the largest oil pipeline in two decades

The firm Vaca Muerta Oil Sur (VMOS), comprised of the country's leading oil companies and led by YPF, took an important step in financing the most significant oil transportation infrastructure project in the last 20 years in Argentina.

The company has hired five international banking entities to obtain a syndicated loan of USD 1.7 billion, which will cover 70% of the total estimated cost of USD 2.5 billion.

This pipeline is key to strengthening Vaca Muerta's export capacity, one of the largest shale oil reserves in the world. The works began in January 2025, with the mobilization of contractors, earthworks, and the delivery of pipes.

The pipeline is expected to begin operations in the second half of 2027, with an initial capacity of 550,000 barrels per day, with a potential expansion up to 700,000 barrels.

The companies participating in this project, in addition to YPF, are Vista Oil & Gas, Pan American Energy (PAE), and Pampa Energía. In the coming months, the incorporation of other companies such as Shell, Chevron, and Pluspetrol, which reserve capacity in the pipeline, will be determined.

One of the essential elements of this initiative is the request to access the benefits of the Incentive Regime for Large Investments (RIGI), which would improve the project's financial conditions. The companies are awaiting approval from Javier Milei's government to move forward in this aspect.

The relevance of this pipeline lies in its ability to increase Argentine crude exports, especially to the Asian market.

The connection with the Very Large Crude Carriers (VLCC) will optimize logistical costs and increase the competitiveness of Vaca Muerta's oil in international markets.

The Punta Colorada maritime terminal, located in the province of Río Negro, will be a key component of the project. From there, the crude will be transported through an underwater pipeline to the dispatch buoys, where it will be loaded onto large ships for export.

The positive economic impact

The construction of VMOS is expected to have a positive economic impact on the producing provinces, such as Neuquén and Río Negro. In addition to generating employment, the infrastructure will boost the sustained growth of shale oil production, consolidating Argentina as a key exporter in the region.

The VMOS project represents a strategic bet for Argentina's energy future. It will not only improve oil transportation infrastructure but also consolidate Vaca Muerta as one of the main shale oil producing regions worldwide.

As the construction of the pipeline progresses, the key aspects of its financing and the participation of new companies will be defined. With the approval of the RIGI, the project could access fiscal incentives that would facilitate its development and maximize its positive impact on the Argentine economy.

In a global context of increasing energy demand, the development of infrastructures like VMOS will be essential to consolidating Argentina's position in the hydrocarbon market, ensuring export revenues and strengthening the national oil industry.