What is YPF’s plan like after the agreement with Shell

The president and CEO of YPF, Horacio Marín, He traveled to Asia at the beginning of 2025 to search for buyers of Liquefied Natural Gas (LNG) that Argentina is going to start producing from 2027. The gas leaving Vaca Muerta will be exported by ships located on the coast of Río Negro. If each of the stages is completed, by 2031 the country would be able to have some 15 billion dollars annually from gas exports.

On December 19, Marín signed a agreement with the Anglo-Dutch multinational Shell to develop Argentine liquefied gas – already without the Malaysian Petronas, which dropped out of the initiative-. In its head, the Argentina LNG project, behind which will be YPF and all the oil companies operating in the country, will have fundamental milestones this year.

First, it is necessary to close long-term supply contracts with companies and countries, mainly from Asia and Europewhich since 2022 no longer have the energy security that the supply of gas from Russia gave them; but also Brazil may appear as a stable buyer.

With guaranteed demand, it will be the turn after obtaining international financing and requesting the entry of different modules to the Large Investment Incentive Regime (RIGI)and then move on to the final stage: the final investment decision (FID), in which participating companies must ensure that they will advance. From then on, there will be no turning back.

In that sense, Marín undertook a trip of almost three weeks, which will have stops in Israel, Japan, South Korea, China and India. In addition, other Argentine executives will travel in mid-January to Germany.

The plan for Argentina to become one of the largest LNG exporters in the world, starting from scratch, is modified month by month, based on changes in the world market and Argentine conditions.

Today, YPF’s idea is to negotiate with the Norwegian company Golar LNG to bring a second gas liquefaction ship to the country. (a process by which the fuel is cooled to 161 degrees below zero, which compresses its volume 600 times and allows it to be transported by ships) that has a capacity of 3.5 million tons per year (MTPA). Germany appears interested in being the buyer (offtaker) of that gas.

Along with the first vessel -of 2.45 MTPA-, the Hilli Ipiseyo, which contracted Pan American Energy (PAE) and where they already associated Pampa Energía and the British Harbor Energythe first stage of Argentina LNG will be completed, with the sale of about 25 million m3 per day (MMm3/d) of gas to the world starting in 2027, but with exports every day of the year, starting with the construction of a gas pipeline fully dedicated to that project.

Tenders should be awarded around July of this year and construction would take between 18 and 24 months.

The second stage of Argentina LNG is the agreement with Shell: 2 ships with a total capacity of 10 MTPAof which the Anglo-Dutch company acquires half for itself and another supermajor (giant) of the oil industry, the other 5 MTPA. Could be the Americans Exxon, Chevron or the french Total.

And in a third block, India could be a buyer of another 10 MTPAto reach a total of almost 26 million tons per year that Argentina can produce over the next decade, almost 120 million m3 per day or the equivalent of 80% of current national natural gas production.

The Argentine project competes with dozens of plants that the United States plans to build in the coming years and that will drive down the world price, forcing the country to achieve more efficiencies and speed to enter the market as a cheap and reliable supplier.