Argentina’s YPF and Italy’s Eni have reached an agreement with the Abu Dhabi National Oil Company’s XRG investment arm for it to join a liquefied natural gas project linked to Argentina’s Vaca Muerta field, YPF said on Tuesday.
In a statement released during the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC), YPF CEO Horacio Marin said XRG’s incorporation, "strengthens a key initiative for the energy future of the country", and will allow Argentina to turn into a "world-class" exporter of LNG. The project is seeking financing of at least $12.5 billion, a person close to YPF told Reuters.
The companies are expected to sign a technical agreement within a month, that person added. Eni and Argentine state-controlled oil company YPF signed a final engineering agreement in October to export gas from the Vaca Muerta formation, the world’s second-largest unconventional natural gas reserve.
YPF is leading the project, which involves installing floating liquefaction units at a port in the Patagonian province of Rio Negro. Gas will arrive from Vaca Muerta, in the province of Neuquen, via a pipeline.
Argentina, which is seeking to increase its foreign exchange reserves, could earn around $20 billion annually in exports from the project.
(Reporting by Leila Miller and Eliana Raszewski, Editing by Kylie Madry, Jan Harvey and Tomasz Janowski)