YPF launches its first RIGI project for US$2.5 billion while waiting for a definition from Petronas for LNG

YPF launches its first RIGI project for US.5 billion while waiting for a definition from Petronas for LNG

This was confirmed by the CEO of the state oil company, Horacio Marinduring the CEOs Meeting, an unmissable event of the IAGP AOG Patagonia 2024, which is held in Neuquén until Friday, October 25. “We have already moved forward with the agreements and in January we started construction,” the executive said at the event.

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Marín said that this project will involve an investment of US$2.5 billion and that by December 2026 the project will have a transportation capacity of 360,000 barrels of crude oil per day from the Neuquén basin.

As commented from YPFhe Vaca Muerta Southern Pipeline (VMOS) will have an impact on Argentina’s energy export platform and will generate a change in the productive matrix of the country with a pole similar to agriculture, but without its climatic risks.

The project, pioneering within the framework of Large Investment Incentive Regime (RIGI)consolidates Dead Cow as one of the most important unconventional deposits in the world, and will allow Argentina to become one of the main exporters in the region. “With this work the bottleneck of oil transportation is over, there are no more excuses, we must invest and produce”Marín urged.

Marín announced that in November the project will be discussed in the YPF board of directors and that then they will begin the procedures to join it to the RIGI. They estimate that work will begin in January 2025.

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What is the Vaca Muerta Sur Oil Pipeline and where does it pass through?

He Dead Cow South Pipeline It is a strategic work for the sector, since it will allow increasing the non-conventional production of oil and create an energy export platform in Black Riverwhich can then be complemented with the export of LNG and the own plant in Punta Colorada.

Currently, the first section of the pipeline that extends from the town of Anelo (Neuquén) to that of Allen (Black River)where it will connect with the Oldelval.

From Río Negro they explained that Punta Coloradawhere the export terminal will be located near the town of Sierra Grande, has natural characteristics that position it as a world-class export point for crude oil from the Neuquén Basin. “Thanks to its distinctive conditions, the terminal will be suitable for large oil tankers known as VLCCs, opening access to more competitive markets internationally,” they indicated.

In that area the YPF LNG plant. As it turned out, The oil company evaluated 20 sites from Bahía Blanca to Caleta Olivia and classified Punta Colorada as a world-class export point due to its natural characteristics.

What is the Vaca Muerta Oleoducto Sur work like?

For the first section of the Dead Cow South Pipeline of some 128 kilometers, The investment is around US$190 million and, according to the majority state company, 500 jobs were generated during the peak of the tasks.

At its maximum operating capacity, the pipeline will transport in the first quarter of 2025 between 350,000 and 390,000 barrels of oil per dayincreasing by 70% the possibility of oil evacuation from the Neuquén Basin and doubling the current capacity of the core area of Dead Cow. That crude oil will come out

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The second stage of the pipeline, 437 kilometers plus the export terminal, will require an investment of more than US$2.5 billion and will increase by 700,000 barrels per day of capacity from 2028.

In addition to the pipeline, the project includes an extra budget for the construction of the largest tank farm in Argentina and two floating monobuoys, which will be located 6 kilometers from the coast.

When completed, the Dead Cow South Pipeline will allow export 135 million barrels of oil per year “turning Argentina into one of the main exporters in the region and providing foreign exchange and work to the country.”

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What happens with Petronas and the YPF LNG plant in Río Negro?

Petronas’ departure from the YPF LNG project is not confirmed. The deadline that YPF had imposed on itself for them to define whether they stay or leave the ARGLNG project It ran from November to the end of December.

As far as he could know Energy Report, The basic engineering work in Punta Colorada has not been completed, and without that information – key to defining investment amounts – the Malaysians are not in a position to announce whether they will withdraw and cancel the MOU or stay and invest the first US$160. millions they promised.

“If Petronas does not continue, we will move on,” Marín had warned and he did not stay with his arms crossed. Unobjectionable sources assured this medium that YPF already has “pre-confirmed” two majors (large players) that are willing to join the LNG project. one is Shell, the second largest operator of liquefied natural gas in the world.

The other “major” would be a company from Houston, which also ranks in the TOP 5 of global LNG operators, and which participated in the first export of this product from Argentina. In a few weeks the details will be known.

The other version that circulated in the AOG was that a European energy giant that already acquired hydrocarbon assets in the country could be a new key LNG player for YPF and other local liquefied gas entrepreneurs. “It’s all very incipient,” admits a high-ranking source familiar with these negotiations.

What Marín did say publicly is who he is going to sell the LNG to. Germany, Italy, possibly Hungary, Türkiye, India, the United Kingdom and some Asian country, which is about to be defined with another roadshow in the coming weeks.

In Ankara Marín closed one of the first agreements, which has not yet been made public, with the state company Botas, which coincidentally signed an LNG supply agreement with Shell days ago starting in 2027. Will it be with Vaca Muerta gas?

Vaca Muerta in numbers, the path to $180,000 million and 2 million barrels

In Vaca Muerta, US$47 billion have sunk since 2013. In 2024 alone they will total US$11.5 billion, 75% more than last year. Estimates from private consultants indicate that although these investments served to exceed the 10% possible activity in Neuquén training, there is still a long way to go.

According to Aleph Energy, Projects in the national hydrocarbon sector require an average investment of US$22.5 billion per year until 2031, a figure that doubles the current average. For the next eight years, They assure that a dance in investments of US$181,000 million is needed. Can it be achieved?

For infrastructure alone, the sector’s current large deficit, up to US$14,000 per year could be invested in oil and up to US$3,500 in gas, including LNG projects, but not the onshore plant that Petronas is planning. about to give up, right?

Source: Ambito

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