The President and CEO of YPF, Horacio Marinlaunched an ultimatum from the United States to the operators of hydrocarbons from Argentina to join the construction and financing of the Vaca Muerta Southern Oil Pipeline (VMOS)a key infrastructure project to boost the export of oil from the Neuquén Basin.
“In two weeks we will close the call for applications. Those who did not join, did not join and will have a more expensive access to crude oil transport capacity”said Marín during the “4th Vaca Muerta Shale Day”, organized by the IAPG in Houston and broadcast live throughout the world.
Horacio Marin had anticipated that the Vaca Muerta South Oil Pipeline It would be the first “RIGI energy project in the country” and he specified that it will require an investment of around US$2.5 billion.
In front of 200 participants from Argentina and other countries, the YPF executive was blunt: “Every day that we delay this project costs the country US$12 million, so we want to move forward. We will all have the same rate, but those who do not enter in the first stage will be left out.”
With the launch of the Large Investment Incentive Scheme (RIGI)the first announcements of projects that aim to take advantage of the benefits of the new promotion scheme began to take shape, to which is now added the completion of the oil pipeline that will connect Dead Cow with the Gulf of San Matias.
Giving details about the execution of the project, the head of the company stated weeks ago that the work “It will end the current bottleneck in the transportation of oil from Vaca Muerta.”
“We are going to do it with the entire industry and we are in talks with a very important midstream company in the United States,” he had said before traveling to the northern country.
According to Marín, now confirmed from Houston, talks are ongoing with the American Transfer Energywith whom a non-binding offer is maintained until December 31 for the construction of three pipelines. “If they decide to invest in Argentina, they would contribute 50% of the capital. I hope they invest. It is a giant company, it has 135,000 kilometers of oil and gas pipelines in the United States,” the CEO had said.
The rest of the investment -for now- would be in charge of YPF and two other companies that confirmed that they are joining the project.
The IAPG Houston event was sponsored by both YPF and Chevron, Pan American Energy (PAE), TotalEnergies, Ecopower, ExxonMobil, Shell, Rystad Energy, Eco Energies, TGS, Halliburton, Pampa Energia, Proshale, Excelerate Energy, TGN, Schlumberger, CGC, Duralitte, Tecpetrol, Gas y Petróleo del Neuquén SA, DUXAOIL TEXAS LLC, Tracerco, Oldelvalamong others. These firms would include potential new partners for VMOS.
What is the Vaca Muerta Southern Pipeline and where does it pass through?
He Vaca Muerta South Oil Pipeline It is a strategic work for the sector, since it will allow to increase the non-conventional production of oil and create an energy export platform, which can then be used for the export of LNG with the company’s own plant in Punta Colorada.
Currently, the first section of the pipeline that will extend between the towns of Añelo (Neuquen) and Allen (Black River)where it will connect with the system of Oldelval. In fact, Last week the first pipes arrived in Río Negro.
From the Patagonian province they explained that Red Pointthe site where 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 up access to more competitive markets internationally,” They indicated. The facility will also be installed there YPF and Petronas LNG plant.
According to reports, 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 South Oil Pipeline project like?
For the first section of the Vaca Muerta South Oil Pipeline of about 128 kilometers, The investment is around US$190 million and, according to the state-owned company, 500 jobs will be created during peak operations. At its maximum operational capacity, the pipeline will allow the transport of 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.
Vaca Muerta South YPF Oil Pipeline
The second stage of the pipeline, 437 kilometers plus the export terminal, will require an investment of more than US$2 billion and will increase by 700,000 barrels per day capacity from 2028.
In addition to the pipeline, the project includes an additional 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 Oil Pipeline will allow exporting 135 million barrels of oil per year “making Argentina one of the main exporters in the region and providing foreign currency and jobs to the country.”
Source: Ambito
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