TotalEnergies Green Lights Gas Project Offshore Argentina's Tierra del Fuego
The decision to spend more than $700 million comes 4 years after the French giant shelved the project amid low oil and gas prices.
TotalEnergies announced that it has approved a final investment decision valued at $706 million for the Fenix gas field offshore Argentina. The French supermajor said it expects to achieve first gas by 2025 at a rate of 10 MMcm/D (353 MMcf/D).
Found about 60 km offshore Tierra del Fuego, the Fenix field development plan calls for three horizontal wells to be drilled from an unmanned platform at a depth of about 70 m. Gas will be transported 35 km via subsea pipeline to TotalEnergies’ Véga Pleyade platform—hailed as the world’s southernmost development when it was brought on stream in 2016—before being treated at the company’s onshore processing plants.
TotalEnergies added that the Fenix development will involve the installation of wind turbines and heat recovery systems that are expected to help it achieve an overall carbon intensity of 9 kg/CO2 per BOE. The average carbon intensity for offshore developments globally in 2019 was approximately 17 kg/CO2 per BOE, according to a Rystad report published last year.
“This latest development demonstrates TotalEnergies’ ability to leverage its hydrocarbon portfolio with projects that have low technical costs and low emissions, that can be brought on stream fast by harnessing synergies with existing facilities," David Mendelson, senior vice president of Americas for TotalEnergies, said in a statement.
The approval comes almost 4 years after TotalEnergies elected not to sanction the development while citing low oil and gas prices. At that time, estimates for the cost of the project were reported to be nearing $1 billion. TotalEnergies is the leading international producer in Argentina, representing about 25% of total production.
Boosting production offshore Tierra del Fuego is considered a strategic piece of the South American country's goal to answer its gas demand with domestic output. The region currently represents about 19% of Argentina’s 130 MMcm/D (4.5 Bcf/D) of gas.
TotalEnergies is the operator of the project with a 37.5% interest. Partners include Germany’s Wintershall Dea with a 37.5% stake and Argentina’s Pan American Sur which holds the remaining 25% interest. Wintershall has previously reported that the Fenix field is expected to produce for more than 15 years.