Argentina’s state energy company YPF has tapped JP Morgan to raise up to $16 billion in project financing to advance the $20-billion third phase of the Argentina LNG project, aimed at exporting natural gas from the Vaca Muerta shale play, toward a final investment decision (FID) in mid-2026.
YPF CEO Horacio Marín told Reuters on 4 December that JP Morgan would structure the financing package, and that the proceeds would enable YPF and its Phase 3 partners, Eni and ADNOC’s XRG, to launch exports of 12 mpta from two floating FLNG units in 2030-2031.
Harbour Energy and its partners declared FID in May on Phase 1 of Argentina LNG (also called the Southern Energy project), which targets the startup of production from the Hilli Episeyo vessel around year-end 2027, followed by the MK II vessel in late 2028. Together, the two FLNG vessels have a nameplate capacity of 5.95 mtpa.
Shell Walks Away
Marín told Reuters that YPF is seeking a new partner to replace Shell, which exited Phase 2 because of changes that halved the project’s scope to 6 mpta from 12 mpta and prioritized the Eni-XRG-led Phase 3.
“Shell is no longer participating in the base project, but will continue to evaluate future expansion options,” Shell said in a statement following its exit.
All FLNG units planned for the Argentina LNG project will be moored in the Gulf of San Matías (Golfo San Matías), Río Negro province, offshore approximately 35 km south of Las Grutas.
Marín said that the project’s financial assumptions are based on current LNG prices to Asia given that Argentina LNG exports to Asia would have a competitive advantage over those from the US.
Financing typically covers 70 to 80% of such projects, he added. If raised, the $16 billion would represent the largest private project finance loan in Argentina’s history.
Supermajors including Shell, TotalEnergies, Chevron, BP, and ExxonMobil have played major roles in upstream development of Argentina’s shale oil and gas since YPF discovered the Vaca Muerta shale play in 2010.
YPF produces 55% of Argentina’s oil and gas, supported by growing local independent producers as President Javier Milei’s economic reforms foster private sector growth.