YPF will move forward with the planned construction of a liquefied natural gas (LNG) plant in Río Negro province — with or without Malaysian energy giant Petronas, its Chief Executive Officer has said.

His comments came after it emerged that Petronas may pull out of the project, which was announced in late July. 

A source with knowledge of the deal, speaking on condition of anonymity, told the Herald that a final decision on whether Petronas would remain involved in the project has not yet been taken. 

Marín said that by mid-November, YPF would have finalized costs for the engineering of LNG tankers. The work will require an investment of around US$200 million, he said.

“At that moment, Petronas has the option to continue with the project or leave. We can’t be so dramatic about the situation, these are business decisions. I don’t have information about what Petronas’s decision will be,” Marín told El Observador. 

“It’s one of the best LNG companies in the world and we’re working really well with them. If Petronas doesn’t stay [in the deal], YPF will move forwards. It’s a project with a lot of interest. The project doesn’t depend exclusively on Petronas. Other companies can enter.”

There is interest around the world in Argentina’s nascent LNG project, including from supermajor oil and gas companies, he said.

“We came to YPF to accelerate the project, with the objective that the country will be able to export around US$15 billion in gas alone in 2030,” Marín said.

The LNG plant made headlines in Argentina as the location of the project led to a competition between Río Negro and Buenos Aires provinces. In an effort to secure the joint venture between YPF and Petronas, Río Negro became the first to officially adhere to Argentina’s new Large Investment Incentive Regime (RIGI, by its Spanish initials) on July 12. 

BA Governor Axel Kicillof, fiercely opposed to President Milei, declined to join the RIGI and announced a special regime of his own to encourage investments. 

Río Negro finally outbid Buenos Aires province’s proposal to build the plant in Bahía Blanca. Instead, the project will be located in the area of Punta Colorada, in the Patagonian town of Sierra Grande, Río Negro province. An old, unused port with an outlet to the Atlantic Ocean will also be developed and modernized.

Marín added that international consultancies had found that Argentina’s LNG project is more competitive than projects in the US because of the RIGI and the development of the Vaca Muerta unconventional oil and gas field.

“Argentina would become the world’s fifth exporter, to supply the markets of Asia, India and Europe,” Marín said. “I’ve been to India, I had meetings with seven CEOs and the energy minister. The focus is on selling gas to India, and they’re going to need a lot of gas to maintain their economy.”

The next step is securing financing, he said. “The project is financed in the market, and they take risks based on the closed project.”