Sebastián D. Penelli YPF President Horacio Marin and Shell LNG Executive Vice President Cederic Cremers signed an agreement to develop a new liquefied natural gas plant with gas from Vaca Muerta. The initiative, known as “Argentina LNG,” will be located in Río Negro province.
The PDA (Project Development Agreement) was signed in The Hague, Netherlands. This information means that Shell will join the project in place of Petronas. The news that the participation of the Malaysian energy giant was in doubt was first reported in September.
According to a press release YPF sent to Herald sister publication Ámbito, the companies are committed to developing the first phase of the “Argentina LNG” project until the decision is made to enter the FEED (Front-End Engineering and Design) stage. They added that, in this initial stage, liquefaction capacity will reach 10 million tons per year (MTPA).
“We are proud that Shell, a world leader in LNG production, is joining the project. As a pioneer in the LNG market, Shell’s knowledge and experience will be key to help position Argentina as a reliable and competitive global energy supplier,” said Marín.
What will happen with Petronas?
YPF confirmed that Shell’s entry into the development of the first stage of ARG LNG means that Petronas’ participation in the project as a partner of the Argentine state-owned energy giant is over.
The release, however, stressed that YPF and Petronas will continue working on the development of another project in the La Amarga Chica area in Vaca Muerta.
“YPF recognizes the valuable contribution of Petronas during the last two years, sharing with YPF’s teams its technical and commercial experience in the LNG market,” the statement read. It added that the joint work “contributed to the development of the ARG LNG project to its current stage and will allow new steps to be taken.”
What is the Argentina LNG project about?
Argentina LNG is a project to liquefy gas and export it to global markets. This initiative is part of Horacio Marín’s 4×4 plan for YPF, a 10-year action plan for the state-owned company that contemplates an investment of US$10 billion.
The initiative includes the production of gas in Vaca Muerta, its transportation through 580 kilometers of gas pipelines to a processing and liquefaction terminal set to be built in Sierra Grande, Rio Negro province, on the coast of the Atlantic Ocean.
