The first project to be built under the government’s newly launched large investment regime (RIGI) will be an oil pipeline called “Vaca Muerta Sur” spearheaded by state-owned energy company YPF. The project will cost US$2.5 billion, according to YPF president Horacio Marín.

The RIGI, a major part of the Ley Bases that not all provinces have adhered to, consists of a flurry of tax breaks, currency exchange perks, and other sweeteners. It was designed to attract foreign investments as the country’s severe currency controls usually scare investors off.

However, the first company to benefit from the scheme will be the Argentine state-owned enterprise, although other companies that have yet to be specified could also be involved in the project. 

“We are going to do it with the entire industry and we are in talks with a very important U.S. midstream company,” Marin said in an interview with Radio La Red.

The project is the second tranche of a gas pipeline going from the heart of Vaca Muerta, a geological formation hosting major deposits of shale oil and gas, to the Punta Colorada port, 565 kilometers away. 

The first tranche of the pipeline, which is already underway, stretches 130 kilometers from the Loma Campana complex in northern Neuquén to the town of Allen in Río Negro. The pipeline will connect there to the integrated pipeline system of Oldelval, the licensee of the area’s oil ducts until 2037.

The second tranche to be constructed under the RIGI, will be 437 kilometers long and go from Allen to the Punta Colorada port. That old port will also be used and modernized for the Petronas-YPF liquefied natural gas (LNG) plant.

An YPF spokesperson said the company aims to start the construction of the second tranche in the last quarter of 2024.

“When completed, the Vaca Muerta Sur project will enable the export of 135 million barrels of oil per year, making Argentina one of the region’s main exporters and contributing foreign currency and jobs to the country,” a communiqué by YPF said.

Aside from the pipeline, the project includes the construction of the largest tank farm in Argentina and two floating monobuoys to be located 6 kilometers offshore.