After nearly two years of negotiations, YPF and the Malaysian state company Petronas announced on Thursday a deal to advance the exploitation of Liquefied Natural Gas in Vaca Muerta, which is the second largest reserve of unconventional gas in the world. The sealed alliance foresees investments in a first phase of 10,000 million dollars and was announced in a ceremony led by President Alberto Fernández at the CCK.

As explained by the Argentine state oil company, it is a Joint Study and Development Agreement (JSDA) for an integrated LNG project in Argentina that will involve the Upstream with the production of unconventional gas, the development of pipelines and infrastructures, the production of LNG, as well as international marketing and logistics.

This agreement will advance on three pillars: on the one hand, the increase in gas production: according to the estimates of both companies, when the project is completed, in about a decade, it will be possible to export over 25 million tons of LNG per year. .

However, they made it clear that it is not necessary to reach the end of development to increase the country’s production capacity, which in a first phase would reach 5 million tons per year.

The other two pillars aim at improving the transport capacity and installation of an LNG plant. to promote export. This could be built in Bahía Blanca or Neuquén and is something that would be defined in the short term.

This would change the country’s energy matrix: today, Argentina imports, at the peak of winter consumption, about 35 LNG ships per year. When the LNG plant reaches its maximum capacity, Argentina could export more than 460 ships per yeartransforming LNG into one of the main export and currency generator sectors for the country.

In the act to the CCK, together with his Malaysian counterpart, the president of the YPF, Pablo Gonzalez explained that this level of imports “at reasonable prices and not those we have seen in recent months” in reference to the increase in gas prices from the war in Ukraine, would mean for the country “annual income of at least 20,000 million US dollars”.

As explained in the company, this is an ambitious project that will require investments in stages, so it is not excluded that more partners will join this company later: it is estimated that the total project will involve an outlay close to 40,000 million dollars.

It is not excluded that other players present in the country, such as Panamerican Energy, wish to join this project and form an “LNG export consortium”.

The relationship between the Malaysian company and YPF dates back to 2014. Petronas manages terminals and producers of Liquefied Natural Gas all over the world and is considered the fourth company in the sector worldwide by production capacity.

Added to this are sophisticated reception and storage facilities to supply East Asia which, at least until now – in a scenario that could change rapidly after the invasion of Ukraine – is the main destination for exports of this type of storage. of natural gas.

Along with the joint development agreement, a memorandum of understanding, with less binding force, was also signed to evaluate other activities around the strategic alliance, such as oil production, petrochemicals and clean energy solutions.