Argentina’s majority state-owned energy company YPF announced on Thursday that it will file to bring its Argentina LNG project under the country’s Large Investment Incentive Regime (RIGI, by its Spanish initials). The special tax, customs, and foreign exchange regime offers investors several fiscal and currency exchange benefits.
Argentina LNG is a large-scale natural gas liquefaction (LNG) project aimed at developing resources in unconventional oil field Vaca Muerta, with an investment of US$51 billion, the largest in the country’s history. It was signed as a joint development agreement between YPF, Italian oil and gas corporation Eni, and Abu Dhabi-based investment company XRG.
YPF president and CEO Horacio Marín said that joining the RIGI is “a crucial step” toward moving forward with a project that will usher in “a new era for Argentina as a global energy exporter.”
“We’re talking about a platform for growth that will generate jobs, technological development, local suppliers, and an unprecedented level of international integration for our country,” he said.
In a statement released by the company, YPF described its adhesion to RIGI as “a key milestone” for the development of Argentina LNG, as it will provide it with “long-term legal, tax, customs, and foreign exchange stability.”
According to YPF, the conditions offered by the RIGI are “essential” for “attracting long-term international investment and financing,” two factors necessary for implementing such initiatives.
What is Argentina LNG?
Argentina LNG aims to convert Vaca Muerta’s natural gas into LNG for export.
YPF announced the project includes the production of rich gas in Neuquén, dedicated transportation infrastructure, processing plants, liquid fractionation trains, and two floating liquefaction units (FLNG), with a combined capacity of 12 MTPA, which will operate off the coast of Río Negro in the San Matías Gulf.
The project is expected to deliver export revenues of nearly US$10 billion annually over 20 years, strengthening the country’s trade balance and foreign exchange earnings.
It will focus on upstream development and the commissioning of two floating liquefaction units.
First, the companies will invest approximately US$5 billion to carry out the initial exploration phase and drill the wells. The goal is to reach a production level capable of supplying both liquefaction units at full capacity.
Meanwhile, they will also begin commissioning the two floating liquefaction units (FLNG) — with their respective strategic infrastructure, industrial complexes, dedicated pipelines and port facilities — which are scheduled to come online in 2031. To this end, they plan to allocate US$29 billion over the next five years.
The project is expected to create approximately 20,000 jobs annually in its construction phase between 2026 and 2030, including direct, indirect, and induced jobs. During the operational phase and throughout its entire lifespan, the project will support “around 8,000 jobs annually.”
Regarding its local impact, they expect the project to boost local industry and develop productive capacity linked to the energy sector, particularly in the provinces of Neuquén and Río Negro, while benefiting “the entire national energy value chain.”
