Pampa Energia SA is green-lighting a US$2.7-billion urea fertiliser plant on Argentina’s Atlantic coast, marking the first new facility of this kind that the country has seen in about 25 years.
Argentina is rushing to grow production of natural gas out of its booming shale patch Vaca Muerta, which has more recently been focused on oil as it is easier to transport and export. Natural gas in used in the output of fertilisers, giving drillers another customer base for the energy product. The plant will also strengthen domestic supply chains for the crop input and reduce reliance on shipments from the Middle East.
The plant, which will produce 2.1 million tons a year of ammonia and urea, received a final investment decision, the company said in a regulatory filing Friday.
The project has been closely watched by equity analysts tracking Pampa’s growth. It has the potential to create US$1 billion in annual revenue, executives said on an earnings call in May. The company, chaired by Argentine business mogul Marcelo Mindlin, is already a major power generator and natural gas producer and has been making a push in shale oil.
The plant, to be built over three years in Argentina’s petrochemicals hub in Bahía Blanca, underscores a broader trend of the nation finding ways to monetise its vast shale gas reserves. These include the Southern Energy SA liquefied natural gas project, in which Pampa has a stake, and another bigger LNG venture involving Italy’s Eni SpA and Adnoc, Abu Dhabi’s national oil company, which still needs to secure financing. Profertil SA, an existing Argentine fertilizer operation, is also considering a big expansion.
Pampa’s final investment decision is another major coup for RIGI, President Javier Milei’s marquee investor programme featuring major tax breaks. RIGI approval is “essential,” it said in the filing and pending. RIGI has drawn a slew of applications in shale-drilling areas and in pipeline and processing infrastructure – supercharging development in the Vaca Muerta.
by Jonathan Gilbert, Bloomberg
