Argentinian YPF and Petronas in talks on gas pipeline and LNG plant, source says

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Cars drive past a gas station of Argentine state-owned energy company YPF, in Buenos Aires, Argentina February 10, 2021. Picture taken February 10, 2021. REUTERS/Matias Baglietto/File Photo

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BUENOS AIRES, Sept 1 (Reuters) – Argentine oil company YPF and Malaysia’s state-owned energy company Petronas are in talks over plans to build a new gas pipeline in the South American country and a liquefied natural gas plant ( LNG), a source close to YPF told Reuters on Thursday.

The two parties are expected to sign a preliminary agreement on Thursday, the source said. The Argentine president’s office said in a statement that the two companies would cement an “alliance” related to the development of unconventional gas in Argentina.

Home to the massive Vaca Muerta shale formation, Argentina is seeking to increase gas production and LNG export capacity to help reduce its dependence on expensive gas imports and bring in much-needed foreign exchange. to replenish dwindling reserves.

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The deal, if materialized, could generate investments of up to $40 billion over 10 years, the source close to YPF said on condition of anonymity as the information was not official. The source gave no further details on the plan.

Petronas did not respond to an emailed request for comment.

YPF and Petronas have worked together before. In late 2018, the companies announced investments of $2.3 billion to develop shale oil in a block of Vaca Muerta, the world’s second-largest shale gas reserve and fourth-largest oil reserve. of shale.

Argentina is already working on a new pipeline separate from Vaca Muerta to increase gas transport capacity, while the government has publicly said it wants to create the infrastructure to enable LNG exports.

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Reporting by Eliana Raszewski; Editing by Adam Jourdan and Paul Simao

Our standards: The Thomson Reuters Trust Principles.

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