YPF seeks alliances in India to boost Argentine gas exports

YPF President and CEO Horacio Marín, accompanied by the company’s Vice President of Gas and Energy, Santiago Martínez Tanoira, made a strategic trip to India in search of potential buyers for Argentine gas from Vaca Muerta. This trip is part of the state-owned company’s efforts to secure the necessary financing for the construction of a liquefaction plant, which would allow natural gas to be converted into liquid for export by ship to different regions of the world.

The highlight of the trip was with the Minister of Petroleum and Natural Gas of India, Hardeep Singh Puri, who expressed his enthusiasm for the possibilities of cooperation between YPF and Indian companies in the development of a gas-based economy. Through the social network XPuri commented: “We had an interesting conversation about the immense potential that exists for enhancing business opportunities between YPF and Indian companies.” During the meeting, the possibility of expanding cooperation in both traditional and non-conventional forms of energy was also discussed.

YPF’s goal is ambitious: to build an onshore liquefaction plant, a project known as “Argentina LNG,” in partnership with Malaysian company Petronas. This project, which could require investments of up to $30 billion, would allow Argentina to compete in the competitive global market for liquefied natural gas (LNG). However, financing is a key challenge, as international banks require solid purchase guarantees before committing the necessary funds.

India’s interest in diversifying its energy sources, with a focus on natural gas as an alternative to coal, represents a crucial opportunity for Argentina. Even though India remains dependent on coal for almost 50% of its energy production, the country is making progress in building the infrastructure needed to expand its gas imports. This aligns perfectly with Argentina’s need to secure buyers for its gas and attract investment for the required infrastructure.

YPF and Petronas’ bet: Río Negro will be the epicenter of the LNG megaproject

In terms of competition, Vaca Muerta gas has the potential to position itself favorably against other global producers, such as the United States. According to a report by the consultancy Rystad Energy, Argentine LNG could be offered in Asia at a more competitive price, thanks to lower transportation costs and geographical proximity compared to American projects that must pass through the Panama Canal.

The “Argentina LNG” project involves the construction of several floating natural gas liquefaction units (FLNG) and an onshore liquefaction plant. While the final investment decision is scheduled for 2025, the first phase of the project could begin operations by 2027, with LNG exports expected to grow significantly by 2030. Export capacity is expected to reach up to 120 million cubic meters per day (MMm3/d), which would represent annual revenues of around US$15 billion.

The trip by Marín and Martínez Tanoira to India underscores the urgency of securing agreements that boost the financing needed for the development of the LNG industry in Argentina. Meanwhile, the decision to locate the plant in Punta Colorada, Río Negro, demonstrates YPF’s commitment to the project, despite the political and economic challenges facing the country.

Collaboration with Petronas and other international players could be key to turning Argentina into a major player in the global LNG market, taking advantage of Vaca Muerta’s vast gas reserves and growing global demand for cleaner and more sustainable energy sources.