YPF says 27 of 28 Argentina LNG contracts agreed

One contract left

Marín said the remaining contract would be negotiated in London next week by a large team of lawyers, while he stays in New York to meet investors. He spoke by recorded video from Abu Dhabi, where he was attending the ADIPEC oil trade fair; the video was shown at an annual forum of the Buenos Aires Bar Association.

The contracts are agreements among the partners that set up Midco, the holding company that will run the project, the Rio Times reported. Marín described them as very long documents, "a thousand pages for sure".

The partners are YPF, Italy's Eni and XRG, the international investment arm of Abu Dhabi's ADNOC. Eni and XRG would each hold 32% of the upstream gas blocks, and YPF 36%, once regulators approve, according to Inspenet.

What the project involves

Argentina LNG would turn gas from the Vaca Muerta shale field into liquefied natural gas for export. Two floating liquefaction units off Río Negro province would have a combined capacity of 12 million tonnes a year, Eni said.

The RIGI filing puts total investment for the full project at US$51 billion. About US$29 billion is to be mobilised through 2031, when the second floating unit is due to start; about US$24 billion is earmarked for strategic infrastructure and US$5 billion for upstream wells, according to the filing.

The partners applied in August to join RIGI, Argentina's Large Investment Incentive Regime, a step the consortium described as a milestone toward the year-end decision. Joining would let the project operate under a long-term framework of legal, fiscal, customs and exchange rate stability. YPF considers the project could become the largest private investment in Argentina's history, and the RIGI application is the largest submitted under the regime to date, Inspenet reported.

The three partners signed a binding joint development agreement in February covering the 12 million tonnes a year phase, Eni said. They are also evaluating an expansion that could lift capacity to 18 million tonnes a year.

How the date moved

Marín first named 26 November as the signing date at Argentina Week in Paris, a forum the Argentine government organised at the OECD headquarters, Il Sole 24 Ore reported. Eni chief executive Claudio Descalzi confirmed the date at the same event and called it "highly likely".

On 5 November, Marín said the target had widened to a window of 26 to 30 November. Descalzi said construction of the two FLNG vessels would begin immediately after the decision, with the first 6 million tonnes a year floater due in 2030 and the second in 2031.

Financing and contracts

The US Export-Import Bank issued a non-binding indicative term sheet offering up to US$6 billion for the project under an initiative called the Andes-Atlantic Corridor. The offer covers up to US$6 billion of the US$51 billion project and is structured around procurement of US goods and services.

McDermott has won the engineering, procurement, construction and commissioning work for a gas treatment and liquids fractionation facility, Energies Media reported. A contract worth more than US$1 billion for the export pipeline system went to a consortium including Pumpco, a MasTec subsidiary, Bonatti and Contreras Hnos.; that award is contingent on the final investment decision.

Bloomberg reported that JPMorgan Chase and Banco Santander are leading the structuring of financing for the project. Marín has said documentation for lenders was ready for due diligence and that candidates had been selected to design, supply and build parts of the infrastructure.

The size of the US financing that would actually be drawn is not settled, because the US$6 billion is a proposal and not a payment. Argentina's country risk premium, the extra yield investors demand on its debt, could still raise the cost of borrowing for the partners, the Rio Times reported.

What happens next

If the decision is signed, construction could begin in February 2027, Marín has said. He expects the first floating unit to begin operating in 2030, with the second six to 12 months later.

Marín has said negotiations with buyers in Europe and Asia were close to being finalised. YPF estimated in early October that exports would earn about US$10 billion a year at full operation for two decades.

Whether the last contract closes, and whether financing is fully in place before signing, remain open questions, the Rio Times reported.