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Argentina LNG Export Project Gathers Backing From Shale Drillers

By Jonathan Gilbert and Ruth Liao
The YPF SA Loma Campana facility in Anelo, Neuquen province, Argentina, on Tuesday, March 2, 2021. YPF, Argentina’s state-run oil company, needs to come up with more than $1 billion to spur drilling in Patagonia, where it’s leading development of the biggest shale patch outside the U.S. Photographer: Anita Pouchard Serra/Bloomberg (Anita Pouchard Serra/Bloomberg)

(Bloomberg) -- A plan to export liquefied natural gas from Argentina is gaining momentum, with four drillers in the country’s heralded shale patch now signed on to supply a facility with the fuel.

London-based oil company Harbour Energy Plc announced this week that it would acquire a 15% equity stake in the roughly $3 billion floating liquefaction project, or FLNG, spearheaded by driller Pan American Energy Group and FLNG vessel provider Golar LNG Ltd.

Harbour recently acquired drilling assets in Argentina from Germany’s Wintershall Dea AG that include areas in the Vaca Muerta shale formation. Wintershall’s offshore venture with Pan American — which is 50% owned by BP Plc — and France’s TotalEnergies SE were also part of the acquisition.

Harbour follows Pampa Energia SA, which said on Nov. 29 that it will have a 20% stake in the project, and Argentina’s top oil and gas producer state-run YPF SA, which also intends to pipe fuel to the FLNG. The facility is scheduled to start operations on the Atlantic coast in 2027.

YPF has been developing a liquefied natural gas project of its own involving multiple FLNGs and, eventually, construction of an onshore plant. Even with various projects being analyzed, YPF’s chief executive has said that Argentina’s drillers should rally around one venture.

Argentina’s LNG ambitions put it in competition with growth in the US and Qatar, two of the world’s top natural gas suppliers. Demand for the fuel has been on the rise in Europe, where importers are cutting back on gas piped from Russia, and in Southeast Asia, where new buyers are de-carbonizing their energy portfolios.

©2024 Bloomberg L.P.