Key facts
- XRG and Eni have acquired minority stakes in three upstream gas blocks in Argentina's Vaca Muerta shale basin.
- The blocks are Meseta Buena Esperanza, Aguada Villanueva, and Las Tacanas.
- XRG and Eni will each hold a 32% stake, with YPF retaining 36%.
- The gas will supply a planned 12 million tons per annum LNG export project.
- A Final Investment Decision for the project is slated for the second half of 2026.
Abu Dhabi's XRG, the international investment arm of ADNOC, and Italy's Eni S.p.A. have signed agreements to acquire minority stakes in three upstream gas blocks in Argentina's Vaca Muerta shale basin. The blocks, Meseta Buena Esperanza, Aguada Villanueva, and Las Tacanas, are linked to a planned Argentina LNG export project. Under the agreements, XRG and Eni will each hold a 32% stake, while Argentina's state energy company YPF will retain 36%. A Final Investment Decision for the project is anticipated in the second half of 2026. The gas extracted from these blocks is intended to supply the Argentina LNG project, which aims for a capacity of 12 million tons per annum (mtpa) of LNG. The project will utilize two floating LNG (FLNG) units, each with a 6 mtpa capacity, located in Río Negro province. This venture provides Eni and XRG with long-term equity access to significant unconventional gas resources, diversifying their global gas portfolios. For Argentina, the project is a crucial step in its strategy to bolster U.S. dollar reserves through energy exports. President Javier Milei's administration is pursuing a $30 billion energy export strategy focused on the Vaca Muerta basin, which includes the Vaca Muerta Sur (VMOS) Pipeline and the Southern Energy (SESA) Project. The SESA project aims to generate approximately $2.5 billion in annual foreign exchange earnings. Additionally, Milei's RIGI regime offers 30-year tax breaks, customs relief, and deregulated export rules to stimulate long-term energy infrastructure development.