Key facts
- JPMorgan and Santander are leading a $15 billion financing push for the Argentina LNG project.
- The project is a partnership between Italy's Eni, Argentina's YPF, and UAE's XRG.
- The facility is planned for Argentina's Atlantic coast with an initial capacity of 12 million tons of LNG annually.
- The total estimated cost of the project is $24 billion.
- Gas supply will come from the Vaca Muerta shale play, known for its significant recoverable shale gas resources.
JPMorgan and Santander are reportedly spearheading a significant financing initiative for the Argentina LNG project, with the total funding potentially reaching $15 billion. Sources indicate that the companies involved are targeting a final investment decision by November for the venture, which is a collaboration between Italy's Eni, Argentina's state-owned energy company YPF, and the UAE's XRG.
The proposed facility is slated for construction on Argentina's Atlantic coast and is designed to produce 12 million tons of liquefied natural gas annually, with the possibility of expanding to 18 million tons. The overall cost of the project is estimated at $24 billion, encompassing two floating liquefaction trains, cross-country pipelines, and a plant for natural gas liquids. This investment significantly exceeds Argentina's $20 billion loan agreement with the International Monetary Fund, and given the tendency for LNG projects to exceed budgets, the final cost could be even higher.
The project's gas supply will be drawn from the Vaca Muerta shale formation, recognized for holding the world's second-largest technically recoverable shale gas reserves, trailing only the U.S. Marcellus. Partners in the project estimate that Argentina possesses the potential to eventually produce 24 million tons of liquefied gas per year. The development of Vaca Muerta has already positioned Argentina as the fourth-largest oil producer in Latin America, a status expected to grow as the government actively promotes the energy sector and related infrastructure to enhance the region's offtake capacity. Current natural gas output is near an all-time high, with estimated resources in Vaca Muerta reaching approximately 308 trillion cubic feet.