BUENOS AIRES (Reuters) – The cabinet chief to Argentine President Javier Milei cited oil major Shell as a potential investor in a future liquefied natural gas (LNG) project to be run by the country’s state oil firm YPF, according to newspaper La Nacion.
Cabinet Chief Guillermo Francos said at an event that the major energy company has shown “strong interest” in a potential LNG investment in the country, according to La Nacion.
“We are always exploring opportunities to improve our portfolio,” said Shell’s spokesperson, Cynthia Babski, in an email to Reuters. The company declined to elaborate on its agreements or activities.
The massive $55-billion LNG project led by YPF has already seen significant advances.
The initial phase of the LNG development, originally planned as a tie-up between YPF and Malaysian state oil company Petronas, is expected to reach a final investment decision by the second half of next year, the CEO of the Argentine national producer said earlier this year.
The final investment decision was originally expected for this year, but the partnership between Petronas and YPF has weakened amid disagreements over the project, YPF’s Chief Executive Officer Horacio Marin has said.
The capacity of the first phase would be about 9 million tons per year with first output to come between 2029 and 2030 entirely from floating facilities. A second phase involving onshore facilities would increase the project’s total capacity to up to 30 million tons per year by 2032, according to YPF’s most recent presentation.
Argentina seeks to produce more natural gas from its huge Vaca Muerta shale formation in western Neuquen province, which would allow it to increase domestic supply and eventually export.
Asked for comment on Shell’s interest, a YPF source confirmed Francos’ assessment.
“The interest is real,” the source told Reuters without specifying how Shell’s investment in LNG in Argentina would be made.
Earlier this month, YPF said it continues to seek agreements with oil companies to help build the LNG plant in Rio Negro.
YPF posted a 7% increase in its natural gas production during the third quarter, attributed to progress in Vaca Muerta.
(Reporting by Aida Pelaez-Fernandez and Walter Bianchi; Editing by David Alire Garcia, Lincoln Feast and Diane Craft)
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