YPF, the state owned oil company of Argentina, and Petronas, the Malaysian state owned oil entity, have signed a deal to construct a liquefied natural gas (LNG) plant and a pipeline to transport the fuel, reported Reuters.
The preliminary agreement was signed by the entities at a ceremony in Buenos Aires in the presence of Argentina President Alberto Fernandez.
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The YPF-Petronas project requires an initial investment of approximately $10bn.
This project will produce 5 million tonnes of LNG during the first year of operation.
However, the companies did not state when the plant is expected to become operational.
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The firms also announced the project will take a decade to finish, and then, it is likely to generate and export up to 25 million tonnes of LNG every year.
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By GlobalDataThe LNG will be sourced from Argentina’s Vaca Muerta shale formation.
Fernandez said: “We’re meeting the objective we set out: to not leave Vaca Muerta’s gas in the ground, extract it as fast as we can, use what we need, and then export and collect profits.”
The deal is a new phase of the partnership between YPF and Petronas.
In 2018, the two firms announced a $2.3bn investment to develop a shale oil block in Vaca Muerta.
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Image: The firms will build a pipeline to transport LNG. Credit: Jim Black from Pixabay.
