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.
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.
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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The 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.
Image: The firms will build a pipeline to transport LNG. Credit: Jim Black from Pixabay.