YPF Seals Strategic Pact with ADNOC Arm XRG to Boost Argentina’s LNG Ambitions
YPF has formalized a partnership with global energy powerhouse XRG, a subsidiary of the Abu Dhabi National Oil Company (ADNOC), to advance Argentina’s LNG (liquefied natural gas) export project, in a landmark agreement signed in Abu Dhabi during the 2025 ADIPEC energy conference.
The deal marks a decisive step in the realization of the ambitious Argentina LNG platform, a venture that will integrate Floating Liquefied Natural Gas (FLNG) technology with vast shale gas resources from Vaca Muerta — one of the largest unconventional formations globally. The agreement follows an initial memorandum involving YPF, Italy’s ENI, and XRG, and opens the door for the Arab partner to acquire a formal stake in the project.
The plan outlines a phased development targeting initial LNG production of 12 million tons per year, scalable to 18 million tons annually. The first stage includes deploying two FLNG units, each capable of producing six million tons of LNG annually from Vaca Muerta’s deep shale reservoirs.
“The entry of XRG strengthens a key initiative for Argentina’s energy future. This strategic alliance allows us to advance the development of a world-class LNG export platform that will drive employment, investment, and global positioning,” said Horacio Marín, President and CEO of YPF.
As part of its broader “4×4 Plan”, YPF is aiming to evolve into a global leader in shale production and hydrocarbon exports by 2031. The inclusion of ADNOC’s XRG — with existing stakes in NextDecade’s Rio Grande LNG (USA) and gas assets in Africa, Turkmenistan, and Egypt — adds critical geopolitical heft and technical expertise to Argentina’s emerging gas export capabilities.
This move is set against the backdrop of Argentina’s booming hydrocarbon sector. Vaca Muerta helped propel the country’s energy trade surplus to USD 5.36 billion in the first nine months of 2025, accounting for nearly ninety percent of the national trade surplus. The result was powered by a 13% surge in energy exports alongside a 21% drop in energy imports, according to data from Economía y Energía.
Looking ahead, infrastructure investments — including the successful welding of the Vaca Muerta Sur oil pipeline — aim to boost oil exports by over USD 15 billion annually by 2027, while the LNG initiative could elevate total energy exports beyond USD 30 billion by 2030.
During ADIPEC, YPF CEO Horacio Marín joined OPEC Secretary-General Haitham al-Ghais on a global energy panel. The discussion covered energy transition, AI adoption in oil and gas, and long-term hydrocarbon demand. Panelists reached a consensus: “traditional energy demand remains strong,” with global oil output projected to remain above 100 million barrels per day through 2040.
The LNG consortium now comprises YPF, ENI, and XRG, pending final negotiations. Oil majors Shell and ExxonMobil are also engaged, the latter in talks to enter as an offtaker and potential investor. Industry insiders report that partners are working on equity and international financing structures, aimed at de-risking investment and securing global capital.
Recently, YPF clinched USD 1.2 billion in foreign financing to fast-track infrastructure surrounding Vaca Muerta and the LNG rollout. Companies like Tecpetrol have also tapped into reopened global debt markets, fueled by favorable geopolitical shifts and investor confidence.
In October, Claudio Descalzi, CEO of ENI, and Horacio Marín inked the project’s final engineering agreement in Buenos Aires — one of the last hurdles before the Final Investment Decision (FID). Descalzi estimated overall infrastructure costs between USD 25–30 billion, while Marín projected an additional USD 15 billion for drilling and upstream facilities. Combined, the venture could create about 50,000 direct and indirect jobs.
The infrastructure roadmap includes a 48-inch gas pipeline with a transmission capacity of up to 100 million cubic meters per day, significantly exceeding Argentina’s current daily natural gas output.
“This pipeline will carry 75 million cubic meters per day and could reach 100 million with compressor plants — exceeding today’s total national production,” said Horacio Marín.
Separate from the XRG-led phase, an initial segment of the Argentina LNG project has already hit FID, spearheaded by Pan American Energy (PAE) in partnership with Golar, YPF, Pampa Energía, and Harbour Energy. Scheduled to begin exports in 2027, this phase will utilize two FLNG units in Río Negro with a combined annual capacity of six million tons.
According to Wood Mackenzie, Vaca Muerta stands as the largest unconventional hydrocarbons development outside North America, and is poised to solidify Argentina’s role as a top-tier LNG supplier in the coming decades. Rystad Energy forecasts that FLNG production from the region will hit its peak by the late 2030s, further cementing the country’s global energy position.
Team V.DIR-EM-UAE
