YPF abandons the idea of ​​building a LNG plant on the ground and replaces it with ships

The gas export market in Argentina advances with increasing companies that take advantage of the surplus of production of high temperatures for Sell ​​molecules to Chile, Uruguay and Brazil. For now, however, they are operations done through gas pipelines.

In parallel, The sector is designing the arrival of several liquefaction shipswhich allow transforming the gas from its natural state to liquid to expand the sales horizon to other markets.

While YPF’s original idea was to build a liquefaction plant in the town of Sierra Grande, in Río Negro, this plan turned in the installation of liquefied natural gas ships (LNG). “Instead of being a plant on land, there are several plants offshore (offshore)”Said the president and CEO of YPF, Horacio Marín.

The oil company said the ultimate goal remains the same: that Argentina exports 30 million tons per year (MTPA), equivalent to 141 million cubic meters (m3/d) natural gas by 2030. This means doubling the current production of the country’s gas and increasing Argentine exports by US $ 15,000 million within five years.

The acquisition of LNG ships offers several advantages with respect to the construction of the plant on land. On the one hand, It gives greater flexibility to the export project, because it allows you to climb little by little. Besides, is easier to financesince only building the plant would imply paying at least US $ 3000 million.

“Before it was uncertain to know if they were plants on land or coast outside, but ship construction is more competitive and cheaper. In addition, there is more precision on the delivery date, because they are key -key contracts. This is important because more surrender can be given to offtakers [clientes]”, They said in YPF.

At the moment the commercial production of a first LNG ship for the beginning of 2027 is already confirmed. This is the project that led Pan American Energy (PAE) -The company directing the family Bulgheroni– Together with the Norwegian Company, owner of the technology.

For this, a new company was established, Southern Energyof which other producers were buying portions. Shareholding is made up of PAE (40%), Pampa Energía (20%), YPF (15%), Harbor Energy (15%) and Golar LNG (10%).

This first liquefaction ship, called Hilli episeyoit will have a production capacity of 2.45 MTPA of LNG, equivalent to 11.5 million m3/d gas.

Going, in addition, is building another similar ship with a capacity of 3.45 mtpa, which could be available by the end of 2027. This would allow export capacity to 27 million m3/d In three years, which means 20% of national production.

YPF, in turn, You are working to build four additional LNG ships in China: Two would be together with the Italian company Eni And the other two, with the Angloholandea Shell.

The entire project would imply an investment of at least US $ 22,000 millionwhich also includes the construction of treatment plants and the rest of the necessary infrastructure, according to the last presentation it made Marínbefore investors in the New York Stock Exchange.

In case of advancing with all these projects, It will need to build three gas pipelines more similar to the expert Moreno (formerly called President Néstor Kirchner), from the Neuquina basin to Río Negro. The 36 -inch and 573 kilometers long duct demanded an investment of US $ 2700 million in 2023.

In the short term, and although they are still small volumes, more and more companies They are taking advantage of the existing infrastructure to sell gas to Brazil through Bolivia. After the advertisements of Totalenergies and Tecpetrol, Pluspetrol He also confirmed that he made the first shipment to the country governed by Lula da Silva.

For now, they are tests to know the neighbor market, attract customers and Negotiate with Bolivia the “toll” charged for using its gas pipelines to get to San Pablo. Companies take advantage of the production surplus before the low temperatures arrive and the local market increases their demand (winter is expected to stop shipments to supply the highest domestic consumption).

The exported volumes are barely 700,000 m3/d, less than 4% of the total production, which in February was 145 million m3/d. But It is a first step to know the Brazilian market, which was used to supply Bolivia reserveswhose deposits in recent years entered a strong decline.

“It was a test what was done, you still have to get to Brazil with more competitive prices and you have to travel 5000 km of pipelines”Said one of the companies, which referred to the minimum export price that still governs the government of Alberto Fernández.

Through a resolution of the Ministry of Energy, The previous administration set the minimum export valuewhich is equivalent to 5.5% of the price of the Brent, the international price of oil barrel. To this are added firm transport costs (not interruptible).

This is equivalent to a value around US $ 4.5 per million BTU (English measure used in the sector). To have a reference, in Argentina less than US $ 3 per BTU is paid on average.

Another of the challenges forward is to make the contracts “firm”, that is, not interruptibleas is currently. This condition forces exports to be cheaper.

At the moment, Only Pluspetrol managed to sign a firm contract for 3.5 years with Uruguaybeing awarded to be the main supplier of the state Acap, from May to December 2028. In the winter months the firm volumes reach 400,000 m3/d peaks, while the average in the summer period is approximately 200,000 m3/d. The delivery is on the Argentine-Uruguayan border, at the measurement points of the gas pipeline Link and in the Columbus Chamber of Entre Ríos.

Also, although progress was made with the reversal of the direction of flow of the Northern Gas Pipeline, which is used to bring Vaca Muerta to Bolivia, It is still necessary to invest in the construction of additional capacity. In fact, the awarding of the project is still pending to expand the Perito Moreno gas pipeline, which TGS designed.