The mega project that YPF has with the state oil company Petronas of Malaysia for Argentina to be an energy exporter pole thanks to the development of Liquefied Natural Gas (LNG) It depends on Congress approving the Large Investment Incentive Regime (RIGI)which is within the law of “Bases and Starting Points for the Freedom of Argentines” that the Government ordered.
The oil industry is waiting for this title of the bill, which has already had half a sanction in the Chamber of Deputies. Any investment project greater than 200 million dollars will have large advantages and stability in terms of taxes, imports and access to the dollar.
Precisely because of the benefits of importing tools, inputs and capital goods without taxes, there is controversy with the Argentine industry, since no type of development program for local suppliers is established nor are quotas set for national content. This would be a disadvantage for those who already produce these goods in Argentina and pay taxes at source.
According to industry sources, the project “Argentina LNG“is the main one that has the energy of the country: investments for about 30,000 million dollars in the next 7 years so that exports also reach US$30 billion per year starting in 2031.
Such an amount of money buried in pipesthe infrastructure of 3 gas pipelines “dedicated” workers equivalent to Néstor Kirchner (GPNK) of Vaca Muerta, the development of at least 2 giant ships that transform natural gas into its liquid state -cooling it to 161 degrees below zero to compress 600 times its volume and facilitate its transport- and even construction of a deep water port which could be located in Punta Colorada, Río Negro, also needs great guarantees.
The RIGI offers a great drop in the cost of capitalwhich would be the only way to make the project profitable, say those who know the negotiations between YPF, Petronas and the rest of the Argentine oil companies that will join in with their gas and investments.
“Without RIGI, no LNG“, they explain. They even point out that by June the Base Law should already be approved, in order to provide sufficient legal certainty so that the final investment decision (FDI) can be made in July 2025. With LNG , Argentina could export the equivalent of 400 LNG ships per year, with about 120 million cubic meters of natural gas per day (MMm3/d).
The Argentine Industrial Union (UIA)after a meeting of its Board of Directors, highlighted this Tuesday the “importance of having a regime that stimulates large investments,” but its authorities “warned that The current configuration could encourage unfair competition to the detriment of national suppliers“. And they stressed the need to “develop value chains to consolidate the productive network, leverage SMEs and generate quality employment in all regions of the country.
The former Minister of Productive Development Matías Kulfas published on his X account (Twitter) that the RIGI “is fundamentally oriented towards investment in primary activities and admits the possibility of importing any capital goods, spare parts and other inputs without any type of tariff without clarifying that these must be new or used, which even gives the possibility of international operators entering already used machinery, generating a unfair competition with obsolete instruments; that is, where there is no transfer of the best international technology, which is one of the objectives that any incentive regime for large investments must pursue.
“The RIGI dismantles any policy aimed at developing suppliers, stimulating Argentine purchasing and improving the competitiveness of the industry and SMEs. Our industries will have to pay import tariffs for certain inputs that those who enter this regime will not have to face, generating gross disincentives to production in the country,” Kulfas assessed.
