He president and CEO of YPF, Horacio Marínassured this Thursday that without the approval of Congress of the Bases Law, which contains the Large Investment Incentive Regime (RIGI)there will be no development for the production and export of Liquefied Natural Gas (LNG), which would require investments about 30 billion dollars until 2031.
“Without RIGI, there is no LNG,” warned the oil executive, who within two weeks will travel to Kuala Lumpur, Malaysia, to speed up the project that YPF is studying with Petronas and that it would have a final investment decision (FDI) in July 2025.
YPF, according to Marín, is thinking about associating the entire oil industry with the “Argentina LNG” mega project, a work that would be the largest infrastructure in the history of the country. For that, you would already have conversations advanced with Pan American Energy (PAE). This was expressed at the VI National Energy Forum of LIDE Argentina at the Alvear Palace Hotel, where she listened to him in the front row. Alejandro Bulgheronipresident of PAE.
In addition, the oil company will also seek the rest of the main gas producers in Vaca Muerta as partners, including Tecpetrol (Paolo Rocca), the company where Marín worked until last year, and Pampa Energy (Marcelo Mindlin). These two companies were studying small liquefied gas projects on their own that they would not be profitable.
Marín positioned Argentina as a potential fifth or sixth LNG exporter in the world in the decade that will begin in 2030, with about 120 million cubic meters per day (MMm3/d) of natural gas, behind the United States, Qatar, Australia, Russia and Malaysia. The demand is in the European Union -Germany, France, Spain-, China and India.
Industry technicians consider that Argentine gas can be competitive worldwide with a price of up to 8 dollars per million BTU at the port exit, which would mean a “wellhead” price of up to US$ 3, which today is perfectly achievable – oil companies obtain high profitability in Vaca Muerta a US $3.50 and contractualized their demand through the Gas Plan until 2028.
Large investment for LNG, buried in pipes, the infrastructure of 3 “dedicated” gas pipelines equivalent to the Néstor Kirchner (GPNK) of Vaca Muerta, the assembly abroad of at least 2 giant ships that transform natural gas into its liquid state – cooling it to 161 degrees below zero to compress its volume 600 times and facilitate its transportation – and even the construction of a deep-water port that could be located in Punta Colorada, Río Negro, or the use of the port of Bahía Blanca, in Buenos Aires, also need great guarantees.
Controversy over the “RIGI”
The RIGI offers a great reduction in the cost of capital for investments greater than US$ 200 million, tax stability with very low taxes, free access to dollars and customs preferences for imports, which would be the only way to make the project profitable, according to the president of YPF.
However, that title of the Base Law is one of the most questioned in the Senate and would return with changes to Deputies, in case of having a medium sanction in general.
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 in detriment of national suppliers“. And they highlighted 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 (Twitter) account that the RIGI “is fundamentally oriented towards investment in primary activities and admits the possibility of importing without any type of tariff any capital goods, spare parts and other inputs without clarifying that these must be new or used, which even gives the possibility of international operators entering already used machinery, generating unfair competition. with obsolete instruments; that is, where there is no transfer of the best international technologywhich is one of the objectives that any incentive regime for large investments must pursue.
“The RIGI dismantles any policy aimed at developing suppliers, stimulating buy argentinian and improve the competitiveness of 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 for production in the country,” Kulfas assessed.
