Argentina GNL Terminal

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Argentina GNL Terminal is a proposed LNG export terminal near Sierra Grande, Argentina.

Location

The proposed terminal would be located in the port of Punta Colorada on Argentina's Atlantic coast, near the community of Sierra Grande, Río Negro province.

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Project details

• Operator: Petronas E&P Argentina SA
• Owner: YPF, Petronas
• Parent company: YPF, Petronas
• Location: Port of Punta Colorada, Sierra Grande, Río Negro, Argentina
• Coordinates: -41.696000, -65.018265 (approximate)
• Capacity: 5 to 30 mtpa
  • Phase 1: 1.2 mtpa
  • Phase 2: 8 to 9 mtpa
  • Phase 3: 15 to 20 mtpa
• Status: Proposed
• Type: Export
• Start year:
  • Phase 1: 2027
  • Phase 2: 2029
  • Phase 3: 2032
• Cost: 10 billion to 30 billion USD
• Financing:
• FID Status: pre-FID (2025)
• Associated infrastructure: Argentina GNL Gas Pipeline

Background

In July 2019 YPF awarded a front-end engineering design (Pre-FEED) contract to McDermott International for the construction of a 5-mtpa LNG Terminal for exporting natural gas from Vaca Muerta. The viability of the terminal was to be dependent on construction of the proposed Vaca Muerta pipeline system, which was scuttled by Argentina's new government in 2020. The exact location of the YPF terminal was not yet specified.

As of May 2022, the Argentine government was again reportedly contemplating construction of a land-based LNG liquefaction and export terminal in Bahía Blanca, with a capacity of 15 to 20 million cubic meters per day, to be supplied with gas from Vaca Muerta via the proposed Nestor Kirchner Gas Pipeline. In response to rising natural gas prices and diminishing global supplies provoked by the Russian-Ukraine conflict, Argentina's Economy Minister Martín Guzmán reportedly discussed the new terminal, estimated to require an investment of US $10 billion, at the International Energy Agency's March 2022 meeting in Paris and at the IMF and World Bank's April 2022 gathering in Washington, DC.

In September 2022, Petronas and YPF signed a memorandum of understanding (MOU) to jointly develop the terminal. Initial investment required to develop the terminal was estimated at $10 billion, with estimated production to start at 5 million tonnes during the first year of operation and eventually climb as high as 25 million tonnes per annum. While no start date was specified for the project, YPF and Petronas estimated that it would take a decade to fully develop. LNG European customers affected by the cutoff of Russian fossil gas supplies continued to be seen as the key market for gas shipped from the terminal.

In March 2023, YPF and Petronas announced that they had signed a tentative land lease deal for the proposed terminal with the port of Bahía Blanca. A decision on whether to proceed with a long-term concession agreement was to be contingent on technical, economic, maritime, soil, and environmental evaluations to be carried out by the two companies over the following six months. Plans called for the LNG export terminal to be developed in conjunction with other supporting infrastructure and services, including upstream gas production, dedicated pipelines, and marketing and shipping services. The port of Bahia Blanca estimated that total investment in the project could rise as high as $50 billion.

Following the November 2023 election of libertarian economist Javier Milei as Argentina's new president, the terminal's near-term prospects appeared jeopardized by Milei's opposition to state subsidies. As of May 2024, YPF's president and CEO Horacio Marín was lobbying for Senate approval of the RIGI (Régimen de Incentivos para las Grandes Inversiones), a government incentive program deemed indispensable for a massive infrastructure investment such as Argentina GNL. The RIGI was approved in late June 2024, creating a new legal framework designed to attract multi-million dollar domestic and international investment in Argentine energy projects.

In August 2024, Petronas and YPF announced that they had decided to locate the new gas liquefaction plant at the Port of Punta Colorada near Sierra Grande (Río Negro province) rather than Bahía Blanca; the cost to develop the Sierra Grande terminal was estimated at US$30 billion. Reports indicated that the reconfigured project might incorporate FLNGs (floating liquefied natural gas facilities). A final investment decision on the terminal was expected in the second half of 2025, with export volume expected to reach between 25 and 30 mtpa by 2032.

The Argentina GNL terminal would be developed in three phases. Phase 1, proposed to come online in 2027, would revolve around Petronas’s existing 1.2 mtpa Satu FLNG. A second phase scheduled for 2029 commissioning would involve the contracting of two new vessels with a total capacity of 8 to 9 mtpa. The third and final phase, with an estimated capacity of 15 to 20 mtpa, would be based onshore, with a start-up date between 2030 and 2032. Gas for the project would be supplied via the proposed Argentina GNL Gas Pipeline.