How Argentina's million-dollar LNG megaproject could accelerate due to the war in the Middle East

In the midst of an international scenario marked by geopolitical tensions and a growing need to diversify energy supply, Argentina is moving forward with one of the most ambitious projects in its recent history: the development of Argentina LNG, the plan led by YPF to produce liquefied natural gas off the coast of Rio Negro together with international partners. As explained by the company's CEO, Horacio Marín, the war in the Middle East and the recent attacks on energy infrastructure could accelerate the expansion schedule of the project, which is already emerging as a regional energy milestone

.

“This is the largest and most complex project in the history of Latin America,” said Marín, referring to the megaproject during a meeting with Argentinian journalists at CERAWeek by S&P Global, the main event in the global energy sector. There, he stressed that development aspires to achieve an unprecedented level of international funding in the region and confirmed that, although there are talks with a new global partner —which, had it been closed, would have been presented during the event—, the initiative can move forward with the current members of the consortium

.

The company behind the project - which already has its own name, although it has not yet been revealed - is currently comprised of YPF, the Italian company Eni and XRG, a firm linked to the Saudi group Aramco, one of the world's largest players in the

hydrocarbons business.

Marín clarified that the entry of a fourth partner is not a condition for moving forward. While he acknowledged that there are advanced talks with an international company, he stressed that the consortium is not actively looking for it. “It's that or nothing,” he said, and explained that any progress will depend on the internal approval deadlines and the technical review of the potential interested party.

In this global context, the executive directly linked the geopolitical situation with the future of the Argentine project. “The project is there and is going. But the war in the Middle East could accelerate expansion,” he said, noting that the conflict increased international demand for liquefied natural gas and reinforced interest in reliable suppliers outside

conflict zones.

This vision was also shared by numerous energy sector actors present at the Houston event, where it was highlighted that companies and consumer countries will seek to diversify the origin of their supplies. In this scenario, due to its strategic location, Argentina is increasingly identified as a solid alternative

.

Marín even remarked that the war generated an unexpected boost for the country. As he explained, the attacks on energy infrastructure—especially in Qatar—knocked out of operation a plant similar to Argentine development and forced the declaration of force majeure for five years in certain contracts in Europe, opening up an unprecedented opportunity

for Argentina.

“This war accelerated Argentina's LNG in a way you can't imagine. I think that the war will strongly boost the expansion of the project from 12 million tons to the additional six million that we are projecting for the second phase,” he said.

This leap would make it possible to position the country as a preferred supplier, with simultaneous access to both the Atlantic and the Pacific.

Record funding for the region The

magnitude of the planned funding confirms the historic scale of the plan. Marín indicated that the objective is to raise USD 15.5 billion for the first phase of the project alone, making it the largest funding for an energy project in Latin America

.

As he explained, this is the “largest project finance scheme in the history of Latin America”, as confirmed by JP Morgan, the bank responsible for structuring international development financing.

The plan states to secure major funding before the end of the year. At the same time, the schedule places the final investment decision (FID) in October and the award of the main tenders before

that date.

In terms of total investment, Marín explained that the cost of mainstream and downstream amounts to USD 20 billion. Of that amount, 70% will be financed through international credits, while the remaining 30% will be covered by direct contributions from partners. The scheme seeks to combine bank financing with guarantees from development banks to extend repayment periods and reduce the overall financial cost

.

Asked about the tender criteria and transparency, the president of YPF emphasized the need to change past practices:
“We have to make everything transparent, standardizing processes and eliminating secondary negotiations. We want the tender process to be instantaneous, public and with clear technical and economic criteria, because in this way we also change the internal culture and give guarantees to all suppliers

and partners.”

In parallel, the executive announced that the original partners are already making progress in negotiating future sales contracts and in the purchase of strategic equipment. Only the vessels needed for the development of the project have an individual cost ranging from USD 2 billion to USD 3 billion

.

Regarding commercialization, Marín confirmed that there are advanced contracts with “very good countries with high purchasing power”. However, the amounts and the buyers are kept in reserve until the final agreements are consolidated. In addition, the project will reserve between 10% and 20% of the volume for the spot market, which will allow one-off sales to countries in the region, such as Brazil, or even cover peaks in domestic consumption

.

Productive expansion and focus on Vaca Muerta

The development of LNG is part of a broader transformation strategy within YPF. In parallel, the company plans to increase crude oil production in Vaca Muerta by adding new drilling equipment

.

According to Marín, the company will operate with 13 rigs during the first half of the year and will add four to five more by the end of 2026.

With this growth, net oil production would reach 250,000 barrels per day in December of this year, compared to 200,000 today.

A large part of this increase will be destined for export through the Vaca Muerta Oil Sur (VMOS) pipeline, which is already growing close to 50%.

At the same time, YPF will continue with its strategic reorganization process, which includes the progressive exit from conventional business. After the sale of emblematic areas such as Behr Springs and other mature assets such as Chachahuen, in Mendoza, Marín confirmed that the company will also move forward with the return of areas in the north of the

country.

“It's not material for YPF. Our goal is to return those areas to the provinces, as we have done in others. We have some assets left, such as Agua Salada and areas in Salta where the company has a stake,” he explained.

The objective, said the executive, is to concentrate resources on higher productivity developments and to open new tenders for medium and small companies. Some of them could be of Brazilian origin, especially since these are gas areas with potential for export to that country, in line with the international energy integration strategy that is now gaining prominence in Argentina

.