YPF CEO Confirms Mid-2026 Final Investment Decision for $20 Billion Argentina LNG Project with Eni and ADNOC's XRG

Horacio Marín, CEO of Argentina's state-controlled energy company YPF, has announced that a final investment decision (FID) is expected by mid-2026 for a significant $20 billion liquefied natural gas (LNG) project. This ambitious undertaking, known as the Argentina LNG (ARGLNG) project, involves key partners Eni and ADNOC's XRG unit, with each expected to hold approximately a third of the equity.

Project Scope and Capacity

The initial phase of the ARGLNG project is designed to achieve a production capacity of 12 million metric tons per year (mtpa) of LNG. The overall vision for the YPF-led components of the project aims to reach a total capacity of 18 mtpa, with the broader multi-phase initiative potentially expanding to 30 mtpa by 2030. The project will involve the production, processing, transportation, and liquefaction of natural gas, primarily utilizing floating liquefaction units (FLNGs).

The natural gas for this venture will be sourced from Argentina's vast Vaca Muerta shale formation, which holds significant unconventional gas reserves. The liquefaction facility is slated for development in Sierra Grande, located in the Río Negro province.

Partnerships and Evolution

While Eni and ADNOC's XRG unit are confirmed as central partners for the 12 mtpa phase, the project's partnership structure has seen recent changes. Previously, Malaysian energy group Petronas was involved in a $30 billion LNG project with YPF, but their participation in the main LNG project has concluded, though they continue collaboration in other areas. Additionally, Shell was part of a separate phase of the Argentina LNG project but has since withdrawn due to a significant change in the project's scope, which saw its planned role reduced from 12 mtpa to 6 mtpa. YPF is actively seeking a new partner to fill this vacant position.

Timeline and Economic Impact

Following the anticipated FID in mid-2026, exports from the 12 mtpa phase of the project are projected to commence in 2030 or 2031. To secure the necessary capital, YPF plans to engage JP Morgan in early 2026 to seek project financing, which typically covers 70% to 80% of such large-scale developments.

The project holds substantial economic promise for Argentina. Horacio Marín has stated that the initiative could position Argentina as the fifth largest LNG producer globally and is expected to contribute an estimated $15 billion annually to the country's balance of payments. In terms of market competitiveness, Argentine LNG exports to Asia are considered more favorable than those from the U.S. to Asia, though less competitive compared to U.S. exports to Europe.