Shell Backs Argentina’s Floating LNG Plan

Shell and YPF launch offshore LNG units to fast-track exports and tap Vaca Muerta’s vast gas reserves.

30 Apr 2025

Shell has partnered with Argentina’s state-controlled energy group YPF to build a floating liquefied natural gas (FLNG) facility off the coast of Río Negro, in a move aimed at fast-tracking gas exports from the Vaca Muerta shale formation.

The agreement, signed in December 2024, is designed to help Argentina enter global LNG markets more rapidly by sidestepping onshore infrastructure constraints. The offshore unit is expected to begin exports of up to 10mn tonnes of LNG per year once operational, with potential for further expansion.

The project will process gas extracted from the Vaca Muerta, one of the world’s largest shale deposits, converting it into LNG at sea. Floating platforms allow for shorter lead times and lower upfront costs compared to land-based terminals, while reducing regulatory and logistical delays.

Shell brings extensive experience in LNG and offshore engineering to the venture, including previous FLNG deployments in other markets. YPF, which holds a significant upstream portfolio in Vaca Muerta, provides local expertise and access to feedstock.

“This is more than a project, it’s a milestone,” said a senior YPF official. “With Shell onboard, Argentina moves closer to becoming a reliable LNG supplier at global scale.”

Argentina has struggled to fully develop its gas export potential due to pipeline limitations and bureaucratic delays affecting land-based terminals. The use of a floating facility allows the partners to bypass inland bottlenecks and adapt more quickly to market shifts.

Analysts say demand for LNG is expected to remain strong in Europe and Asia, where supply security remains a priority following recent disruptions.

However, the project faces risks tied to Argentina’s economic volatility and the technical challenges of offshore operations. Shell’s involvement and a modular design structure are intended to help manage those exposures.

If realised, the joint venture could significantly boost Argentina’s role in global energy markets and offer a model for other producers with underdeveloped infrastructure.