Vaca Muerta Gets the Infrastructure It Has Been Waiting For

Pipeline expansion aims to lift capacity from Vaca Muerta and cut reliance on LNG imports

16 Dec 2025

Argentina has awarded a long-awaited expansion of a key gas pipeline, a move that could ease transport constraints that have long limited output from the Vaca Muerta shale formation.

The roughly $700mn project will expand the Perito Moreno gas pipeline, which links shale fields in western Argentina with the country’s main demand centres. Transportadora de Gas del Sur won the government-led tender to add about 14mn cubic metres a day of capacity. Once completed, total throughput is expected to rise to about 35mn cubic metres a day from roughly 21mn, according to industry estimates cited by PGJ Online.

Infrastructure has lagged behind production growth in Vaca Muerta, one of the world’s largest shale gas resources. In recent years, rising output has repeatedly run into pipeline limits, forcing producers to curb activity even as Argentina increased imports of liquefied natural gas during winter demand peaks.

The new project aims to address that imbalance. Rather than building a new pipeline, the expansion will rely on additional compressor stations and upgrades along the existing route. Pipeline Technology Journal said this approach would lower costs, shorten construction times and reduce permitting risks, while still delivering a material increase in capacity.

Project costs have risen since early planning stages. Initial estimates were closer to $500mn, but the final award came in higher. Industry sources attribute the increase to inflation, a clearer definition of the project scope and pressure to complete the work on schedule.

Analysts say the added capacity could support dozens of new wells and allow producers to maintain more stable, year-round drilling programmes. More predictable supply would benefit power generators, industrial users and households, while reducing the need for costly LNG imports and easing pressure on public finances and foreign currency reserves.

Challenges remain. Financing conditions and regulatory stability continue to influence investor appetite, and sustained production growth could create new infrastructure bottlenecks later in the decade.

Still, the pipeline award marks a shift in Argentina’s shale strategy. By prioritising transport capacity, the government is seeking to align infrastructure more closely with the ambitions of Vaca Muerta’s gas producers.