Vaca Muerta's Gas Has a New Path to the World

YPF, Eni and XRG sign a binding JDA to advance a 12 mtpa Argentina LNG project, targeting FID in late 2026

9 Jun 2026

YPF, Eni and Abu Dhabi's XRG signed a binding Joint Development Agreement on 12 February 2026 to advance Argentina's most substantive LNG export effort to date. The deal replaced a Shell arrangement terminated the same day, bringing in deeper financial backing through XRG, a subsidiary of the Abu Dhabi National Oil Company. Capacity is set at 12 million tonnes per year, delivered via two floating liquefaction units of 6 mtpa each.

The project connects a dedicated pipeline network to Vaca Muerta, Argentina's vast shale gas formation and the world's second-largest by reserves. Gas production, inland transport, and offshore export infrastructure are integrated under a single development framework, a structural design that prior attempts lacked.

Front-end engineering design has been launched. Commercial and financing workstreams are running in parallel, with the partners targeting a Final Investment Decision in the second half of 2026. "We will now continue working very intensively to reach FID during the second half of 2026," said Horacio Marín, President and CEO of YPF. Eni's Chief Operating Officer Guido Brusco called the project "one of the most promising opportunities in the global gas landscape."

Argentina has historically consumed most of its gas output domestically, importing LNG during winter months, a structural imbalance that large-scale exports would directly reverse. XRG adds both capital access and global LNG marketing reach to a venture that demands both.

Obstacles remain. Financing two floating units alongside dedicated pipeline infrastructure requires sustained lender confidence in a sovereign with a difficult credit history. Environmental permits in coastal Río Negro province and residual currency controls add complexity. Earlier Argentine LNG initiatives stalled at precisely these stages.

The binding nature of the JDA, combined with Abu Dhabi-backed capital and a government explicitly prioritising hydrocarbon exports, sets this effort apart from its predecessors. Whether FID arrives on schedule will determine if Vaca Muerta's gas surplus finally reaches global markets.