Argentina’s 272-Mile Vaca Muerta Pipeline 35% Complete, Set to Expand Oil Exports

Argentina’s 272-mile Vaca Muerta South pipeline is 35% complete and expected online in 2026 with 360,000 bpd capacity, eventually expanding to 750,000 bpd to boost exports.

(Reuters) — The construction of a flagship pipeline to transport oil output from Argentina's Vaca Muerta shale region to the coast is 35% complete, the country's head of energy, Daniel Gonzalez, said at a conference on Sept. 30.

The 437-kilometer (272-mile) Vaca Muerta South pipeline by a holding company led by state-controlled YPF will connect Argentina's most important production play with a terminal in Rio Negro, increasing export capacity and solving one of many energy transportation bottlenecks in the country.

"There's absolutely nothing that I can think of that would prevent the pipeline (from being) fully operative one year from today for the initial 360,000 barrels per day," he told oil executives at a conference in Austin, Texas.

The pipeline's total capacity could reach up to 750,000 bpd once its final phase is completed, he said.

Only 5% of resources at Vaca Muerta, the world's fourth-largest unconventional oil reserve and a large source of energy for Argentina's needs, have been developed.

About 40% of production there is currently being exported and 60% sold locally, but the proportion is expected to change as President Javier Milei's market-friendly policies favor more exports, Gonzalez said.

Producers in Argentina must work harder to cut domestic costs if they want to remain competitive, especially compared to more developed shale plays like in the U.S., he said.