Eni, Abu Dhabi's XRG Join Argentina LNG Project with Vaca Muerta Stakes

Eni has agreed to acquire a 32% interest in three Vaca Muerta blocks that will supply the 12-MMtpy Argentina LNG project, expanding its role across the LNG value chain.

(P&GJ) — Eni has agreed to acquire a 32% interest in three upstream blocks in Argentina's Vaca Muerta shale as part of the integrated Argentina LNG development, strengthening its position in one of the world's largest unconventional gas plays.

The agreement covers the Meseta Buena Esperanza, Aguada Villanueva and Las Tacanas blocks. Upon closing, ownership will be divided among YPF (36%), Eni (32%) and XRG (32%), subject to regulatory approvals.

The upstream acreage will supply the Argentina LNG project, which is designed to produce 12 million metric tons per annum (MMtpy) of liquefied natural gas through two floating LNG (FLNG) units with capacity of 6 MMtpy each.

Eni said the investment expands its integrated gas strategy by combining upstream production with LNG development and international marketing.

"Our entry into the Vaca Muerta unconventional basin, alongside YPF and XRG, strengthens Eni's ability to develop world-scale gas resources and convert them into competitive LNG for international markets," said Guido Brusco, Eni's chief operating officer for Global Natural Resources.

XRG President of International Gas Mohamed Al Aryani said Argentina has the potential to become a significant long-term supplier of LNG to global markets and described Vaca Muerta as one of the world's most attractive gas resources.

"This proposed transaction gives XRG a direct role in helping advance a project with the scale, quality and long-term potential to become a significant new source of reliable LNG supply for global markets," Al Aryani said.

YPF Chairman and CEO Horacio Marín said adding Eni and XRG to the upstream portion of the project strengthens the integrated LNG development as it moves toward the next stage.

"The entry of Eni and XRG into the upstream segment strengthens the project's value chain and allows us to move toward its development on a global scale," Marín said.

The transaction represents another milestone for the Argentina LNG project, which is intended to monetize Vaca Muerta's natural gas resources while positioning Argentina as a long-term LNG exporter.