By Minener Editorial Team | May 2025
Buenos Aires — Pan American Energy (PAE) has announced plans to bring a second floating liquefied natural gas (FLNG) vessel to Argentina by 2028, marking a major step forward in the country’s LNG export ambitions. The vessel will be part of the Southern Energy consortium, which includes PAE, YPF, Pampa Energía, the UK’s Harbour Energy, and Norway’s Golar LNG.
This second ship, known as the “MKII,” will enable Argentina to reach a total LNG liquefaction capacity of nearly 6 million tonnes per annum (MTPA), equivalent to about 28 million cubic meters per day (MMm³/d). For context, the country’s average gas production is around 140 MMm³/d.
Argentina’s Economy Minister Luis Caputo welcomed the development on social platform X, confirming that the project has received initial approval under the Regime for Large Investments (RIGI). He highlighted the long-term impact: “With both vessels in operation, Argentina could export $2.5 billion in LNG annually for the next 20 years.”
Transforming Vaca Muerta Gas into Global Exports
The Southern Energy project will leverage gas from the Vaca Muerta shale formation. The first FLNG vessel, the Hilli Episeyo (2.45 MTPA capacity), is expected to arrive by late 2027 and will initially use idle capacity on the San Martín pipeline during the summer months.
The second vessel, MKII (3.5 MTPA capacity), currently under construction at a Chinese shipyard, is set to be installed in the San Matías Gulf, Río Negro. Its operation will require the construction of a dedicated pipeline from Vaca Muerta, enabling year-round LNG exports.
The MKII will cool natural gas to -161°C, compressing it by 600 times to enable long-distance maritime transport. Once operational, it will allow for continuous LNG exports regardless of season, securing Argentina’s foothold in global energy markets.
Economic and Strategic Impact
The project represents a total estimated investment of USD $7 billion over 20 years, including both ships and associated infrastructure. According to Southern Energy, it will also unlock further development in Vaca Muerta and catalyze supply chain growth across Argentina’s energy sector.
The shareholder structure of Southern Energy is as follows:
- Pan American Energy (30%)
- YPF (25%)
- Pampa Energía (20%)
- Harbour Energy (15%)
- Golar LNG (10%)
The project has secured key permits, including a 30-year export license from Argentina’s Secretariat of Energy and environmental approval from the province of Río Negro.
New Infrastructure and Local Development
The development of two floating LNG terminals is expected to generate thousands of jobs, boost local supply chains, and introduce advanced production technologies. It also positions Argentina as a new player in LNG exports to global markets currently beyond its reach.
Commercial operations of the Hilli Episeyo are scheduled to begin in 2027, with MKII following in 2028.
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