YPF Pushes for Massive Offshore LNG Terminals to Export Vaca Muerta Gas
Argentina’s domestic market can no longer absorb Vaca Muerta’s gas output. YPF is negotiating offshore liquefaction terminals to ship LNG to Europe and Asia.
Argentina’s domestic gas market has become too small to absorb the growing production from Vaca Muerta. In response, YPF is negotiating the construction of offshore liquefied natural gas (LNG) terminals that would transform natural gas into liquid form and export it to Europe and Asia.
Last week, YPF President and CEO Horacio Marín met with two potential builders of these massive floating liquefaction vessels (FLNGs), each costing around US$3 billion. The global LNG market has expanded rapidly in recent years, but there are still few players—only eight liquefaction vessels are currently operating worldwide. This technology cools natural gas to –162 °C, shrinking its volume by 600× and converting it into liquid.
From Onshore Plans to Offshore Strategy
YPF had initially considered building an onshore LNG plant in Río Negro, but shifted to the offshore alternative to mitigate investment risk in Argentina.
The company has signed agreements with Shell and Eni to explore this investment, while also negotiating with two leading FLNG manufacturers: China’s Wison New Energies and South Korea’s Samsung.
Wison’s Track Record — and the Tango FLNG Precedent
Wison is already known in Argentina. Its first-built vessel was the Tango FLNG, which was stationed in Bahía Blanca in 2019 when YPF leased it from Belgian company Exmar to test Argentina’s first LNG exports.
The timing proved poor: despite a 10-year contract, the 2020 pandemic collapsed international LNG prices, and YPF terminated the contract, paying a US$150 million settlement. Two years later, prices surged due to the Russian invasion of Ukraine, but the barge had already departed.
Founded in 1997, Wison delivered its second FLNG last month—the Nguya FLNG—to Eni, with a capacity of 2.4 MTPA (about 11.5 million m³/day). It will be deployed in the Republic of the Congo. The vessel took 33 months to build, cost US$2 billion, and measures 376 m long, 60 m wide, and 35 m deep.
Wison is also building a third FLNG (1.2 MTPA) for Indonesian conglomerate Genting. By contrast, the Tango FLNG has only 0.5 MTPA and is currently leased by Eni for operations in Congo.
YPF Aims for the Largest FLNG Ever Built
YPF is targeting a 6 MTPA FLNG—twice the size of Wison’s recent delivery and the largest in the world, as no such vessel currently exists.
- Estimated build time: 46 months
- Propulsion: no engine; would need to be towed
- Transit: roughly 6 months from China to Río Negro
According to Wison commercial manager Xiaogang Liu, the company is investing in R&D for large-scale offshore liquefaction. The concept is to perform certain gas pre-treatments onshore, leaving only liquefaction modules on board. Wison is collaborating with U.S. firm Chart Industries to deploy its patented LNG technology. “For large-scale projects, we believe YPF could become our first customer,” Liu said at Gastech in Milan.
Liu added the project could be financed by Chinese development banks, noting Wison’s existing banking relationships. “We received a formal request in 2024 and submitted our proposal. We hope to start the project in 2026.”
Samsung Also in the Race
In parallel, YPF is in talks with Samsung, which has already delivered three FLNGs:
Samsung is currently building two more units for Pembina Pipeline (Canada) and another for Petronas.
Global LNG Demand Set to Surge
According to Shell’s latest LNG outlook, global LNG demand will rise by 60% by 2040, driven by Asian economic growth, industrial and transport decarbonization, and the energy needs of artificial intelligence.
Argentina LNG, led by YPF, envisions multiple 6 MTPA FLNG units. YPF is discussing adding one vessel with Shell (initial expectations were two) and two with Eni. The state-controlled company expects updates by the end of October. If all three projects advance, Argentina would add 18 MTPA of export capacity—about 81 million m³/day—equivalent to 54% of current national gas production.
Argentina’s LNG Debut Set for 2027
Argentina is slated to formally enter the LNG export business in 2027, when the first of two liquefaction vessels chartered by Southern Energy (SESA) arrives. SESA’s shareholders are Pan American Energy (30%), YPF (25%), Pampa Energía (20%), Harbour Energy (15%), and Golar LNG (10%).
- First vessel: Hilli Episeyo — arrives 2027 — 2.45 MTPA
- Second vessel: MKII — arrives 2028 — 3.5 MTPA
Within three years, Argentina could export nearly 6 MTPA (27 million m³/day) of gas.