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Argentina's state-run energy company, YPF, is reportedly set to merge its liquefied natural gas (LNG) project with a venture developed by Pan American Energy Group and Golar LNG, according to a report by Bloomberg, citing sources.
This strategic move aims to enhance production and exports from Argentina's Vaca Muerta, the world's second-largest shale gas deposit. YPF and Pan American are leading oil and gas producers in the country.
The merger of these two LNG projects is expected to strengthen Argentina's position in the global LNG market, competing with the US and Qatar.
LNG demand is growing in Europe as importers reduce reliance on Russian gas, and in South East Asia, where new buyers seek to decarbonise their energy portfolios.
The report said that Horacio Marin, YPF executive chairman, announced the merger on LinkedIn, with Pan American CEO Marcos Bulgheroni expressing enthusiasm for the collaboration.
Golar executives had previously shown openness to other participants joining the venture, highlighting the potential for further industry partnerships.
Uncertainty surrounds the future involvement of Petronas, which has supported YPF's plans for more than two years.
A Petronas spokesperson in Buenos Aires did not immediately respond to requests for comment, the report said.
Argentina is exploring regional partnerships, initially with Chile and now Brazil, to transport increasing production from Vaca Muerta.
Exporting LNG is a logical next step, although it requires significant investment in infrastructure amid the nation's financial challenges.
According to the report, President Javier Milei, in office for one year, aims to improve Argentina's business climate. His administration introduced a programme offering long-term tax and foreign-exchange benefits, approved by Congress, attracting energy and mining companies.
Pan American-Golar submitted its LNG venture for inclusion on 22 November, according to Economy Minister Luis Caputo.
"YPF joins Pan American and Golar in strategic LNG merger to boost Argentina’s exports" was originally created and published by Offshore Technology, a GlobalData owned brand.
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