Darunrat Wongsuvan/Shutterstock Save for later Print Download Share LinkedIn Twitter YPF and Petronas have advanced plans for a major LNG export project in Argentina by signing a land lease agreement with the Port of Bahia Blanca. Like many nations around the Atlantic Basin, Argentina would like to seize upon the gas supply opportunities that have opened in the wake of the war in Ukraine.Land LeaseThe Port of Bahia Blanca, located in the Buenos Aires province, announced the signing of the land lease deal on Feb. 28 and said the agreement is valid for six months.The lease deal comes five months after YPF and Petronas announced that they are collaborating on the development of a mega LNG export terminal with a liquefaction capacity of up to 25 million tons per year. Argentina's President Alberto Fernandez has also called for the rapid development of LNG exports.The Argentine and Malaysian firms will now carry out technical, economic, maritime, soil and environmental studies to determine how to make the LNG project as competitive as possible. The pair hope to sign a long-term land lease following the studies.Road to FIDYPF is hoping it can take a final investment decision on the project before the end of 2023, the company’s CFO Alejandro Lew said during YPF’s third-quarter 2022 results call in November.The deadline looks rather ambitious as Lew said a pipeline build-out is required to get the necessary volumes of feed gas from the giant Vaca Muerta shale play.“Clearly, the government, and through the Nestor Kirchner pipeline, is taking care of the debottlenecking of Vaca Muerta to fully supply local consumption needs,” Lew said.“But then if we manage to move forward with the [export] project," that will require additional pipeline capacity and further evaluation of the increased natural gas production needed to supply a potential LNG plant, YPF’s CFO added.Financing the project, costing an estimated $10 billion, could also be a hurdle. Previous Stints as an ExporterYPF’s push to launch a large-scale LNG export project comes after several unsuccessful stints as an LNG exporter. The company leased a floating liquefaction unit from Exmar for a 10-year period and exported first LNG from the Tango LNG project in late 2019. Exports ceased in May 2020 amid the coronavirus pandemic which led to widespread demand destruction and lower gas prices. The lease for the Tango FLNG unit was subsequently canceled.Argentina had yet another stint as an LNG exporter between 2010 and 2013, according to Kpler data.
