Argentina’s state-owned oil and gas company YPF has ditched plans to build an onshore liquefied natural gas (LNG) plant in Río Negro province, opting instead to manufacture six ships with liquefaction units. 

YPF was slated to build a plant with Petronas, but the Malaysian state-owned energy giant pulled out last December. The ship project, known as “Argentina LNG,” will likewise be located in Río Negro.

The floating LNG project will involve constructing six units in three phases. 

Phase 1

Planned capacity of 6 million tonnes per year (MTPA)

Final investment decision due this year. 

YPF would hold a stake of between 20 and 30%. 

The other investors are U.S. Pan American Energy (PAE) and Norway’s Golar. 

Scheduled for completion between 2027 and 2028.

Phase 2

Planned capacity: 10 MTPA

YPF stake: 30-35%

British multinational oil and gas company Shell as a strategic partner

Completion in 2029 or 2030

Phase 3

Planned capacity: 12 MTPA

YPF stake: around 25%

Italian energy multinational Eni as partner

Completion in 2028 or 2029

Floating LNG facilities, or FLNGs, are specialized vessels that convert natural gas into LNG at sea. The LNG is then transferred to LNG carriers for global distribution.

The first version of the initiative was to have three phases: two floating liquefaction units with capacity of 5 MTPA each, followed by an onshore modular liquefaction plant, then an plant expansion with new liquefaction trains for an additional 10 MTPA.

However, the plan was scratched as soon as Petronas abandoned the project, and YPF ruled out building an onshore LNG plant, a YPF spokesman told the Herald. “Everything indicates that floating units are better,” he said. “Less cost, faster, and more flexibility to scale the project up.” 

The decision was made public on Thursday, in an article in the newspaper Río Negro.

Río Negro Governor Alberto Weretilneck said in a Thursday statement that the decision not to build an onshore plant “does not mean any change in the investments planned from the outset with this megaproject for our province.” 

“Río Negro continues to generate the necessary conditions for these projects to be developed, positioning us in the center of the scene at a national level in terms of LNG exports,” he added.

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