Rigi approval
Argentina’s economy ministry accepted the Southern Energy LNG project into its Rigi investment incentives regime.
The initiative was submitted as a long-term strategic export project. Associated production capacity is between 1.5Mt/y and 2.2Mt/y, based on gas availability, according to an economy ministry resolution.
Two liquefaction vessels with a combined nameplate capacity of almost 6Mt/y will be anchored off the coast of Río Negro province eventually. The first, the 2.45Mt/y Hilli Episeyo, is scheduled to start dispatching in late 2027 or early 2028, while the second, the 3.5Mt/y MKII, is expected to be in operation by the end of 2028.
Overall outlay is expected to reach US$7bn over 20 years. Southern Energy has up to two years to deploy at least 20% of the planned investment.
Southern Energy (SESA), the company established to develop the project, is owned by Pan American Energy (30%), YPF via unit Sur Inversiones Energéticas (25%), Pampa Energía (20%), Harbour Energy (15%) and a Golar LNG unit (10%).
To ensure year-round operation of the vessels, a pipeline will be built to transport gas from Neuquén province to Río Negro.
The vessels will require up to 27Mm3/d of natural gas. Pampa Energía said in a statement that it would contribute up to 6Mm3/d, “representing an increase of more than 40% from its current average production.”
Sur Inversiones Energéticas, Pan American Energy and Harbour Energy will also supply gas via 20-year sales agreements.
Rigi projects obtain tax, exchange, customs and regulatory stability benefits.
Argentina’s federal energy department recently issued a certificate that authorizes Southern Energy to export LNG freely.
Mendoza
Mendoza province is due to get an oil and gas acreage auction underway in June.
BNamericas had reported recently that such a process was planned.
Officials plan to offer 15 areas, comprising 12 exploration blocks and three exploration areas, in the Cuyana and Neuquén basins.
The Mendoza provincial government said in a statement that “These new calls will fall under the innovative continuous bidding model, which Mendoza has been consolidating in recent years to ensure agility in granting concessions and to attract investment with less bureaucracy.
“This Mendoza model also offers advantages, such as the elimination of the windfall profit levy and of the extraordinary production levy, which eases the tax burden on companies and encourages reinvestment in field development.”
The exploration areas are Zampal and Puesto Pozo Cercado Occidental (Cuyana basin); Atuel Norte Exploración, Atuel Sur Exploración, Boleadero, Calmuco, Chachahuen Norte, CN III Norte, Los Parlamentos, Ranquil Norte, Río Atuel and Sierra Azul Sur (Neuquén basin).
The extraction areas are Puesto Molina Norte, Puntilla del Huincán and El Manzano (Neuquén basin).
Last year, Mendoza saw production of conventional oil climb 1% to 20.6Mb, in a context where the bulk of upstream investment was pumped into nonconventional assets in neighboring Neuquén province, which sits over the lion’s share of the Vaca Muerta shale play. Mendoza also awarded five new oil blocks, with US$30mn in investment committed over a three-year period.