The Vaca Muerta formation holds one of the largest unconventional gas reserves globally. The U.S. Energy Information Administration estimates that Argentina ranks second worldwide in technically recoverable shale gas resources, behind only China. Harnessing that resource base through LNG exports has been a priority for successive Argentine administrations seeking to reduce fiscal pressures and earn hard currency.
Investor appetite for Argentine energy assets strengthened after President Javier Milei’s libertarian coalition secured a decisive victory in midterm elections this month. Market participants view the result as a mandate to continue deregulation and pro-market reforms, including the easing of capital controls and the streamlining of energy permitting. YPF’s American depositary receipts surged as much as 38 percent in New York trading following reports of renewed foreign interest in its LNG program.
XRG’s outreach fits a broader strategy to expand its portfolio across Latin America, North America, and Asia. Backed by Abu Dhabi’s sovereign wealth, the company recently acquired a minority position in NextDecade Corp.’s Rio Grande LNG development in Brownsville, Texas, and is pursuing a takeover of German chemicals producer Covestro AG. XRG also evaluated a US$19 billion offer for Australia’s Santos Ltd. earlier this year before withdrawing.
The international expansion by Abu Dhabi National Oil Company aligns with the United Arab Emirates’ plan to deploy oil revenues in strategic sectors worldwide, ranging from energy and technology to consumer and tourism assets. Officials in Abu Dhabi have indicated that partnerships are often facilitated through long-standing diplomatic and commercial relationships with the United States, Europe, and countries with cultural or religious ties to the Gulf region.
Within Argentina, YPF has signaled interest in pursuing multiple LNG pathways. Beyond the floating liquefaction concept backed by Shell and Eni, the Buenos Aires-based producer is evaluating a separate export scheme with Golar LNG Ltd. Chief Executive Officer Horacio Marín recently met with ADNOC Managing Director Sultan Al Jaber in Abu Dhabi to discuss potential collaboration, underscoring the growing links between the two state-owned energy companies.
Despite improved sentiment, several hurdles remain before construction can begin. The consortium must reach a binding investment decision, secure long-term sales contracts, and finalize financing structures. Regulatory clarity on export taxes and currency repatriation rules will also be critical, industry analysts say. Additionally, global LNG supply is expected to increase significantly in the second half of the decade, intensifying competition for buyers in Asia and Europe.
For XRG, an Argentine foothold would complement its existing interests in the United States and could provide optionality in the Atlantic Basin market. For YPF, attracting a capital-rich partner from the Gulf could accelerate timelines and diversify its investor base beyond traditional Western majors.
While negotiations continue, YPF maintains that the floating liquefaction facility remains central to its objective of starting LNG exports before the end of the decade. The company has not released a revised schedule, but executives have said that an initial production capacity of around 5 million metric tons per year could be achieved in the first phase, followed by incremental expansions to reach the planned 28 million-ton figure.
Industry observers will watch whether the talks with XRG progress toward formal terms in the coming months. A successful entry by the Abu Dhabi investor would signal renewed momentum for Argentina’s LNG ambitions and underscore the Gulf’s growing role in shaping the global gas trade.
Crédito da imagem: Oilprice.com
