MercoPress. South Atlantic News Agency

Two more partners join Vaca Muerta Sur project

“The Vaca Muerta Sur pipeline is the key for us,” Marín explained

Shell Argentina and Chevron Argentina joined the Vaca Muerta Sur (VMOS) project as shareholders in the major oil transport infrastructure initiative led by a consortium including the state-owned YPF, Pan American Energy (PAE), Pampa Energía, Vista Energy, and Pluspetrol. “It is the most important oil transport infrastructure project of the last decades,” the consortium said in a statement.

The project involves constructing a 437-kilometer pipeline from the Vaca Muerta oil fields to a new export terminal in Punta Colorada, Río Negro, featuring a loading/unloading terminal with monobuoys and a storage facility. Expected to be operational by late 2026, the pipeline will initially transport 550,000 barrels per day, with potential expansion to 700,000 barrels, requiring an estimated investment of US$ 3 billion.

The initiative seeks to boost the South American country's oil exports, potentially generating up to US$ 15 billion annually, with possible increases to US$ 20 billion through expansions. It is seen as a strategic development for Vaca Muerta and Argentina's energy sector, with YPF also gaining new exploration blocks in Neuquén to further enhance production.

The undertaking has secured US$ 1.7 billion in initial financing and is seeking additional government incentives. Local authorities in thee province of Río Negro are advocating for significant local labor involvement.

The participation of Shell and Chevron in Vaca Muerta Sur was foreseen since late 2024, but it was only made in recent days, it was explained. Other players may join shortly. “Shell Argentina and Chevron Argentina confirmed their option to join the consortium as shareholders,” YPF said in a communiqué.

“The completion of this transportation work is strategic for the development of Vaca Muerta and, together with other initiatives, will allow opening the door to exports to achieve 15 billion dollars of annual income for the country in the next few years, which with its expansions could reach more than 20 billion dollars,” the consortium also reckoned.

“The design of Vaca Muerta Sur will allow transporting up to 550 thousand barrels per day, with the possibility of increasing this capacity to 700 thousand barrels,” the document also mentioned.

In addition, the province of Neuquén allocated to the project four new blocks of land totaling 676.2 square kilometers. “These blocks will allow us to increase production, especially of oil with a focus on exports,” celebrated YPF President Horacio Marín stressed. Two of these blocks are in La Angostura, one in Narambuena, and the last one in Aguada de la Arena.

“The beginning of the works of the Vaca Muerta Sur pipeline is the key for us to accelerate these developments that will allow us to generate a significant contribution of foreign currency for the country in the next years,” Marín also pointed out.