XRG, Adnoc's international energy investment unit, and Italy's Eni have signed agreements with Argentina’s YPF to acquire stakes in three upstream blocks to supply a new liquefied natural gas project in the South American nation.
XRG and Eni will each buy a 32 per cent interest in the three upstream blocks, with YPF retaining the remaining 36 per cent, XRG said in a statement on Monday.
YPF operates the Meseta Buena Esperanza, Aguada Villanueva and Las Tacanas upstream blocks in the unconventional Vaca Muerta basin, onshore in Argentina.
The upstream blocks are expected to form a core part of the integrated 12 million tonnes per annum (mtpa) Argentina LNG project.
XRG, Eni and YPF signed an initial agreement to develop the integrated LNG project in November last year. The Argentina LNG project combines upstream gas production from the Vaca Muerta shale basin with offshore liquefaction using floating liquefied natural gas technology.
The upstream assets are expected to supply the gas volumes needed to feed floating LNG units, while also supporting the monetisation of condensates associated with gas production, XRG said.
“Argentina has the potential to play an increasingly important role in meeting the world’s growing demand for natural gas, and projects such as Argentina LNG will be important to unlocking that opportunity," said Mohamed Al Aryani, president of international gas at XRG.
"Vaca Muerta is one of the world’s most attractive gas resources, and this proposed transaction gives XRG a direct role in helping advance a project with the scale, quality and long-term potential to become a significant new source of reliable LNG supply for global markets."
The global LNG market has been hit hard by the Middle East conflict this year, as the Strait of Hormuz, a key waterway for about a fifth of global gas flows, has remained shut for nearly four months. The damage caused to Qatar’s LNG liquefaction infrastructure has also reduced the outlook for global LNG supply growth over the medium term, according to the International Energy Agency (IEA).
The Middle East conflict has already caused the loss of around 120 billion cubic metres of cumulative LNG supply for the period 2026-2030 when considering the combined effect of the near-term supply disruptions and the medium-term implications for supply, the IEA said in its latest quarterly report.
"The losses resulting from the Middle East conflict account for around 15 per cent of the expected global LNG supply over the 2026-2030 period and, as such, will ultimately be offset by the start-up of new liquefaction facilities through the medium term," it said.
Growth plan
XRG has been actively increasing its operations globally and plans to double its asset value over the next decade.
Launched in 2024 as an international lower-carbon energy and chemicals investment company, with an enterprise value exceeding $80 billion, it has acquired stakes in several global gas projects.
XRG’s global gas and LNG portfolio includes interests in Rio Grande LNG in the US, the Absheron offshore gas and condensate field in Azerbaijan and the Offshore Block 1 gas concession and condensate field in Turkmenistan. It has also a stake in the Area 4 concession in Mozambique’s Rovuma basin, including the planned Coral North FLNG and Rovuma LNG onshore development projects.
The latest investment "marks a major step in XRG’s ambition to build a resilient, integrated, and globally scaled gas platform spanning gas, LNG, and chemicals", it said.
Completion of the transactions remains subject to regulatory approvals.
