Key Takeaways
- Chevron, YPF and Pluspetrol are expected to ink contracts for TGS’ $3B Argentina NGL project.
- The partners are expected to take up about 80% of the project’s capacity, lifting FID prospects.
- TGS’ project could support Vaca Muerta growth and Argentina’s push to reduce energy imports.
Chevron Corporation is reportedly set to partner with two Argentine energy players, namely YPF and Pluspetrol, to ink new contracts with Transportadora de Gas del Sur for a natural gas liquids (NGLs) project in Argentina. The contract entails supplying natural gas for the proposed $3 billion project led by TGS.
The report mentioned that Chevron, YPF and Pluspetrol are expected to take up approximately 80% of the project’s capacity. The signing of these contracts significantly increases the likelihood of the project reaching a final investment decision. The project involves converting natural gas, including the gas extracted alongside oil from the producing wells, into high-value liquids such as butane and propane. The higher value natural gas liquids produced can then be exported to international markets.
In recent years, Argentina’s Vaca Muerta shale has gained significant recognition as one of the world’s largest unconventional gas reserves, and several companies, including Chevron, are planning to expand their presence in the shale basin. The liquids project, developed by TGS, is one of many processing and export ventures expected to boost production from the Vaca Muerta shale and help the country become an energy supplier over the coming years.
Notably, these projects will help Argentina reduce its dependence on energy imports and boost foreign exchange reserves. TGS has previously stated that it will finance a part of this multi-million dollar project using its own capital. For Chevron, this deal stands to expand its footprint in Argentina’s booming shale industry and benefit from the shale basin’s significant resource potential.
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