YPF and partners negotiate multibillion-dollar financing for Argentina LNG megaproject

YPF and its international partners are advancing negotiations to secure financing of between $14 billion and $16 billion, according to the outlet Hoy Día. The funds will be used to support the infrastructure of the Argentina LNG megaproject, an initiative aimed at exporting liquefied natural gas.

The original report, compiled by the newspaper El Nacional, indicates that the overall plan for private investment in natural gas in the South American country will reach $51 billion. The joint project involves the state-owned oil company together with Italy's Eni and XRG, the investment arm of Abu Dhabi National Oil Company.

The operational core of the initiative calls for installing two floating liquefaction units with a combined capacity of 12 million tons per year, in addition to the full network of transport and processing infrastructure required. This deployment seeks to radically transform the national energy profile, moving from a seasonal importer to an emerging global supplier with main destinations in the markets of Asia and Europe.

The viability of such a bet rests on the productive takeoff of Vaca Muerta, the unconventional formation that accounted for 91% of Argentine gas exports during the first half of the year. In that period, exported volume reached 12,812 million cubic meters out of a total authorized volume of 14,027 million.

The financial context in which the operation is taking shape shows a favorable trend in international markets over recent months. The emerging-market bond index compiled by J.P. Morgan reflected a compression in the yield spread on Argentine debt, falling from a peak of 588 basis points in March to 419 basis points in July, its best level of the year before the close of the period.

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