Argentina Negotiates $17 Billion to Export LNG from Vaca Muerta

Argentina is negotiating close to $17 billion in financing with international banks for two liquefied natural gas (LNG) projects that aim to export Vaca Muerta gas at scale, according to Bloomberg Línea reporting from August 27. The figure combines a $900 million credit facility on the verge of closing and a debt package of up to $16 billion under review.

The larger financing challenge belongs to Argentina LNG, the joint venture between state-owned YPF, Italian major Eni, and XRG, the international energy investment arm of Abu Dhabi's ADNOC. The project, filed under Argentina's Large Investment Incentive Regime (RIGI), carries an estimated total investment of approximately $51 billion and is examining a debt structure of between $14 billion and $16 billion, according to Bloomberg Línea. JPMorgan and Santander are leading financing of up to $15 billion for Argentina LNG, according to Bloomberg. Further along in the process is Southern Energy, a consortium comprising Pan American Energy (PAE), YPF, Pampa Energía, Harbour Energy, and Golar LNG, which is hours away from closing $900 million for the dedicated San Matías Pipeline, which will carry gas from Neuquén to the Río Negro coast.

The Southern Energy credit is structured as a project finance transaction, in which banks assess the asset's future revenue-generating capacity. Citi, JPMorgan, Itaú, and Santander are participating in the process, with the option to add five more institutions. The partners will contribute an additional roughly $400 million in equity. The progress of both transactions will reveal what conditions major banks now require to commit long-term capital to energy infrastructure in Argentina. For Argentina LNG, the debt-to-equity split has yet to be defined; the financing structure's alternatives include international financial organizations and export credit agencies to backstop equipment and technology contracts.

The next milestone is the closing of Southern Energy's financing, which the San Matías Pipeline vehicle expects to finalize in the coming days. The outcome will provide the first benchmark for the terms that major banks now require to finance the infrastructure that will turn Vaca Muerta into an LNG export platform.

This article was written with artificial intelligence assistance, drawing on verified sources, and reviewed by a human editor before publication.