YPF, Argentina’s state oil company and the largest producer in the Vaca Muerta shale region, is in talks with U.S. Energy Transfer over financing a crucial pipeline through the country, the U.S. reported Bloombergwith reference to sources.
This partnership is crucial to Argentina’s plan to significantly increase shale oil exports.
The project, called Vaca Muerta Sur, is estimated to cost $2.5 billion (2.3 trillion pesos) and is essential for YPF, which needs external financial support.
Energy Transfer, known for its pipeline operations in the US, is evaluating opportunities globally, including this venture in Argentina.
Both companies declined to comment on the ongoing negotiations, the news agency said.
YPF wants to form a consortium with other oil companies in the country that also need more transportation capacity to increase production.
Sources familiar with the matter told the agency that once this consortium is established, the intention is to attract more partners.
The pipeline is expected to increase Argentina’s share of global oil exports and contribute to economic growth.
The country is trying to diversify its export base to build up foreign exchange reserves and limit the impact of recurring economic crises.
With a goal of exporting about 500,000 barrels per day (bpd) of shale oil by the end of the decade, the Vaca Muerta Sur pipeline could have a transformative effect.
Currently, exports from Vaca Muerta are just over 100,000 barrels per day, but this is hampered by logistical bottlenecks and the need for road transport in some areas.
YPF has already started construction of a smaller 128km pipeline to connect the shale fields to the city of Allen in Rio Negro province.
The larger project, which may also involve Energy Transfer, would stretch 271 miles (437 km) from Allen to Punta Colorada on the Atlantic coast, where a new port facility is planned.
In March, YPF announced a $3 billion investment in shale gas extraction as part of the $5 billion capital expenditure for 2024.
“Argentina’s YPF calls for energy transfer financing for major oil pipeline” was originally created and published by Offshore technologya brand of GlobalData.
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