Malaysia’s state-run oil company Petronas and its Argentine counterpart YPF will jointly invest over USD 30bn to build a liquefied natural gas (LNG) plant in Sierra Grande, within the Patagonian province of Rio Negro.
The facility was thought to be earmarked for construction in the Bahia Blanca area in Buenos Aires, Argentina, but a technical and economic evaluation process found that the Rio Negro location offered ‘significant’ advantages.
This includes shorter pipelines to transport natural gas from Vaca Muerta and greater sea depth in Sierra Grande, reducing the need for dredging to achieve a suitable draft.
In a joint statement, YPF and Petronas emphasised Río Negro’s superior economic conditions for the project, even if Buenos Aires matched the tax incentives. According to MercoPress, a report from Arthur D. Little revealed that Río Negro’s potential for a deep-water port to accommodate large “supertanker” ships would significantly reduce transportation costs.
YPF and Petronas aim to attract other oil companies in Argentina’s natural gas sector—such as PAE, Total Austral, Tecpetrol, Pampa Energía, CGC, and Wintershall Dea—into a partnership for large-scale exports, with meetings with potential buyers already scheduled.
The Sierra Grande LNG plant is expected to create numerous direct and indirect jobs, alongside the reactivation of the Punta Colorada port, potentially attracting additional industries to the area.
