The geology of the world is capricious. Normally, large oil deposits are far from large points of consumption or vice versa. This generates certain costs when bringing oil to the areas where it has the most demand (large cities and large economic powers). This is perfectly fulfilled in Vaca Muerta, the colossal oil site of Argentina that is almost at the other tip of the world (if we look at it from Europe) and far from the US. Moreover, it is also far from the points of consumption of Argentina itself, a country with a huge surface of territory. Therefore, YPF, along with several of the main companies in the country’s energy sector, advances in the construction of the huge South Muerta Muerta pipeline, one of the most transcendental infrastructure of the last decades in Argentina. For the luck of YPF and the rest of the companies involved, on Wednesday two oil giants have announced that they will join to collaborate and contribute all their experience in this pharaonic engineering work.
The American oil company Chevron and La Anglo-Holandesa Shell have announced that they will add as partners to the consortium that builds the Vaca Muerta pipelineIn this way, South Pipeline (VMOS), consortium led by the YPF oil company, controlled by the Argentine State, and also composed of PAN American Energy, Vista Energy, Pampa Energía and Pluspetrol, are incorporated as shareholders.
With an investment of more than 3,000 million dollars, the work will connect the Vaca Muerta training, in the province of Neuquén, with the future maritime terminal of Punta Colorada, in the province of Río Negro. It is expected to be fully operational in the fourth quarter of 2026. The duct, with an extension of 600 kilometers, It will have an initial transport capacity of 550,000 barrels per day of crude oilwith the possibility of expanding up to 700,000 barrels per day, which will significantly increase the volume of exports and competitiveness of the sector.
As YPF reported on a statement, Chevron and Shell will join society through their subsidiaries in Argentina. The VMOS consortium was constituted last December when several oil companies joined YPF for the construction of the pipeline, a work that began in May 2024 and will demand an investment of 3,000 million dollars.
The pipeline will carry the crude extracted from the formation of unconventional hydrocarbons of Vaca Muerta, in the southwest of the country, towards the southern province of Río Negro, to a port terminal on the Atlantic. The project includes the construction of a load and download terminal with interconnected monoboyas and a tank and storage beach in the Punta Colorada area, in Río Negro.
“A strategic work”
“The concretion of this transport work is strategic for the development of Vaca Muerta and, together with other initiatives, will allow to open the door for export with the aim of achieving 15,000 million dollars of annual income for the country in the coming years, which with its expansions could reach more than 20,000 million dollars,” they highlight from YPF.
Currently, the project is in an advanced execution phase. The first section has been completed, which links the Loma Campana area with the Allen pumping station, in Río Negro. At the same time, the preliminary tasks for the construction of the second section have begun, which will transport the crude to the terminal in Punta Colorada. “This work not only optimizes the transport infrastructure of Vaca Muerta, but also positions Río Negro as a strategic node in international hydrocarbons trade,” said Andrea Confini, secretary of Energy and Environment.
THE CONJURA OF THE OILS
In a key milestone for the financing and development of the project, YPF has consolidated an alliance with Pan American Energy, Vista Energy, Pampa Energía, Chevron Argentina, Pluspetrol and Shell Argentina. These companies have pledged an initial capacity of 275,000 barrels per day, with expansion options of up to 230,000 additional barrels. Likewise, the VMOS Public Limited Company, created for the management and operation of the pipeline, It has been incorporated into the regime of incentives to large investments (Rigi)which means an unprecedented institutional support for the materialization of large -scale energy projects in Argentina.
The Secretary Confini emphasized the role of Río Negro as the first province to adhere to this initiative, also underlining the firm commitment of the provincial State in the supervision of the work. “We have strengthened our control mechanisms in the Midstream sector, ensuring that each phase of the project meets environmental and security standards from its beginning. Río Negro will be a fundamental axis in the export of hydrocarbons, but with the certainty that this development will be carried out in a sustainable and responsible manner,” he said.
With the installation of the first sections of the duct already underway and the beginning of the second phase scheduled for the beginning of 2025, the Vaca Muerta Sur pipeline is emerging as an engine of growth for the Argentine economy, with the potential to generate up to 20,000 million dollars annually in exports. The Terminal in Punta Colorada, equipped with monoboyas for the loading of large draft shipsIt will allow a substantial reduction in logistics costs, consolidating Río Negro as a strategic enclave for the export of oil in South America.
With this megaproject in progress, Argentina is heading towards a more robust, competitive and aligned energy future with the demands of the international market, standing at the forefront of the oil industry in the region. Vaca Muerta is the second largest world reserve of unconventional gas and the fourth of oil of this type. The colossal formation, which began to be explored by YPF in 2013, has since received investments for 50,000 million dollars for its development. Connecting it with the Atlantic Sea is key to its future.
This site is key to Argentina and its future. Vaca Muerta is expected to help generate the commercial surplus that will maintain a stable weight when capital control is raised. The production of oil and gas will be increasingly important in Argentina. For 2024, the production of hydrocarbons of Argentina reached values that have not registered for more than 15 years. In oil, the country generated 256 million raw barrels, the largest production since 2003, as revealed from the country’s ministry. For its part, the gas reached 50,726,747 m3, the highest production since 2006. These data are linked to the opportunities offered by the sector in the country within the framework of the economy stabilization process.
The economists of JP Morgan pointed out that Argentine oil can be a reason for joy for the country’s economysomething that has already begun to happen throughout 2024. “Argentina has vast oil and gas reserves (O & g), particularly in the formation of Vaca Muerta, the greatest development of oil and shale gas out of North America. The production of hydrocarbons of the country comes from five basins, being the Neuquén basin (a dead cow) the person responsible for almost 70% of the national production,” explains the experts of the national production, ” American It is believed that Vaca Muerta has about 16,000 million barrels of recoverable crude. This oil could be exported massively generating notable income in dollars for Argentina, which would give an important impulse to an economy is already growing. The GDP grew 3.9% in the third quarter of 2024 in part promoted by the energy sector, which was one of which presented a greater growth.
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