Argentina Set to Turn into a Major LNG Exporter with Southern Energy Project

Argentina is poised to enter the global Liquefied Natural Gas (LNG) market in late 2027, with the Southern Energy project leading the charge. This initiative, backed by a consortium of energy companies, represents the largest LNG export deal in Argentina’s history, both in volume and duration, and signals a significant shift in the country’s energy landscape.

The Southern Energy Project: A Collaborative Effort

The Southern Energy project is a joint venture formed by Pan American Energy (PAE), YPF, Pampa Energía, Harbour Energy, and Golar LNG . The project will deploy two floating liquefaction units – the Hilli Episeyo and the MK II – in the San Matías Gulf, located in Río Negro province . A final investment decision (FID) was reached on February 5, 2025, paving the way for the project’s development .

Securing Long-Term LNG Supply for Europe

On December 1, 2025, SEFE Securing Energy for Europe and Southern Energy signed a Heads of Agreement for an eight-year LNG supply deal . The agreement outlines the sale of 2 million metric tonnes of LNG per year, with deliveries commencing in late 2027 . The Hilli Episeyo, with a production capacity of 2.45 million tonnes of LNG annually, will supply over 80% of this volume .

Project Capacity and Potential Revenue

The two floating units combined will have a processing and export capacity of approximately 6 million tonnes per year of LNG, equivalent to 27 million cubic meters per day of natural gas . The committed volume represents more than 30% of the entire project’s capacity. Projected exports over the contract’s lifespan could exceed US$7 billion, dependent on international price fluctuations .

Argentina’s Growing Role in the Global Energy Market

This deal is a key step for Argentina in expanding its role in the global LNG market, leveraging the potential of the Vaca Muerta shale formation . The project is expected to provide a steady stream of foreign currency and contribute to Argentina’s ambition to become a significant exporter of natural gas. The recently enacted ‘RIGI’ legislation provides investment incentives, including the dollarization of revenues after three years of production .

Key Personnel Involved

The signing of the Heads of Agreement was led by Rodolfo Freyre, chairman of Southern Energy, and Frédéric Barnaud, chief commercial officer of SEFE . Also present were representatives from the partner companies: Marcos Bulgheroni (PAE), Santiago Martínez Tanoira (YPF), Horacio Turri (Pampa Energía), Martín Rueda (Harbour Energy), and Federico Petersen (Golar LNG) .

“It will be the first large-scale LNG sale from Argentina and marks a milestone for the future development of Vaca Muerta’s natural gas reserves,” stated Rodolfo Freyre, chairman of Southern Energy .