Chevron among drillers to feed Argentina shale NGL venture

Chevron Corp and two other major Argentine shale producers will sign contracts this week to supply a natural gas liquids project, a move that all but assures the US$3-billion plan goes ahead, according to people familiar with the matter.

Chevron, the US supermajor that’s eyeing a ramp-up in the Vaca Muerta shale basin, will partner with state-run YPF SA and private energy firm Pluspetrol SA, to sign contracts with TGS SA, a gas company leading the project. It is seen as crucial to avoiding infrastructure bottlenecks in the booming shale patch.

“Chevron confirms it is close to finalising agreements related to a gas processing and natural gas liquids infrastructure project in Vaca Muerta, alongside other industry participants,” the company said in an email.

YPF declined to comment. Pluspetrol declined to comment. TGS didn’t immediately reply to a request for comment.

The three drillers will fill roughly 80 percent of the project’s capacity and signing the contracts is a step that goes hand in hand with TGS giving it the green light, known as the final investment decision, said one of the people.

The project will turn natural gas – much of it so-called associated gas that comes out of oil wells – into liquids like butane and propane for export. TGS will pay for some of the US$3-billion investment itself, with the rest financed by banks that are close to agreeing terms.

The liquids project is one of several processing and pipeline export ventures that are set to turn Argentina’s shale industry into a global energy provider over the coming years.

Chevron’s bet on Argentina goes far beyond the gas liquids project. It recently applied to President Javier Milei’s signature investment programme, which includes tax breaks, for a US$13.8 billion oil drilling venture. It marks some of the most significant US investment in Argentina since Milei took office.