JPMorgan Chase & Co and Banco Santander SA are leading the financing for Argentina LNG, a landmark project to liquefy and export the country’s shale gas reserves, according to people familiar with the matter.
The two banks are spearheading an arrangement of around US$14 billion to US$15 billion, the people said, asking not to be identified discussing private negotiations. The partners on the project – which is estimated to total US$24 billion – continue talks with other lenders, including export credit agencies, to complete the funds, the people said. No final decision has been made, and plans may change, they added.
Argentina LNG is a venture led by state-run YPF SA with Italy’s Eni SpA and Abu Dhabi’s XRG. The three energy firms hold roughly equal equity stakes. The offshore LNG terminal on Argentina’s Atlantic coast would produce 12 million tons a year, making it one of the biggest so-called floating facilities in the world.
The partners are aiming to take a final investment decision in late November, said one person.
JPMorgan didn’t immediately reply to a request for comment. Santander declined to comment. YPF, Eni and XRG declined to comment.
The entire project – a package that includes two floating liquefaction vessels, two cross-country pipelines, and a natural gas liquids plant – is unprecedented in Argentina with a price tag that surpasses the government’s US$20-billion agreement with the International Monetary Fund.
Under the free-market reforms of President Javier Milei, project finance has revived Argentina’s energy sector as shale drillers and pipeline companies hunt for funding for build-outs.
YPF CEO Horacio Marín told analysts earlier this month that all of the Argentina LNG documentation has been prepared for potential lenders to perform due diligence. Frontrunners have already been selected to design, supply and build some parts of the project, Marín said.
A few days after YPF’s earnings call, Argentina LNG applied for Milei’s marquee investor initiative known as RIGI.
by Jonathan Gilbert, Bloomberg
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