Argentina’s state-owned YPF SA and its Malaysian counterpart Petronas have their eyes on reaching a final investment decision in the second half of 2025 for the South American country’s initial LNG exporting plant on its Atlantic Coast.

The proposed onshore plant slated for the Province of Río Negro would have a capacity of 25 million tonnes per annum (mtpa) to 30 mtpa from 2032 onwards, YPF said in its second-quarter 2024 financial and operational statements.

LNG export capacity would propel Argentina to the top rank in the Latin America and Caribbean LNG exporting space, surpassing Peru’s 4.45-mtpa Peru LNG facility and Trinidad and Tobago’s 14.8-mtpa Atlantic LNG facility.

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The decision to move forward with the project was aided by the recent enactment in Argentina of an initiative regime for large-scale investments, also known as RIGI, YPF CEO Horacio Marin said during the company’s Aug. 9 quarterly webcast with analysts.

RIGI’s main incentives include long-term scope for investments (30 years), tax and customs benefits and gradual free availability for export proceeds, Marin said. Financial and economic uncertainties, from currency controls to high inflation, have long been headwinds for national and international companies in Argentina.

YPF and Petronas had initially planned to build the plant at a port at Bahía Blanca, in the province of Buenos Aires. The new location—decided on in late-July—in Sierra Grande in the province of Río Negro offers some cost-saving advances to the partners compared to Bahía Blanca, Marin said.

“The decision was taken after a deep analysis of technical, economic, environmental, geographic, fiscal [and] regulatory aspects,” Marin said. “In this sense, YPF decided to hire, at its expense, [consultancy] Aguada Toledo, who reconfirmed our analysis conclusions."

Factors influencing the change in location include the shorter distance Vaca Muerta feedgas would travel from the Neuquén Basin to the liquefaction facility. Additionally, the draft in Sierra Grande is deeper than in Bahía Blanca, which would rule out or minimize dredging needed to accommodate large LNG tankers.

Buenos Aires-based YPF expects to own 25% to 30% of the total LNG capacity at the facility, Marin said. And it’s possible that other companies could join the project.

Once completed, the LNG facility will contribute around $15 billion annually to Argentina’s export revenues, significantly boosting the country’s balance of payments, Marin said.