How much oil and gas Argentina’s fast-growing Neuquén basin may produce by 2035

Bnamericas Published: Wednesday, October 05, 2022

Annual oil and gas production growth at Argentina’s Neuquén basin – chiefly driven by existing projects – is forecast to spike this year and next and then trend down through 2035.

That is according to a report from consultancy Wood Mackenzie, whose projections are based on current output and confirmed investment.

By 2035, oil production is expected to reach around 560,000b/d, while gas production is expected to register at just over 4.0Bf3/d (billion cubic feet per day), the equivalent of 120Mm3/d (million cubic meters per day).

The basin’s Vaca Muerta unconventional formation is driving output growth. Vaca Muerta oil and gas climbed 49% and 33% year-on-year in July, to 38,300m3/d (240,899b/d) and 55.2Mm3/d, respectively, according to data from the General Mosconi energy think tank.

Overall basin oil output was 55,500m3/d, up 24.8% year-on-year, with gas registering at 97.5Mm3/d, up 14.0% year-on-year.

State hydrocarbons company YPF is the biggest player, with private firms Pampa Energía, Vista Energy, Pan American Energy, Pluspetrol and Tecpetrol among the other main actors. Operators have announced plans to ramp up production, with oil firms being tempted by favorable export prices

Midstream oil and gas projects are underway to help lever open a dispatch bottleneck at the Neuquén basin.

The pace of hydrocarbons output growth there could change, depending on how quickly midstream infrastructure is built, Adrian Lara, Wood Mackenzie principal research analyst, Latin American upstream oil and gas, told BNamericas.

Wood Mackenzie forecasts are regularly updated as upstream and midstream developments are confirmed.

Colleague and research associate Vinicius Diniz Moraes added: “We need to be able to understand how fast projects grow, and this is directly dependent on infrastructure capacity.

“There’s no geological risk there … it’s a matter of unlocking this potential. It all comes down to infrastructure.”

Greenfield midstream projects the Vaca Muerta gas pipeline and the Oldelval oil duct are scheduled to become operational next year along with an Argentina-Chile oil export duct currently being de-mothballed. The Vaca Muerta duct, if compression plants are built as planned, is forecast to expand basin-Buenos Aires dispatch capacity around 20Mm3/d in a first phase, taking it to about 95Mm3/d.

In parallel, some 15Mm3/d of processing capacity is forecast to enter service by the end of next year. 

Oldelval’s new oil duct is expected to double its basin-Buenos Aires oil dispatch capacity to 72,000m3/d (452,866b/d), while the export pipeline can carry up to 110,000b/d. An unconfirmed project, announced by YPF, comprises a new oil pipeline connecting the basin to planned new export infrastructure in Río Negro province. 

The Argentine government recently announced plans to contract additional gas to fill the new Vaca Muerta pipeline, via incentives scheme Plan Gas. 

Lara said operators would likely open the taps further at existing concessions. 

“We don’t think new projects are going to be developed because of this new scheme, rather existing projects will have ability to ramp up production,” Lara said. “The acreage is there; the productivity is there.”


Argentina exports gas via pipeline, primarily to neighbor Chile, and establishing an LNG-exporting industry is often cited as the next major step.

A second phase of the Vaca Muerta gas pipeline would expand dispatch capacity to Buenos Aires by a further 20Mm3/d, seen as helping open the door for LNG export projects. 

Lara said the prospects of Argentina getting LNG export infrastructure had improved since the global gas supply crisis and price boom, but that it was still unclear whether investment would flow.

“It’s more likely than before, but, in our view, not something that’s guaranteed,” Lara said.

Companies eyeing LNG liquefaction opportunities in Buenos Aires include YPF, which has an existing project and is looking at options in partnership with its Malaysian counterpart Petronas. The firms are also exploring transport projects. Economic feasibility is the key consideration. 

Local gas transporter TGS and US energy logistics firm Excelerate also have a joint project in the province. 

Argentine hydrocarbons firm Tecpetrol is considering a plant in Río Negro, according to Bloomberg.

Local hydrocarbons firm CGC and an Argentine energy lawyer said recently that gas could be piped to Chile and converted into LNG there and then shipped on by sea. Existing gasification infrastructure would need converting.

Argentina’s gas is exported to Chile via several pipelines, with the main one being the 10.5Mm3/d GasAndes duct linking the Neuquén basin with Santiago Metropolitan region.

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