Southern Energy Partners Reach FID for FLNG Export Project in Argentina
May 2, 2025
Pan American Energy and its partners Pampa Energia, Harbour Energy, YPF, and Golar LNG have taken the final investment decision (FID) for the Southern Energy floating liquefied natural gas (FLNG) export project in Argentina.
The Southern Energy FLNG project which envisages deploying two of Golar LNG's FLNG vessels - the Hilli Episeyo and MK II - off the coast of the Rio Negro province.
The project is expected to have processing and export capacity of around 6 million tonnes per year of LNG, equivalent to 27 million cubic metres per day (or 1.0 billion cubic feet per day) of natural gas.
The FID marks the fulfilment of all conditions precedent for the 20-year re-deployment charter of the FLNG Hilli Episeyo. In addition, Golar LNG and Southern Energy have signed definitive agreements for a 20-year charter for the MKII FLNG, currently under conversion at CIMC Raffles shipyard in Yantai, China.
The MKII FLNG charter remains subject to FID and the same regulatory approvals as granted to the FLNG Hilli project, expected within 2025.
The Southern Energy partners comprise operator Pan American Energy with 40% stake, Pampa Energia 20%, YPF 15%, Harbour Energy 15% and Golar LNG 10% working interest.
The consortium partners are targeting production start-up from the Hili Episeyo, with the nameplate capacity of 2.45 MTPA, around year-end 2027 with the MK II, with the nameplate capacity of 3.5 MTPA, expected to start operations end 2028.
The FLNGs will be located in close proximity of each other, offshore in the Gulf of San Matias Gulf in the province of Rio Negro in Argentina. The vessels will monetize gas from the Vaca Muerta formation, the world’s second largest shale gas resource, located onshore in the province of Neuquen.
FLNG Hilli will initially utilize spare volumes from the existing pipeline network, while the Souther Energy partners intend to facilitate for a dedicated pipeline to be constructed from Vaca Muerta to the Gulf of San Matias to serve gas supply to the FLNGs. The project expects to benefit from significant operational efficiencies and synergies from two FLNGs in the same area.
Under the recently enacted legislation, the 'RIGI' (Régimen de Incentivo para Grandes Inversiones), Southern Energy has been granted certain investment incentives including dollarisation of revenues after three years of production.
Also, the project has received the full support of the National and Provincial Governments in Argentina that granted all necessary approvals, including the first ever unrestricted 30-year LNG export authorization in Argentina.
The upstream partners in Southern Energy will supply the natural gas for the FLNG project, enabling Harbour's natural gas resource in Argentina to access global natural gas markets and international prices.
"Taking final investment decision on Southern Energy marks a significant milestone for Harbour Energy, providing the opportunity to deliver value from our extensive resource position in Argentina.
“As the country's first LNG project under the RIGI, it also marks an important milestone in supporting Argentina's ambition to become a material exporter of natural gas. We look forward to working together with our partners and stakeholders to safely and efficiently deliver this project,” said Martin Rueda, Managing Director of Harbour's Argentina Business Unit.
