Argentina has signed its first binding long-term liquefied natural gas export contract, a deal with Germany’s state-owned SEFE that will see Vaca Muerta shale gas shipped from late 2027.
The agreement, which converts a preliminary understanding signed in December 2025 into a legally binding Sales and Purchase Agreement, marks a milestone for President Javier Milei’s push to monetize Argentina’s vast shale reserves. Southern Energy S.A. (SESA), a joint venture involving Pan American Energy, YPF, Pampa Energia, Harbour Energy, and Golar LNG, will supply the gas.
Golar LNG’s Hilli Episeyo floating LNG plant, which delivered its final cargo from Cameroon on July 26 after eight years and 156 shipments, is being refitted for the Argentine contract. The company has allocated $350 million for the conversion, with $71 million already spent by the end of June. Commercial operations in Argentina are expected to begin in the second half of 2027.
Revenue and Scale
The deal is estimated to generate approximately $4.4 billion in total export earnings across its eight-year term, based on expected prices at the time of signing. Golar expects the contract to produce roughly $285 million per year in operating profit, before any upside from higher commodity prices.
A separate and far larger project is also advancing. YPF, Italy’s Eni, and XRG filed a project called Argentina LNG under the country’s RIGI investment incentive regime around August 13. That plan carries a $51 billion investment figure and targets 12 million tonnes per year of capacity by 2031.
YPF Chairman Horacio Marin said on August 14 that Argentina “will export $10 billion per year from 2031.” The RIGI framework offers tax incentives and regulatory certainty to attract foreign capital into Argentina’s energy sector.
Strategic Context
The SEFE deal is part of Germany’s effort to diversify its energy supply following the disruption of Russian pipeline gas. SEFE, formerly known as Gazprom Germania before its nationalization, has secured LNG agreements with US-based Venture Global and Turkey’s BOTAS as well.
For Argentina, the contract validates the commercial potential of the Vaca Muerta formation in Patagonia, one of the world’s largest shale gas deposits. The Milei administration has made energy exports a centerpiece of its economic strategy, seeking to generate hard currency to rebuild depleted central bank reserves and stabilize the peso.
The deal also carries geopolitical significance, positioning Argentina as a reliable energy supplier to Europe at a time when traditional supply chains remain under pressure from the ongoing conflict in Ukraine and instability in the Middle East.
Sources: The Rio Times; MarketScreener; Golar LNG; Global Energy Monitor; Reuters
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