Eni, XRG each take 32% in Argentina’s Vaca Muerta LNG project

ADNOC's international investment arm XRG and Italy's Eni ↘ 0.89% have each signed agreements to acquire 32% interests in three upstream blocks in Argentina's Vaca Muerta shale basin, joining state oil company YPF ↗ 0.52% in advancing one of the world's largest emerging LNG developments amid a global supply crisis triggered by the Middle East conflict.

The Deal

The agreements, announced on Monday, cover the Meseta Buena Esperanza, Aguada Villanueva, and Las Tacanas blocks in the unconventional Vaca Muerta basin. Upon completion, subject to regulatory approvals, YPF will retain a 36% interest while Eni and XRG will each hold 32%. YPF will maintain its role as operator of the assets.bloomberg+4

The three blocks will supply natural gas to the Argentina LNG project, an integrated upstream and midstream development designed to export LNG through two planned floating liquefaction units with a combined capacity of 12 million metric tons per year. First cargoes are targeted for 2030–2031. The partners signed a binding joint development agreement in February and are working toward a final investment decision in the second half of 2026.worldoil+3

A Market in Crisis

The deal comes against the backdrop of severe disruption in global LNG markets. The Strait of Hormuz has been effectively closed to commercial shipping since the outbreak of conflict between the U.S.-Israel coalition and Iran in early March, removing roughly 20% of world LNG supply from the market. Qatar's Ras Laffan facilities — the world's largest LNG complex — halted production following attacks on the infrastructure.timera-energy+1

According to the International Energy Agency, the combined effect of short-term supply losses and damage to Qatari liquefaction infrastructure could result in a cumulative loss of around 120 billion cubic metres of LNG supply through 2030. The IEA warned that tight market conditions could persist through at least 2027, delaying the anticipated wave of new global LNG capacity by two years.energyconnects+2

Argentina's Opening

The disruption has elevated the strategic importance of alternative LNG supply sources. Argentina's Vaca Muerta, one of the world's largest shale formations, holds vast unconventional gas resources that the consortium aims to monetize for export. According to Bloomberg, the upstream acquisitions build on the partners' earlier joint development agreement and strengthen the project's feedstock base.bloomberg

Eni has described Argentina LNG as its largest-ever LNG project and one of its top corporate milestones for 2026. The project's phased architecture envisions eventual capacity scaling to 30 million tons per year over the long term, positioning Argentina as a potential counterweight to disrupted Middle Eastern supply.shale24