The new pipeline will cost an estimated $3bn. Credit: Kodda/Shutterstock.

Argentina’s state-run oil company, YPF, in collaboration with three other companies, has sanctioned the construction of a new oil pipeline to facilitate exports from the Vaca Muerta Sur region.

The Vaca Muerta Sur pipeline will span 437km, aiming to transport oil from the Vaca Muerta formation to a coastal export terminal in Rio Negro province.

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It will be developed by YPF-controlled Vaca Muerta Oil Sur (VMOS), with shareholders Pan American Energy, Vista Energy and Pampa Energía.

The $3bn (3.06trn pesos) project will include a loading and unloading terminal with interconnected monobuoys and a tank farm and storage facilities.

It is expected to be operational by the fourth quarter of 2026 (Q4 2026) and will be partially funded by the shareholders and supplemented by local and/or international financing.

The pipeline, situated within the prolific Patagonian Vaca Muerta shale formation, known for being the world’s second-largest unconventional gas reserve and fourth-largest oil reserve, is set to boost Argentina’s oil export capacity.

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YPF outlined that the pipeline’s design will initially support the transportation of up to 550,000bpd, with the potential to increase to 700,000bpd.

The shareholders including YPF, Pan American Energy, Vista Energy and Pampa Energía have pledged around 275,000bpd.

Additionally, VMOS has provided options to Chevron Argentina, Pluspetrol and Shell Argentina, among others, to secure up to a further 230,000bpd.

The successful completion of this transportation project is crucial for the advancement of Vaca Muerta and, alongside other projects, aims to facilitate exports, targeting an annual revenue of $15bn for the country in the coming years, with potential expansions pushing this figure beyond $20bn.

In November, YPF announced plans to secure $2bn in financing by Q2 2025 for the Vaca Muerta Sur pipeline project.

The Argentine Government has also approved a $500m private-sector initiative to expand the gas pipeline system connecting the Vaca Muerta shale region to Buenos Aires province.