Argentina's Energy Future: Vaca Muerta Pipeline Paves the Way

Argentina's ambitious drive to bolster its energy export capacity is gaining momentum, as the Vaca Muerta South pipeline project reaches 35% completion. This key infrastructure, led by state-controlled YPF, will traverse 437 kilometers from the Vaca Muerta shale region to the coast, effectively addressing transportation challenges.

The new pipeline, expected to initially carry 360,000 barrels per day by next year, could eventually double its capacity to 750,000 barrels per day upon completion of its final phase. This project is critical to unlocking the potential of Vaca Muerta, considered the fourth-largest unconventional oil reserve worldwide.

Domestic energy market dynamics are shifting, with 40% of Vaca Muerta's production currently exported. Changes in policy under President Javier Milei are favorable to increasing exports, though local producers face pressure to reduce costs to stay competitive against established players like the U.S.

(With inputs from agencies.)