Argentina’s YPF Tenders Pipes for Its Vaca Muerta Gas Line

Argentina · Energy

Argentina’s YPF has launched a pipe tender for a major Vaca Muerta gas pipeline while simultaneously securing bank financing for the VMOS oil pipeline, marking a decisive acceleration in the country’s shale export infrastructure build-out.

The Gas Pipeline Pipe Tender

Argentina’s state-controlled energy company YPF tendered a 563-km natural gas pipeline designed to move shale gas from the Vaca Muerta formation to Salliqueló in Buenos Aires province. The project would connect Tratayen in Neuquén with Salliqueló west of Buenos Aires, with bids due and scheduled to be opened on 8 July.

The initial phase is estimated at US$1.5 billion. Once operational, the line should transport roughly 24 million cubic meters per day (about 850 million cubic feet per day), expanding Argentina’s natural gas transport capacity by 25%.

YPF will hold priority access to the new capacity.

For a foreign reader, it helps to understand that Vaca Muerta — Spanish for “Dead Cow” — is a vast shale rock formation in Patagonia, roughly the size of Belgium. It holds some of the world’s largest unconventional oil and gas reserves.

However, its remote location has long meant that without pipelines, much of that gas cannot reach population centers or export terminals economically. This tender is therefore not just a construction contract; it is a piece of a national strategy to turn a geological asset into a financial one.

Awarding the Vaca Muerta–Sierra Grande Duct

A parallel gas duct project, running from Vaca Muerta to Sierra Grande, was awarded to a consortium formed by Pumpco and Bonatti. That project, led by YPF alongside Eni and XRG, carries a price tag estimated at US$1.2 billion and represents one of the largest pipeline builds in two decades.

The tender had been viewed as a major opportunity for Argentine industrial group Techint and its pipe-making unit Tenaris. However, the winning bid went to the international consortium instead.

Pumpco is owned by the controlling stakeholder of the Inter Miami football club.

The outcome surprised many local market watchers. Techint, through Tenaris, is a dominant steel pipe manufacturer with deep roots in Argentina’s energy sector—our reporting has shown the company supplied all the pipes for the first stage of the Néstor Kirchner Gas Pipeline—and losing such a high-profile contract to foreign players marks a notable competitive shift.

It also signals that international firms see enough long-term stability in Argentina’s regulatory framework to commit heavy equipment and personnel to multi-year construction campaigns.

VMOS Oil Pipeline Financing

VMOS S.A., a special-purpose midstream pipeline company formed by YPF’s shareholders, closed a US$2 billion syndicated loan in July 2025. The financing was led by Citi, Deutsche Bank, Itaú, JPMorgan, and Santander.

The loan backs the Vaca Muerta Sur (VMOS) oil pipeline project, valued at roughly US$2.5 billion. The 570-km pipeline will run from Añelo in Neuquén to Punta Colorada on the Atlantic coast of Río Negro and is designed to carry 250,000 barrels per day.

The shareholder group behind VMOS includes YPF, Pluspetrol, Pan American Energy, Pampa Energía, Vista, Chevron, Shell, Tecpetrol, and GyP.

A syndicated loan of this size is worth unpacking. It means a group of banks jointly provides the funds, spreading the risk among themselves.

For Argentina — a country that has repeatedly defaulted on sovereign debt — the willingness of five top-tier global banks to lead such a facility is a strong market signal. It suggests the lenders have assessed the project’s cash-flow projections and the legal structure of VMOS S.A. as sufficiently insulated from broader country risk.

Why This Matters

These parallel pipeline projects are critical for unlocking Argentina’s Vaca Muerta shale wealth. Lifting transport bottlenecks allows producers to ramp up output, displacing costly energy imports, improving the country’s trade balance, and creating a path to reliable export revenues.

For expats and investors, the fast-moving infrastructure rollout signals that Argentina’s energy sector is moving from potential to execution. The involvement of top-tier global banks and international construction firms adds a layer of institutional credibility to a market often viewed as high-risk.

There is also a domestic angle that matters enormously. Argentina has historically spent billions of dollars importing liquefied natural gas during its winter months to meet heating and power demand.

Every cubic meter of Vaca Muerta gas that can reach Buenos Aires province through new pipelines directly reduces that import bill, freeing up scarce foreign currency reserves for other needs.

The Broader LNG Export Vision

Pipeline construction fits into a broader export blueprint. On 12 February 2026, YPF, Eni, and XRG signed a binding joint development agreement for a massive liquefied natural gas project known as Argentina LNG.

The initial phase targets 12 million metric tons per year of LNG exports.

The long-term plan envisions scaling up to 30 million metric tons per year of LNG export capacity from Vaca Muerta by 2031. One estimate puts the total required investment at roughly US$25 billion, underscoring the enormous scale of the export ambitions tied to these new pipelines.

LNG, or liquefied natural gas, is simply natural gas cooled to a liquid state so it can be shipped on tankers to overseas buyers. For Argentina to join the ranks of major global LNG exporters, it needs both the pipelines to move gas from the wellhead to the coast and the multi-billion-dollar liquefaction plants to chill it for export.

The binding agreement among YPF, Italy’s Eni, and XRG is the clearest sign yet that the partners are willing to commit serious capital to that vision. What remains to be seen is whether global gas prices and the pace of the global energy transition will support such a long-term bet.

Will the project secure all the necessary environmental permits on schedule? Can Argentina maintain the macroeconomic stability needed to keep financing costs manageable over a decade-long build-out?

Those open questions will shape whether the 2031 target proves realistic.

Frequently Asked Questions

What is the new Vaca Muerta gas pipeline YPF just tendered?

YPF tendered a 563-km natural gas pipeline from Tratayen in Neuquén to Salliqueló in Buenos Aires province. Estimated at US$1.5 billion, it is designed to carry 24 million cubic meters per day.

Who won the Vaca Muerta–Sierra Grande pipeline construction contract?

A consortium formed by Pumpco and Bonatti won the contract, beating out competitors like Techint and Sacde. The US$1.2 billion project is led by YPF, Eni, and XRG.

How is the VMOS oil pipeline being funded?

VMOS S.A. secured a US$2 billion syndicated loan led by Citi, Deutsche Bank, Itaú, JPMorgan, and Santander. The loan closed in July 2025 and finances a 570-km oil conduit to Punta Colorada on the Río Negro coast.

Sources: Chambers – Vaca Muerta Sur Pipeline Project: USD 2 billion Syndicated Loan, Enerdata – VMOS signs US$2bn loan for 550 kb/d pipeline project in Argentina, Derecha Diario – Vaca Muerta: YPF advances with the construction of the largest pipeline in two decades, La Nación – El dueño del Inter Miami y una italiana le ganaron a Techint, Reuters – Argentina’s Vaca Muerta gas export plan is a pipe dream?, Bloomberg Law – Argentina Drillers Mandate Global Banks for $1.7B Pipeline Loan

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