YPF Targets 2026 FID for LNG Project, Shell Exits Over Scope Changes

YPF Sociedad Anonima YPF, an Argentinian state-owned energy company, stated that it expects to reach a final investment decision (FID) on the liquefied natural gas (LNG) project worth $20 billion. The project is being developed in partnership with the Italian energy firm Eni and ADNOC’s energy investment wing, XRG, by 2026, per Reuters. The LNG project has a targeted capacity of 12 million metric tons per year (mtpa). YPF’s CEO stated that, for this project, each of the partners is expected to hold approximately one-third of the project’s equity.

Additionally, it was reported that Shell plc SHEL has exited a different phase of the Argentina LNG project. The British energy firm had signed a project development agreement with YPF a year back for the same. However, due to changes in the project dynamics, including significant adjustments to the project’s scope, Shell has decided to withdraw from the project. YPF’s CEO mentioned a major change in the project’s scope, with the capacity being halved to 6 mtpa from 12 mtpa. Furthermore, YPF has stated that it will find another partner to replace Shell. The Argentinian energy company is currently prioritizing the project phase being developed in partnership with Eni and ADNOC’s XRG.

YPF anticipates that it will start exports from the 12 mtpa LNG project in 2030 or 2031, depending on whether it can reach an FID by mid-2026. The company stated that exports from the project are likely to begin four years after the potential FID.

Zacks Rank and Key Picks

YPF and SHEL both currently carry a Zacks Rank #3 (Hold).

Some top-ranked stocks from the energy sector are Oceaneering International OII and Canadian Natural Resources Ltd. CNQ. While Oceaneering currently sports a Zacks Rank #1 (Strong Buy), Canadian Natural Resources carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading provider of offshore equipment and technology solutions to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.

Canadian Natural Resources is one of the largest independent energy companies in Canada engaged in the exploration, development and production of oil and natural gas. The company boasts a diversified portfolio of crude oil, natural gas, bitumen and synthetic crude oil. It has delivered 25 consecutive years of dividend increases, one of the longest streaks among global oil producers.

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This article originally published on Zacks Investment Research (zacks.com).

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