Argentina’s President Alberto Fernández unveiled Thursday an LNG project to export gas sourced from the prolific Vaca Muerta formation.

The $10 billion project would be developed jointly by Argentine state oil firm YPF and Malaysian liquefied natural gas giant Petroliam Nasional Berhad, aka Petronas.

“We have the energy that the world needs and will need in the future,” Fernández said. He said the globe faced “an unprecedented energy crisis because of a bellicose war which has placed under pressure the conditions needed to meet energy demand.”

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He called the energy crisis caused by the Russia-Ukraine conflict “tragic,” but provided Argentina “an opportunity.”

“We have everything we need to satisfy our own demand and then offer excess gas to societies that need it to develop,” the president said.

At the ceremony, Fernandez was flanked by YPF cheif Pablo González and Petronas CEO Tengku Muhammad Taufik. The project would ramp up to 20 million metric tons/year (mmty) in a decade from an initial phase of 5 mmty, officials said. 

Petronas has been active upstream in the Vaca Muerta shale alongside YPF for the past eight years.

Vaca Muerta in Western Argentina is the second largest shale resource on earth and production has jumped this year. But an export project has been seen as key to unleashing the true potential of the shale play.

Officials said Argentina is importing around 35 LNG cargoes a year each winter. That flow would now be reversed.

Bahía Blanca port near Buenos Aires would be the site for construction, which today is home to a floating storage and regasification import unit.

“This is part of a state policy,” Fernández said. “It’s not a decision of the president or of the board of YPF. This is a decision by Argentina that sees the potential it has and wants to take advantage of it. We want to be part of the new development of energy that the world demands.”

YPF’s González said the agreement with Petronas “completes the requirements of the dream of Argentina as an exporter of LNG.”

The project would include additional infrastructure, including a new natural gas pipeline. Argentina is currently developing the 24 MMm3/d Néstor Kirchner natural gas pipeline, which will ship gas from Vaca Muerta to Buenos Aires.