Neuquén Submits YPF LNG Agreement to Legislature With 30-Year Fiscal Stability and Asia-Indexed Royalties

The royalty structure for gas destined to liquefaction operates on a sliding scale between 7.5 percent and 12 percent, with rates adjusting according to the Japan Korea Marker (JKM) index used as the Asian LNG pricing benchmark. This mechanism links provincial revenues directly to international market conditions in Asia, the primary target market for Argentine LNG exports. The agreement additionally exempts gross receipts tax for transactions between Single Project Vehicles (VPU) registered under RIGI when production targets export markets.

YPF committed to execute infrastructure works or provide equivalent financial contributions totaling up to 175 million dollars. The province retains authority to define specific projects in collaboration with the company, directing funds toward improvements benefiting communities connected to hydrocarbon development. The state-controlled company has a maximum 24-month window to notify final investment decision and demonstrate acquisition of international financing necessary for project execution.

The five Concesiones de Explotación No Convencional de Hidrocarburos requested by YPF received technical approval from provincial authorities after evaluation determined the projects adequate for maximizing hydrocarbon revenues. The development contemplates accelerated expansion requiring elevated investment levels, increased gas production volumes, dedicated infrastructure expansion, and construction of a specific pipeline to supply the export complex.

Governor Rolando Figueroa positioned the agreement as addressing Argentina’s international competitiveness challenges and logistical disadvantages through predictable conditions. The project aims to monetize Vaca Muerta’s gas resources at scale, with provincial projections indicating substantial increases in economic activity, employment generation, energy infrastructure expansion, and strengthened positioning in global energy markets. The framework recognizes that international competition and domestic constraints necessitate special conditions to render the export project viable against alternative global LNG supply options.