YPF, together with Italy's Eni and the UAE's XRG, filed an application on August 14 for Argentina's largest-ever request under the government's Large Investment Incentive Regime, known as RIGI, seeking decades of tax and customs stability for Argentina LNG, a $51 billion project that would convert natural gas from the Vaca Muerta shale formation into liquefied natural gas for export. If the project reaches a final investment decision, which the partners are targeting for the end of this year, it would be the single largest private investment ever channeled through RIGI, the incentive scheme President Milei's government created to draw large-scale foreign capital into energy, mining and infrastructure.
The project's endpoint is Punta Colorada, a stretch of coast on Río Negro's Golfo San Matías that counted four registered residents in the 2022 census. YPF and its partners plan two floating liquefaction units there, fed by a new 437-kilometer pipeline connecting Vaca Muerta's gas fields in Neuquén to the coast, with a combined export capacity of 12 million tonnes of LNG a year. Operations are projected to begin in 2027 or 2028, assuming both the RIGI application and the final investment decision clear on schedule.
The scale of the undertaking has turned what started as a technical energy-export filing into a broader question about Argentina's capacity to plan for the kind of rapid, concentrated growth that large resource projects tend to produce. Researchers at the Laboratorio de Ideas Sostenibles, working with support from the Harvard Innovation Lab, project that Punta Colorada could eventually house around 25,000 people, a jump of several thousand times its current population, and are warning officials and developers against repeating the mistakes made in Añelo, the town nearest Vaca Muerta's onshore wells that grew explosively over the past decade without matching investment in housing, water, sanitation or roads, according to Buenos Aires Herald reporting.
Añelo has become something of a cautionary tale in Argentine energy circles: a town that absorbed thousands of oil workers and contractors far faster than local services could keep pace, straining infrastructure that was never built for that kind of population. The concern among planners now is that Punta Colorada, starting from an even smaller base, could see the same dynamic play out on a larger scale if housing, water and transport investment do not keep pace with construction of the LNG terminal itself.
Laboratorio director Joaquín Tomé has proposed a three-pillar strategy for the area, built around industrial activity tied to the LNG plant, a diversified tourism economy, and preservation of the coastline's environment, which includes a rare species of algae found in only seven locations worldwide, per the Herald. Tomé has also pushed back on the kind of sweeping population forecasts Argentine officials have floated elsewhere: Deregulation Minister Federico Sturzenegger recently projected that mining investment alone could draw a million new residents to the northern province of Catamarca over the next thirty years, a figure Tomé has publicly questioned as unrealistic.
Argentina LNG's ownership structure has already shifted once. Shell exited the venture roughly a year after joining, leaving YPF to rebuild the partnership around Eni and XRG, the international energy investment arm ADNOC launched in 2024 with more than $80 billion in committed capital. The $51 billion price tag, confirmed independently by energy trade outlets including Oil & Gas Journal, World Oil and LNG Prime, would make Argentina LNG the largest single project YPF has brought to RIGI, ahead of the broader pipeline of RIGI-eligible projects that YPF chief executive Horacio Marín has separately valued above $150 billion in recent weeks.
For a government whose economic pitch leans heavily on Vaca Muerta's export potential, beef, grains and now natural gas all cited as evidence that deregulation is drawing capital back into Argentina, Argentina LNG is meant to be the showcase. A final investment decision by year-end would convert one of the largest pieces of RIGI's promised wave of dollar inflows from an announcement into an actual construction project.
But the same feature that makes the site attractive to investors, a sparsely populated, largely undeveloped coastline free of the property disputes and congestion of an established city, is exactly what makes the planning problem acute. Whether Punta Colorada becomes a functioning small city or an under-served boomtown will depend on decisions made well before the first LNG shipment leaves port, and on whether provincial and national authorities treat the housing, water and transport buildout as part of the project rather than an afterthought to it.