Argentina-based energy company Pampa Energía is planning to invest $550m to boost its unconventional production from the Vaca Muerta shale formation in 2023, reported Reuters, citing the firm’s president Marcelo Mindlin.

Touted to be the second largest shale gas reserve world, the Vaca Muerta shale reserve is crucial for the South American country to reduce its dependence on energy imports.

As part of the plan to boost gas production, the Argentinian government is constructing a new pipeline from the Vaca Muerta to Buenos Aires. It is also seeking new investments to fund the development of new liquefied natural gas (LNG) terminals.

Mindlin was cited by the news agency as saying to reporters at the firm’s site in Argentina’s barren Patagonian south, “All the potential that we talked about in Vaca Muerta is already beginning to materialise.”

Mindlin noted that the company will invest “not only in wells, but also by importing a fracture set because, for the amount of activity that is going to take place in Vaca Muerta, the fracture sets that we have in the country today are not enough.”

Pampa, which reported production of up to seven million cubic metres (m³) in 2021, plans to reach 15 million m³ per day in 2023.

Mindlin anticipates the new pipeline project to boost the country’s gas transportation capacity by 11 million m³ per day.

“By producing 11 million cubic metres more, instead of importing it, we will be saving next year from $2.5-$3 billion,” Mindlin added.