Southern Energy SA (SESA) has reached a final investment decision (FID) for the Southern Energy floating liquefied natural gas (FLNG) export project in Argentina.

SESA was established in 2024 to develop LNG export capacity from Argentina, and is backed by a group of energy companies.

Pan American Energy holds the largest share in the joint venture at 30%, followed by YPF with 25%, Pampa Energía with 20%, Harbour Energy with 15%, and Golar LNG with the remaining 10%.

The Southern Energy project will utilise two of Golar LNG’s FLNG vessels, Hilli Episeyo and MKII, to be stationed off the coast of Argentina’s Río Negro province.

It is expected to have a processing and export capacity of approximately six million tonnes per annum (mtpa) of LNG, equivalent to 27 million m3 per day of natural gas.

The Hilli Episeyo, with a nameplate capacity of 2.45mtpa, is scheduled to begin operations in 2027. The larger MKII FLNG unit, offering a nameplate capacity of 3.5mtpa, is expected to start up in 2028.

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Both vessels will process gas sourced from the onshore Vaca Muerta formation in Neuquén, claimed to be the second largest shale gas reserves in the world.

Harbour’s capital expenditure requirement until commercial operations commence is estimated to be around $100m.

The project has also secured key investment incentives under Argentina’s RIGI (Régimen de Incentivo para Grandes Inversiones) framework, including the dollarisation of revenues after three years of production.

Harbour’s Argentina business unit managing director Martin Rueda said: “Taking final investment decision on Southern Energy marks a significant milestone for Harbour Energy, providing the opportunity to deliver value from our extensive resource position in Argentina.

“As the country’s first LNG project under the RIGI, it also marks an important milestone in supporting Argentina’s ambition to become a material exporter of natural gas. We look forward to working together with our partners and stakeholders to safely and efficiently deliver this project.”