French energy firm Total has announced plans to invest $850m to develop a deep water natural gas field off the southern coast of Argentina.
The company will partner with German crude oil and natural gas producer Wintershall and Pan American Energy to develop the Vega Pleyade field.
The field is located in South Atlantic waters near the Patagonian province of Tierra del Fuego.
Total official Javier Rielo told Reuters that the field is expected to commence gas production towards 2015’s end.
As part of the project’s first phase, three wells will be drilled, with initial gas production expected to be six million cubic metres per day, increasing up to ten million.
When at full production, the field would bring the company’s overall production to 18 million cmd.
Owing to the growing demand for energy in Argentina, the latest development is said to confirm Total’s proposal to provide Argentina with gas in the long-term.
The project received the green light as Argentina aims to reduce its energy deficit, which stood at $5.4bn through August, based on data provided by the National Statistics Agency.
The new venture is expected to save $1.6bn annually for Argentina with regards to fuel imports.
The project will be operated by Total with a 37.5% stake.
A 37.5% interest will be owned by Wintershall, while the remaining 25% will be held by Pan American Energy.
UK firm BP owns 60% of Pan American Energy and Bridas Energy in Argentina and China-based CNOOC share the remaining 40%.
Image: Total’s building in la Défense, near Paris, France. Photo courtesy of Tangopaso.