Argentina has begun construction on the Vaca Muerta Sur oil pipeline, the country’s largest energy infrastructure project in five decades. The $3 billion megaproject received approval under the new Incentive Regime for Large Investments (RIGI) in March 2025.
The 437-kilometer pipeline will transport crude oil from Argentina’s prolific Vaca Muerta shale formation to Atlantic export facilities. Construction started in February 2025 after securing environmental permits, with operations expected to commence in late 2026.
YPF, Argentina’s state-owned energy company, leads the project alongside major industry players. The consortium includes Pan American Energy, Vista Energy, Pampa Energía, Chevron, Pluspetrol, and Shell Argentina through a joint venture called VMOS S.A.
The pipeline features 30-inch diameter pipe divided into two sections across Río Negro province. The first section stretches 100 kilometers from Allen to Chelforó. The second spans 327 kilometers from Chelforó to Punta Colorada port.
Techint and SACDE won the construction contract and face significant technical challenges. The project requires 22 special crossings, including two using Horizontal Directional Drilling technology under waterways.
Argentina’s $3 Billion Vaca Muerta Oil Pipeline Breaks Ground Under Investment Scheme. (Photo Internet reproduction)
Boosting Oil Exports and Economic Growth
Vaca Muerta Sur will initially transport 550,000 barrels daily, potentially expanding to 700,000 barrels. This capacity will boost Argentina’s oil exports by 380,000 barrels daily through Atlantic routes.
The project promises substantial economic benefits beyond energy exports. Over 2,000 direct jobs will support local economies throughout construction. Annual petroleum exports could reach $15 billion once fully operational.
Financing follows a 70-30 structure, with 70% coming from international debt ($1.8 billion). The remaining 30% will come from equity contributions by consortium members.
The pipeline represents the first oil and gas project qualifying under Argentina’s new RIGI framework. This investment scheme provides tax benefits and regulatory stability to attract major capital projects.
VMOS expects commercial operations to begin by July 31, 2027. The new infrastructure addresses critical export bottlenecks that have limited Vaca Muerta’s development despite its vast resource potential.