Pan American Energy (PAE) plans to significantly increase oil and gas production in Argentina in 2026, backed by annual investments averaging $1.6bn, as the company expands operations in Argentina's Vaca Muerta shale formation and advances a major liquefied natural gas (LNG) export project, BNamericas reported.
The company expects to boost oil output by around 30,000 barrels per day this year, bringing total production close to 130,000boe/d, while also scaling up gas production from key assets in the Neuquén basin.
“Our main focus is on developing the gas and oil of the Neuquén basin, in the Vaca Muerta formation, which is one of the main unconventional resources in the world,” said Alejandro Catalano, PAE’s managing director in Brazil.
In natural gas, PAE is expanding Aguada Pichana Oeste, one of Vaca Muerta’s main production hubs. Output is set to rise from 12Mm³/d to 16Mm³/d in April, with plans to reach between 24Mm³/d and 28Mm³/d by 2028, aligning with volumes required for Argentina’s LNG development strategy.
“The goal is to increase production to meet Argentine domestic demand and also to advance the monetization of these resources through regional and global exports,” Catalano said.
Production growth is also supported by international partnerships. PAE recently signed an agreement with US-based Continental Resources, under which the company acquired a 20% stake in four shale oil blocks. PAE will retain majority ownership and continue as operator across all areas.
Alongside upstream expansion, the company is progressing its LNG export initiative through Southern Energy (SESA), a consortium that includes YPF, Pampa Energía, Harbour Energy and Golar. The project involves the deployment of two floating liquefaction units in the San Matías Gulf.
The first vessel, Hilli Episeyo, is expected to begin operations in 2027, followed by the MKII unit in 2028. Together, the two facilities will have a combined production capacity of 6mn tonnes of LNG per year.
The consortium has already secured a long-term supply agreement with Germany’s SEFE (Securing Energy for Europe) to deliver 2mn tonnes of LNG annually over eight years. The contracted volumes represent more than 80% of the Hilli Episeyo’s capacity and over 30% of the combined output of both vessels.
Infrastructure development is underway to support the project. Construction has begun on a 15km onshore gas pipeline with a diameter of 30 inches, which will connect to the San Martín Gas Pipeline. Plans also include two offshore pipelines of 6km each, with diameters of 20 and 24 inches, linking the coast to the liquefaction vessels.
In addition, a dedicated gas pipeline is currently under tender and is expected to be operational by 2028, coinciding with the start-up of the second vessel. The pipeline will be financed through partner contributions and international funding.
The broader LNG initiative is projected to require an investment of $15bn over 20 years of operations and generate exports exceeding $20bn between 2027 and 2035.
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