Argentina’s Growing Natural Gas Exports to Reshape Regional Market
Recent and upcoming infrastructure improvements could accelerate natural gas exports from Argentina’s Vaca Muerta Basin and reshape natural gas markets in the region, says Fitch Ratings. Argentinian midstream companies, Chilean power generation companies, and upstream producers are the most likely beneficiaries.
The immediate impact on corporate ratings is limited as most Argentine corporate ratings are constrained by Argentina’s ‘B-’ Country Ceiling, reflecting transfer and convertibility risk. Longer term, a scenario of sustainably higher hydrocarbon exports could improve Argentina’s trade balance and help rebuild international reserves, which would be supportive of the sovereign rating and Country Ceiling.
Argentina’s natural gas production could reach new highs in 2026 after rising about 15% from 2021 to 2025, mainly due to higher output from the Vaca Muerta formation in the Neuquén Basin. Infrastructure constraints are easing, and export capacity is expanding. Vaca Muerta is one of the world’s largest shale gas deposits, but transportation bottlenecks have constrained output. Argentina still relies on imports during the winter peak season.
Investment in Vaca Muerta has accelerated as Argentina’s economic and legal frameworks stabilize and the removal of capital controls. This has improved access to international market access. New pipeline projects are improving transport links to major demand centers and export routes. The Argentina LNG project, led by YPF S.A. (CCC+), is progressing towards FID. This could mark a strategic shift for the country from a seasonal importer to an emerging global supplier. Fitch sees policy execution, including stable regulation, clear export protocols and efficient permitting, as key to sustaining investment momentum.
The expansion of the Perito Moreno Pipeline segment was awarded to Transportadora de Gas del Sur S.A. (TGS) (B-/Stable), with an estimated investment of about USD700 million for three compressor stations totaling 90,000 HP and complementary works across the system. The project is expected to increase capacity from 21 to 35 million cubic meters per day, initially adding around 14 million cubic meters per day of evacuation capacity from Vaca Muerta, supporting supply to Buenos Aires and the Litoral and reducing reliance on LNG and alternative fuels during winter. The mandate adds a new source of revenue and reinforces TGS’s market position and strategic infrastructure role within Argentina.
For Chilean power generators Enel Chile S.A. (BBB+/Stable), Enel Generacion Chile S.A. (BBB+/Stable), Engie Energia Chile S.A. (BBB/Stable), and Colbun S.A. (BBB+/Stable), more consistent supply of pipeline gas from Argentina will likely reduce reliance on LNG imports, supporting margins and dispatch competitiveness for combined cycle fleets. Natural gas represented around 15% of Chile’s 2025 electricity generation and will remain the base load of Chile’s electric system as it plans to phase out coal-fired power generation by 2040.
Chile currently has seven cross-border gas pipelines linked to Argentina with total capacity of roughly 20 million cubic meters per day but still often rely on seaborne LNG due to inconsistent supply from Argentina. Most of the LNG imported is through GNL Quintero S.A. (A-/Stable), a 15 million cubic meters per day regasification terminal, with a storage capacity of 334,000 cubic meters.
Upstream oil and gas companies operating in Argentina including YPF, Tecpetrol S.A. (BB-/Stable), Pampa Energía (B-/Stable), and Pluspetrol S.A. (BB/Stable) should also see an incremental revenue and earnings boost from rising gas production. However, oil remains the main earnings driver and focus of incremental capital deployment, given its easier monetization and access to international pricing. Argentine oil and gas capex surged in 2024-2025 but should ease in late 2026 through 2028 with the scheduled conclusion of major capital projects.
Source: Fitch Ratings