Southern Energy, the society pooling the energy companies selling Vaca Muerta liquefied natural gas to the world, has signed a historic framework agreement with the international German company Securing Energy for Europe to supply natural gas to Europe. The agreement encompasses an annual volume of two million tons, indicating that nearly the entire capacity of one of the two vessels set to commence operations for export in September 2027 will be utilized over the subsequent eight years. The agreement, which requires ratification “in the next few months” upon finalization, embodies a threefold significance: it reflects the success of the enterprises that have invested in seaborne exports led by PAE; it ensures a steady influx of hard currency to maintain financial equilibrium; and it facilitates Europe’s diversification of energy sources amid the ongoing conflict between Russia and Ukraine. Depending on global gas prices, which are subject to market fluctuations, LNG exports could exceed US$7 billion over the duration of the agreement, generating substantial foreign currency inflows for Argentina while strengthening Europe’s energy security.
Southern Energy—which includes PAE, YPF, Pampa Energía, Harbour Energy, and Golar LNG—and SEFE, a German federal government–owned international entity, have entered into a framework agreement for the annual sale of two million tons of LNG for eight years. A press communiqué stated, “The operation will presumably be the biggest sale of LNG from Argentina to the world in terms of volume and duration.” The vessel transporting LNG from Vaca Muerta to Europe is the Hilli Episeyo, marking the inaugural unit among the two liquefier boats SESA plans to install in the San Matías Gulf in Río Negro Province. European demand secured with the German state company accounts for more than 80 percent of the liquefied gas that the vessel can produce, amounting to 2.45 million tons annually, while the combined productive capacity of the two boats—six million tons annually—means Europe’s participation will exceed 30 percent. Company sources note the current framework draft will require a final sales agreement between the parties in the coming months, with ratification expected to be a mere formality offering stability for nearly a decade.
The agreement was executed by Rodolfo Freyre, chairman of Southern Energy, alongside Frédéric Barnaud, chief commercial officer of SEFE, with notable attendees including PAE CEO Marcos Bulgheroni; Santiago Martínez Tanoira, YPF’s Executive Vice-President for Gas and Energy; Pampa Energy vice-president Horacio Turri; Martín Rueda, managing director of Harbour Energy in Argentina; and Golar LNG CCO Federico Petersen. Freyre stated: “The agreement signed with SEFE will constitute the first LNG sale on a major scale from Argentina, representing a milestone for the future development of Vaca Muerta’s natural gas reserves. We’re proud of taking this first step in the global LNG market with an internationally recognised player like SEFE.” Barnaud said: “SEFE’s first LNG agreement with a South American supplier not only contributes to the geographical diversification of our portfolio but also boosts Europe’s energy security. We are pleased to accompany Argentina on its path to becoming a global LNG exporter.” He noted that the agreement will allow SEFE to maintain collaboration with the Hilli Episeyo team as they transition from Cameroon to Argentina.
Established in 2024, Southern Energy comprises PAE (30 percent), YPF (25 percent), Pampa Energía (20 percent), Harbour Energy (15 percent), and Golar LNG (10 percent), aiming to position Argentina as a new supplier in the global LNG market starting in 2027. SESA has confirmed an investment exceeding US$15 billion to export LNG over a 20-year period from two liquefier vessels located in the San Matías Gulf, projecting exports exceeding US$20 billion from 2027 to 2035. The project is set to generate 1,900 direct and indirect jobs, primarily local, throughout its construction phase while ensuring notable involvement of domestic suppliers during operations. SEFE stated the agreement “looks after the security of supplies while pushing its clients to reduce carbon emissions,” noting its operations span the full energy value chain—production, marketing, sales, transportation, and storage. Under German government ownership, SEFE employs approximately 2,000 people globally and serves 50,000 clients ranging from small enterprises to multinationals. With decades of expertise in the LNG business and annual sales of 200 TWh of gas and energy, SEFE is actively investing in clean energy and green hydrogen to support the energy transition.