It is widely recognised that the swift expansion of Vaca Muerta is establishing the region as a pivotal economic driver for Argentina. What may be less well known is that the project also has the potential to address several structural bottlenecks in the Argentine economy. One of the most unusual developments, however, is not found within the energy sector but rather in agriculture. More specifically, it pertains to fertilisers, as one of the most significant ones, urea, is manufactured utilising nitrogen, which can be derived from Vaca Muerta gas. Last week, the administration of Javier Milei sanctioned the inclusion of Fértil Pampa, an energy initiative orchestrated by Pampa Energía, into the Large Investment Incentive Regime. The company is set to allocate approximately US$2.7 billion toward the establishment of a urea plant in the city of Bahía Blanca, located in the province of Buenos Aires.
Two weeks ago, Profertil, the largest fertiliser producer in the country, informed investors of its intention to construct an additional urea plant, also located in Bahía Blanca. Agricultural analyst Javier Preciado told the Herald that the developments in the Persian Gulf “exposed the vulnerability of the global agricultural system to energy and fertilizer supply chains.” Argentina demands 2.3 million tonnes of fertiliser, with just under half of this quantity being imported. These products are obtained from various nations engaged in the conflict in the Middle East, such as Saudi Arabia, Kuwait, and Oman. Preciado noted that upon the completion of the investments by Profertil and Pampa, Argentina’s production is expected to reach approximately 4.5 million tonnes. This amount would not only satisfy domestic demand but also create an exportable surplus that could be dispatched to Brazil.
“It is extremely important for Argentina and significant for Brazil,” Preciado said, explaining that the neighboring country imports between 7 million and 8 million tons of urea every year. Brazil constitutes almost 80% of regional consumption and stands as the primary potential market for new production. Preciado highlighted that a key benefit for Argentine farmers in producing urea domestically is the potential reduction in input costs, which would subsequently enhance farmers’ profit margins. This is because its price would no longer be determined by the cost of importing it – including the cost of shipping fertiliser from the Middle East – but rather by its export cost, since it would be manufactured domestically. The agricultural analyst indicated that this production could come online over the next six years and would enable Bahía Blanca to emerge as South America’s largest nitrogen fertiliser hub. “It will be important regionally,” Preciado stressed.
To illustrate his point, the analyst noted that Argentina has unrestricted access to the Atlantic ocean from a region “without war scenarios.” He also added that the country is a “guarantor of global food security” because of its large-scale production of oilseeds and grains. In 2025, the MERCOSUR countries and Chile imported a total of 10 million tonnes of urea annually, with an estimated value of around US$4 billion, as reported by a recent study conducted by the Latin American Energy Organization and the Development Bank of Latin America and the Caribbean. The same study also emphasised that the availability of this input “is strategic” for a region that exports more than US$250 billion worth of agricultural products each year.
