San Matías Pipeline (SMP) began welding the pipes for the dedicated gas pipeline that will carry gas from Tratayén, Neuquén province, one of the main gas hubs of Vaca Muerta, to the Golfo San Matías in Río Negro province, where Southern Energy (SESA) will install two floating liquefaction units to export liquefied natural gas (LNG).
The first weld was made at the work front known as Spread Sur, at kilometer 223.1 of the route (PK 223+100), near the crossing of the Río Negro river, the company reported on November 6.
The welding stage begins after the pipes are moved from the Port of San Antonio Este and distributed to the different points along the route. The pipes, manufactured by Indian company Welspun, came in through that Río Negro terminal, which in mid-year cleared vessels up to 200 meters in length to call to receive the cargo.
The process uses two-stage automatic welding technology, one internal and one external, to join 36-inch-diameter pipes. The company estimates that approximately 39,334 complete welds will be made along the entire route, on some 40,000 pipes about 12 meters long each. The pipeline will have a total length of 472 kilometers and a transport capacity of up to 27 million cubic meters per day (MMm³/d) of natural gas.
Río Negro’s Governor and SESA’s CEO Toured the First Work Front by the Río Negro River
Río Negro Governor Alberto Weretilneck and SESA CEO Rodolfo Freyre visited the works. “The start of this work on the planned schedule advances our challenge of connecting Vaca Muerta’s potential with the global LNG market, positioning Argentina as a key supplier of reliable energy for the world,” Freyre said.
Weretilneck focused on what the project is already driving in the province. “With the start of welding on this pipeline, we are taking another concrete step to connect Vaca Muerta with our coast and take Argentine energy to the world. This transformation can already be seen at the port, in the movement of the pipes and at the work fronts. Getting here required planning, joint work and a Province that offers predictability and legal certainty and meets its commitments,” he said.
The dedicated pipeline responds to the project’s growth. At the Shale24+Santander Energy Summit, Freyre explained it this way: “It started out as seasonal and then changed with the second vessel, hence the dedicated pipeline.” The first vessel, the Hilli Episeyo, is scheduled to begin operating in 2027 and, in its initial stage, will be supplied with gas from the San Martín pipeline, operated by Transportadora de Gas del Sur (TGS), Argentina’s main southern gas pipeline operator. The second, the Esperanza, is scheduled to start in 2028, the same year SMP expects to complete the pipeline. Together, they will have a combined production capacity of 6 million tonnes per annum (MTPA) of LNG.
A $900 Million Loan Covers About 70% of the Project
SMP is a consortium made up of Pan American Energy (PAE), Argentina’s largest private oil producer, with 30%; YPF, Argentina’s state-controlled oil and gas company, with 25%; Pampa Energía, a diversified Argentine energy company, with 20%; Harbour Energy, the U.K.-based E&P company, with 15%; and Golar LNG, the LNG infrastructure company, with 10%. They are the same partners as SESA, in the same proportions, grouped in a separate vehicle for the transport project. Construction will require an estimated investment of $1.3 billion, and the project’s adhesion to Argentina’s Large Investment Incentive Regime (RIGI) was formalized by Resolution 873/2026 of the Ministry of Economy, published in the Official Gazette on June 26.
To finance it, SMP closed a $900 million syndicated loan, structured as project finance, with a seven-year term and three years of grace. It was arranged by Citi, J.P. Morgan, Santander and Itaú, which make up the syndicate together with BBVA, Bladex, Barclays, ICBC and Bank of China. The loan will finance about 70% of the planned investment; the rest will come from equity contributions by the shareholder companies.
Construction of the route is in the hands of the SICIM-Víctor Contreras joint venture, made up of Italy’s Sicim and Argentina’s Víctor Contreras. Construction management went to IEB Construcciones, and the system includes an intermediate compressor plant at kilometer 80, near Allen, Río Negro province, with civil works by Neuquén-based OPS and turbines from Baker Hughes.
SMP Has Already Hired 170 Workers and 98 Río Negro Suppliers
Alongside physical progress, the project is driving employment and purchasing within the province. So far, SMP has hired 170 employees and 98 suppliers from Río Negro to supply goods and provide related services, including transportation, tools, workwear, camp services and health services.
Purchases from suppliers in this part of the project amount to 43.79 billion pesos (about $27.9 million at Banco Nación’s official exchange rate on November 6).
The pipeline is the onshore piece of a larger project. SESA plans investments of more than $15 billion over 20 years and exports worth $20 billion between 2027 and 2035, with the goal of adding Argentina as a new supplier to the global LNG market.
The first of the 39,334 welds was completed at kilometer 223.1. The last one is due before mid-2028, when SMP expects to complete the pipeline that will link Tratayén with the Río Negro coast.