The deal will run for eight years
In a decisive step toward Argentina’s integration into the global energy market, Southern Energy South America (SESA) and the German energy company Securing Energy for Europe (SEFE) signed a Heads of Agreement on Monday for the sale of liquefied natural gas (LNG) to Europe.
The agreement calls for exports of 2 million metric tons of LNG per year over an eight-year period, beginning in late 2027. According to both companies, the deal represents Argentina’s largest LNG export operation to date in terms of both volume and duration.
A consortium of major players
Southern Energy is backed by major players in the sector: Pan American Energy (30%), YPF (25%), Pampa Energía (20%), Harbour Energy (15%), and Golar LNG (10%). Its counterpart, SEFE, is an international energy company owned by the German federal government and plays a key role in Europe’s security of supply.
The agreement comes at a critical time. As Northwest Europe is experiencing its highest LNG demand since the energy crisis of the 2022–23 winter. The EGPTNLE index, which tracks real-time LNG arrivals in the United Kingdom, the Netherlands, Belgium, France and Germany, recently reached its highest level since January 2023, up 85% from the lows of early 2025.
Economic and operational impact
Exports will be shipped from the San Matías Gulf in the province of Río Negro, where the “Hilli Episeyo” floating liquefaction vessel will be installed. The contracted volume accounts for more than 80% of the vessel’s production capacity.
The transaction could generate more than $7 billion during the life of the contract, depending on global price movements. It is expected to provide Argentina with a significant source of foreign currency while contributing directly to Europe’s energy security.
“This agreement with SEFE will become the first large-scale LNG export sale from Argentina and represents a milestone for the future development of Vaca Muerta’s natural gas reserves,” said Rodolfo Freyre, chairman of Southern Energy, after the signing.
Frédéric Barnaud, SEFE’s chief commercial officer, added: “SEFE’s first LNG agreement with a South American supplier not only expands the geographic diversification of our portfolio but also strengthens Europe’s energy security.”
Looking ahead
The final sales agreement is expected to be completed in the coming months. SESA is planning to invest more than $15 billion to operate two liquefaction vessels over the next 20 years, with the aim of reaching more than $20 billion in exports between 2027 and 2035.
The project will also generate local benefits, including about 1,900 direct and indirect jobs during construction.
Executives from each of the companies involved attended the signing, including Marcos Bulgheroni (PAE), Santiago Martínez Tanoira (YPF) and Horacio Turri (Pampa Energía), among others.