Southern Energy moves forward with USD 900 million financing to export LNG

Southern Energy is close to closing a syndicated loan of nearly USD 900 million to finance the construction of the San Matías Pipeline, a key piece of infrastructure for its liquefied natural gas (LNG) export project. The financing is being structured by Citi, JP Morgan, Itaú and Santander, along with other institutions.

The total estimated investment amounts to USD 1.3 billion. The scheme corresponds to a project finance structure, meaning repayment will be tied to the venture's future revenue rather than the balance sheets of the shareholder companies. The banking consortium is expected to include between 10 and 12 institutions.

The pipeline will span 478 kilometers with a 36-inch diameter. It will connect Tratayén, in Neuquén, with the Golfo San Matías, in Río Negro, where two LNG carriers with a combined capacity of 6 million tonnes per year will operate.

Pan American Energy, YPF, Pampa Energía, Harbour Energy and Golar LNG each hold equal stakes in Southern Energy. Construction was awarded to the Víctor Contreras–SICIM joint venture, while Oilfield Production Services will be responsible for a 46,000 HP compressor plant located in Río Negro.

Financial close is expected in the coming days, coinciding with the arrival of the first pipe sections and preparations for welding work scheduled for November. The timeline anticipates the arrival of the Hilli Episeyo vessel in 2027 and the start of production toward the end of that year, while the second unit, MK II, would come online in 2028.

Southern Energy has already reached an agreement with German state-owned company Securing Energy for Europe to export 2 million tonnes per year over eight years starting in late 2027. The project competes with Argentina LNG, led by YPF, Eni and XRG, which plans to begin operations in 2031.

With information from Energía Online.