UK energy giant Shell has decided to exit the multibillion-dollar Argentina LNG project, just a year after signing a development agreement with the country’s state-owned energy company, YPF. According to Shell, changes in project dynamics and a significant shift in its scope prompted the company to step away.

Last December, Shell acquired a 50% stake in the greenfield liquefaction project from Petronas, which was initially planned as a 12 million tonnes per annum (TPA) development using two floating LNG vessels. At the time, Shell described the venture as aligned with its strategy to expand its LNG business.

YPF CEO Horacio Marin confirmed that the company is now looking for a new partner to replace Shell. He indicated that the final investment decision for the LNG project could happen by mid-2026. Marin also noted that the phase involving Shell has been scaled down to 6 million TPA, with priority now given to the segment involving Italian energy company Eni and Abu Dhabi’s XRG, an investment arm of ADNOC.

Exports from the 12 million TPA phase led by Eni and XRG are expected to begin in 2030 or 2031, roughly four years after project approval. Last month, Eni and YPF signed a non-binding agreement with XRG regarding its potential participation in exploiting gas from the Vaca Muerta shale formation.