The French energy company, Total SA, has announced that it will develop a new shale gas field in Argentina, which will cost up to $500 million.
Total has given the go-ahead to develop the first phase of its Aguada Pichana Este project that is located in the Vaca Muerta, which is one of the biggest shale formations outside North America. Basically, the company plans to increase its interest in a larger and existing project, which is co-owned by several companies including Wintershall Energia SA, YPF SA, and Panamerica Energy LLC.
Commenting on this new venture, Total CEO Patrick Pouyanne said during a conference:
“We have giant resources of non-conventional gas under our feet in Argentina. It’s the beginning of a nice story.”
This new project was instigated by the Argentine government extending a program that offers a minimum price for the shale gas produced until 2021. Total sees this as a great opportunity to get new projects off the ground and side step a shortage of energy supply in the future. In fact, the Vaca Muerta project is just one of the many huge investment decisions on oil and gas by the company for this year and next.
The shale gas extracted through the Vaca Muerta project will be treated at Total’s existing plant in Aguada Pichana.