Equinor and YPF Luz announced that the companies have entered an agreement where a subsidiary of Equinor will subscribe to shares in Luz del León. Luz del León is the company in charge of the Cañadón León wind farm project, currently under construction, located in the province of Santa Cruz in Argentina. The shareholders of YPF Luz are YPF S.A and an affiliate of General Electric.
The agreement establishes that Equinor will have a 50% stake of Luz del León, with an equity contribution of USD 30 million. After the subscription and capital integration, YPF Luz and Equinor will jointly control Luz del León, while YPF Luz will be in charge of the operations of the Cañadón León Wind Farm project. After the completion of the works, the wind farm will have a capacity of about 120 MW of power and a total investment estimated to around USD 190 million.
The total installed capacity and power has already been sold to CAMMESA under the RENOVAR 2 Program and to YPF S.A. under a private power purchase agreement for 20 and 15 years respectively.
“We are very satisfied with this agreement with Equinor as a strategic partner for the development of the Cañadón León wind farm,” says Martin Mandarano, CEO of YPF Luz. “In this way, we add to our projects another very important worldwide energy leader, thus reflecting the confidence of such players and global investors in YPF Luz.”
“We are pleased to deepen and strengthen our relationship with Argentina’s leading energy company YPF, now also within wind power. We are looking forward to contributing to the development of the Cañadón León wind farm project and work together with YPF Luz,” says Executive vice president for New Energy Solutions in Equinor, Pål Eitrheim.
The agreement is subject to the fulfilment of certain condition precedents such as approval of the relevant antitrust authorities and obtaining project financing.
Equinor entered Argentina in 2017 and holds a 50% interest in the oil and gas license Bajo del Toro (YPF operator, 50%) and is operator with 90% equity in the Bajo del Toro Este license (partner Gas y Petróleo del Neuquén, 10%) in Neuquen.
The Bajo del Toro Este exploration licence permit covers an area of area of more than 133 km² (32,865 ac).
Equinor has committed to one exploration well within the four-year exploration period, which starts in 2018.
In addition, Equinor had the highest bid for seven offshore exploration blocks in the 1st Offshore Licensing Round in 2018. Equinor also holds a 50% interest in the Guanizul 2A (G2A) solar asset in Argentina where Scatec Solar is the operator.
IN BRIEF: THE VACA MUERTA GEOLOGICAL FORMATION ONSHORE ARGENTINA
- Argentina’s unconventional oil and gas resources are among the world’s largest.
- The Vaca Muerta is a geological formation of 30,000 km² located mainly in the province of Neuquén and containing oil and gas found at a depth of more than 2,500 meters. Argentina’s Neuquén province is the country’s most prolific hydrocarbon basin. The Nequen province is located in the west of the country, at the northern end of Patagonia.
- Vaca Muerta is expected to host major deposits of tight oil (shale oil) and shale gas. According to the U.S. Energy Information Administration, the formation contains 16.2 Bbbl of tight oil (shale oil) and 308 Tcf of shale gas.
- The Vaca Muerta Shale has long been known as a major petroleum source rock for conventional accumulations in the Neuquén Basin, which has had oil production since the 1920s. Vaca Muerta has attracted a number of international oil companies, which are exploring and producing in the country.