CB&I bags contract for crude oil storage for Vaca Muerta Oil Sur project

CB&I STS Delaware LLC has been awarded a substantial engineering, procurement, fabrication, and construction (EPC) contract for the development of a large-scale crude oil storage facility at Punta Colorada in Río Negro Province, Argentina. This project is a critical component of the Vaca Muerta Oil Sur (VMOS) initiative, an ambitious energy project poised to position Argentina as a major player in global oil exports.

The facility, to be commissioned by VMOS S.A., will feature a total storage capacity of 630,000 cubic meters (approximately 4 million barrels). Vaca Muerta, known for being one of the largest non-conventional oil and gas reserves in the world, represents a transformative opportunity for Argentina’s energy sector.

How will the Vaca Muerta project reshape Argentina’s oil exports?

The Vaca Muerta formation holds immense potential to expand Argentina’s oil exports, enabling the country to cater to both regional and international markets. The storage facility being developed by CB&I is an integral part of the 437-kilometer VMOS crude oil export pipeline, which will transport oil from Vaca Muerta to a coastal terminal.

VMOS, a special-purpose midstream oil company led by Argentina’s state-owned energy firm YPF, is driving the pipeline’s development in partnership with Pan American Energy, Vista Energy, and Pampa Energía. The consortium aims to complete the pipeline by late 2026, providing the necessary infrastructure for crude oil exports to commence.

Mark Butts, CEO of CB&I, expressed confidence in the project, stating that the company is committed to delivering high-quality, safe, and efficient solutions. He noted that CB&I’s involvement from the early Front-End Engineering Design (FEED) phase to project execution demonstrates its capability to optimize costs and streamline schedules for its clients.

Why is Vaca Muerta critical for Argentina’s energy strategy?

Vaca Muerta is a vital pillar of Argentina’s energy ambitions, contributing to economic growth, job creation, and foreign investment. Spanning 30,000 square kilometers across several provinces, this unconventional oil and gas reserve is central to YPF’s strategy to strengthen Argentina’s position in the global energy market.

The broader Vaca Muerta project includes multiple infrastructure components, such as a hydrocarbon storage and dispatch terminal in Punta Colorada. Técnicas Reunidas, a Spanish engineering firm, is overseeing the terminal’s engineering and project management under a contract valued at $440 million. The terminal will feature five large storage tanks with a combined capacity of 600,000 cubic meters and will dispatch 62,000 cubic meters of crude oil daily.

The terminal’s advanced monobuoy system will enable the loading of very large crude carriers (VLCCs), ensuring efficient export operations. Técnicas Reunidas has leveraged its expertise to optimize the project’s conceptual engineering, reducing investment costs and accelerating timelines.

What are the key investment figures and timelines?

The total investment in the Vaca Muerta project is estimated at $3 billion, with funding shared between YPF and its partners. CB&I’s scope of work is expected to commence in the second quarter of 2025, with the project slated for completion by the fourth quarter of 2026. Técnicas Reunidas’ ongoing contributions are part of a broader effort to achieve operational readiness for commercial exports by 2027.

Additionally, VMOS has granted capacity expansion options to major energy players like Chevron, Pluspetrol, and Shell, underscoring the project’s potential to attract long-term partnerships.

How does this project align with global energy trends?

The Vaca Muerta initiative reflects a growing trend of investment in non-conventional oil reserves to meet global energy demand. With geopolitical factors influencing energy supply chains, projects like Vaca Muerta are critical for diversifying sources of crude oil.

Argentina’s investment in cutting-edge infrastructure, such as storage facilities and export terminals, ensures the country remains competitive in the evolving energy landscape. The involvement of established industry leaders like CB&I and Técnicas Reunidas further bolsters the project’s credibility and underscores its significance in global energy markets.

Expert perspectives on Vaca Muerta’s potential

Energy experts highlight the transformative impact of the Vaca Muerta Oil Sur project on Argentina’s economy. By fostering international partnerships and enhancing export capabilities, the initiative is expected to generate significant revenue and bolster the country’s trade balance.

Moreover, CB&I’s commitment to safety and efficiency is a testament to the evolving standards in energy infrastructure development. The collaboration between Argentine and international firms ensures the integration of advanced technologies and best practices.

The Vaca Muerta Oil Sur project represents a monumental step in Argentina’s journey to becoming a major crude oil exporter. With the involvement of CB&I, Técnicas Reunidas, and other leading stakeholders, the initiative promises to deliver economic, technological, and environmental benefits. By investing in world-class infrastructure, Argentina is not only unlocking the potential of its energy reserves but also positioning itself as a key player in the global energy market.