$2 billion financing for Vaca Muerta South crude oil pipeline

By Global Infrastructure Sherpa · Jul 1, 2025

Financing Transmission announced Argentina Jul 1, 2025

USD2000M

Deal Value

180000 barrels per day

Capacity

construction

Stage

Vaca Muerta South crude oil pipeline

Project

Vaca Muerta Oil Sur (VMOS) secured a $2 billion syndicated project financing to fund the construction of the Vaca Muerta South crude oil pipeline and associated export facilities, linking Neuquén to the Atlantic coast.

Deal Analysis

Vaca Muerta Oil Sur (VMOS) has secured a significant $2 billion syndicated project financing to construct the Vaca Muerta South crude oil pipeline and associated export facilities in Argentina. This project aims to connect the Neuquén province, a key region for oil and gas production, to the Atlantic coast, facilitating the transportation and export of crude oil. The financing involves a consortium of major international banks, including Citi, Santander, Deutsche Bank, JP Morgan, and Itaú, highlighting the project's scale and potential impact on Argentina's energy infrastructure. The successful financing of the VMOS pipeline underscores the continued investor interest in developing Argentina's hydrocarbon resources, particularly within the Vaca Muerta shale formation. The project's completion is expected to enhance Argentina's export capacity and contribute to increased oil production and revenue. The involvement of Neuquén as an investor further demonstrates the province's commitment to developing its energy infrastructure and capitalizing on its vast oil and gas reserves. This deal signals a positive outlook for future infrastructure investments in the region, contingent on stable regulatory and economic conditions.

The $2 billion financing is one of the largest infrastructure deals in Argentina in recent years.
The involvement of major international banks (Citi, Santander, Deutsche Bank, JP Morgan, Itaú) demonstrates strong investor confidence.
The project will significantly enhance Argentina's crude oil export capacity.
Neuquén's participation as an investor highlights the province's commitment to energy development.

Market Context: The deal occurs within the context of Argentina's efforts to develop its vast hydrocarbon resources, particularly the Vaca Muerta shale formation. The energy sector is a key driver of economic growth in Argentina, and infrastructure investments like this pipeline are crucial for increasing production and exports.

Source Intelligence

KEY DETAILS

The five-year senior secured term loan carries pricing of SOFR plus 5.5% and was arranged and syndicated by a group of international banks acting as joint lead arrangers and bookrunners, alongside a broader syndicate of 14 additional international lenders and institutional investors. The terminal will include storage capacity of approximately 4.5 million barrels and offshore loading facilities capable of handling very large crude carriers, positioning Argentina to ship directly to global markets without reliance on third-party infrastructure.

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Deal Size

Vaca Muerta Oil Sur (VMOS), whose $2 billion syndicated project financing is the largest private infrastructure loan ever completed in Argentina

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Capacity

Initial transport capacity is designed at approximately 180,000 barrels per day, ramping up to more than 550,000 barrels per day by the end of 2027, with further expansion to around 700,000 barrels per day achievable through the addition of pumping stations.

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Location

The project involves more than 430 kilometres of crude oil pipeline running from Neuquén to a new Atlantic export terminal at Punta Colorada, in Río Negro province.

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Financials

The $2 billion facility covers roughly two-thirds of the project’s estimated total investment, with the balance funded through equity contributions from VMOS shareholders via a dedicated special-purpose entity.

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Signing

The transaction, which closed in July 2025, funds the construction of the Vaca Muerta South crude oil pipeline and associated export facilities linking Argentina’s shale heartland to the Atlantic coast.

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COD

First oil is expected in late 2026, with commercial operations commencing in 2027.

PARTIES MENTIONED IN SOURCE

Vaca Muerta Oil Sur (VMOS) developer

"At the center of that shift sits Vaca Muerta Oil Sur (VMOS), whose $2 billion syndicated project financing is the largest private infrastructure loan ever completed in Argentina"

Citi Lead Arranger

"Lead Arrangers: Citi"

JP Morgan Lead Arranger

"Lead Arrangers: Citi; JP Morgan"

Santander Lead Arranger

"Lead Arrangers: Citi; JP Morgan; Santander"

Itaú Lead Arranger

"Lead Arrangers: Citi; JP Morgan; Santander; Itaú"

Deutsche Bank Lead Arranger

"Lead Arrangers: Citi; JP Morgan; Santander; Itaú; Deutsche Bank"

Sullivan & Cromwell Counsel to Issuer

"Counsel to Issuer: Sullivan & Cromwell"