YPF SA and OAO Gazprom are in talks to sign a memorandum of understanding to develop natural gas in Argentina worth at least $1 billion, the South American country’s Industry Minister Debora Giorgi said.

Gazprom officials will visit Buenos Aires-based YPF as soon as November, Giorgi said in an e-mailed statement after meeting with Gazprom Chairman Alexey Miller at the International Gas Forum in St. Petersburg, Russia. The MOU could include Germany’s BASF SE unit Wintershall AG, she said.

YPF, Argentina’s largest energy company, is seeking partners to develop a Chubut provincial shale deposit, D129, and Vaca Muerta, a shale formation the size of Belgium that contains at least 23 Bbbl of oil. Chevron Corp., the third- largest oil company by market value, is producing shale oil in a YPF joint venture that may expand to $16 billion.

“We are seeking partners to finance shale projects,” Giorgi said in the statement. “The investments will be for shale deposit not only located in Vaca Muerta.”

YPF has had “promising” meetings with Gazprom though it hasn’t yet signed an MOU, the company said today in an e-mailed statement. YPF said it will inform the market if it signs such an accord.

Alejandro Di Lazzaro, a YPF spokesman in Buenos Aires, earlier referred to a press release issued by Gazprom on the meeting between Miller and Giorgi.

“The meeting participants looked at the development prospects for the bilateral cooperation in the gas sector, with an emphasis on exploration and production of gas from Argentine gas fields,” Gazprom said in the statement.

“Consideration was also given to supplies of liquefied natural gas from Gazprom group’s portfolio to the country.”
Moscow-based Gazprom is the natural gas producer that meets a third of European demand for the fuel. Wintershall produces 9% of Argentine gas output.