Buenos Aires, April 16, 2015. Since the discovery of a deposit of sand in Chubut, YPF started an ambitious project to reduce costs and replace imports of this commodity, which is key to the production of hydrocarbons in the country.

"The launch of this project is a milestone for the industry. Sand is one of the inputs with the greatest impact on the reduction of costs of our activity. While replacing imports, we increase our efficiency and productivity," said Miguel Galluccio, President and CEO of YPF.

The Governor of the Province of Chubut, Martin Buzzi, stated: "The project will have a positive impact for the area of the lower valley of the Chubut River, because it will enable us to diversify our production matrix and to position the region at the forefront among suppliers of inputs for activities related to unconventionals, which are the future of hydrocarbons."

The project for the local production of sand provides for the development of a quarry and sorting facilities in Chubut. The facilities will be located 120 km away from the city of Trelew, near the towns of 28 de Julio and Dolavon. The plant will have an annual processing capacity of 500 thousand tonnes. The sorted sand will be transported through a multimodal integrated logistics system.

Before use in the operation, the sand produced in Chubut must go through a final treatment process, which includes the stages of washing, drying, and, in some cases, resin coating. For this purpose, YPF will install a plant in the town of Añelo, Neuquén, the epicenter of development of unconventionals in Argentina. The same will have a processing capacity of 100 tonnes per hour.

The main objective of this project is to ensure the supply of a key input in the development of unconventionals, at competitive costs at the global level, and contribute to the country through the national production of a commodity that, until now, has been imported almost entirely.

Pilot test in Canning

The first three thousand tonnes of sand from Chubut will be processed in a pilot plant fully developed by AESA in its facilities in Canning, in the province of Buenos Aires, and will be tested by YPF in its operation in Vaca Muerta in the province of Neuquén.

In order to develop this pilot plant, a contract was entered with the Institute of Mining Research in the National University of San Juan, the only Argentine entity that has the required resources for its development, and the activities of detail engineering, supplies, manufacturing, assembly, commissioning, plant trials and testing were entrusted to AESA, the engineering company of YPF.

About AESA

AESA is an Argentine company owned by YPF S.A. with more than 65 years of experience in the energy industry. It is one of the main contractors for large-scale construction projects in Argentina and the region for the oil and gas, petrochemical and power generation industry.

AESA develops all its operations under the Integrated Management System in accordance with its Quality, Environment, Occupational Health and Safety Policy and under the guidelines of ISO 9001, ISO 14001 and OHSAS 18001.

http://www.aesa.com.ar/