BUENOS AIRES, Nov 12 (Reuters) - The cabinet chief to

Argentine President Javier Milei cited oil major Shell

as a potential investor in a future liquefied natural gas (LNG)

project to be run by the country's state oil firm YPF

, according to newspaper La Nacion.

Cabinet Chief Guillermo Francos said at an event that the

major energy company has shown "strong interest" in a potential

LNG investment in the country, according to La Nacion.

"We are always exploring opportunities to improve our

portfolio," said Shell's spokesperson, Cynthia Babski, in an

email to Reuters. The company declined to elaborate on its

agreements or activities.

The massive $55-billion LNG project led by YPF has already

seen significant advances.

The initial phase of the LNG development, originally

planned as a tie-up between YPF and Malaysian state oil company

Petronas, is expected to reach a final investment decision by

the second half of next year, the CEO of the Argentine national

producer said earlier this year.

The final investment decision was originally expected for

this year, but the partnership between Petronas and YPF has

weakened amid disagreements over the project, YPF's Chief

Executive Officer Horacio Marin has said.

The capacity of the first phase would be about 9 million

tons per year with first output to come between 2029 and 2030

entirely from floating facilities. A second phase involving

onshore facilities would increase the project's total capacity

to up to 30 million tons per year by 2032, according to YPF's

most recent presentation.

Argentina seeks to produce more natural gas from its huge

Vaca Muerta shale formation in western Neuquen province, which

would allow it to increase domestic supply and eventually

export.

Asked for comment on Shell's interest, a YPF source

confirmed Francos' assessment.

"The interest is real," the source told Reuters without

specifying how Shell's investment in LNG in Argentina would be

made.

Earlier this month, YPF said it continues to seek agreements

with oil companies to help build the LNG plant in Rio Negro.

YPF posted a 7% increase in its natural gas production

during the third quarter, attributed to progress in Vaca Muerta.