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

Anglo-Dutch giant has shown "strong interest" in a potential

investment in LNG alongside YPF, according to La Nacion.

Shell did not immediately respond to a request for comment.

One LNG project led by YPF has already seen significant

advances.

The $55 billion initial phase of the LNG 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 in

September.

At the time, Chief Executive Officer Horacio Marin said the

capacity of the first phase would be up to 10 million tons per

year with first output to come between 2029 and 2030 entirely

from floating facilities. A second phase involving onshore

facilities would add 15-20 million tons per year by 2032,

according to Marin.

Argentina seeks to pump more natural gas from its huge Vaca

Muerta shale formation in western Neuquen province, which would

allow it to cut its reliance on costly imports.

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

confirmed Francos' assessment.

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

specifying whether Shell is considering investing with YPF and

Petronas on the LNG project set for Rio Negro province,

southeast of Neuquen, or a separate project.

Earlier this month, YPF said it continues to seek agreements

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

would allow future LNG exports to buyers in Europe and Asia.

YPF posted a 7% increase in its natural gas production

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

(Reporting by Aida Pelaez-Fernandez and Walter Bianchi; Editing

by David Alire Garcia and Lincoln Feast.)