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Evaluating the Consequences of the Gas Processing Complex Creation in the Russian Far East

Author

Listed:
  • Natalia Dzhurka

    (Economic Research Institute, Far Eastern Branch of the Russian Academy of Sciences)

  • Olga Dyomina

    (Economic Research Institute FEB RAS)

Abstract

The article considers macrostructural modelling of the consequences of the creation of a gas processing complex in the Russian Far East as it is the new gas-processing industry for the economy of the region. The research includes two stages. Firstly, the authors determine the conditions for “the integration†of the new industry into the system of inter-industry interactions of the regional economy. Secondly, we simulate the perspective trends of the regional macro-indicators that take into account the direct and indirect effects of the new industry. To verify the modelling approach, we describe three basic alternatives: the first one is based on the input-output analysis; the second one — on the analysis of economic interactions, the third one — on the integration of macrostructural and project analyses. Focusing on the possibility of taking into account the time factor, we chose the second alternative. We analyzed the investment and production characteristics of the projects on the development of the Chayandskoye field, construction both the cross-country gas pipeline “The Power of Siberia†and the Amur Gas Processing Plant as well as the helium logistic center. Thus, we have found that the development of gas processing will lead to the increase in demand on the production and services of the industries existing in the region. First of all, it will be fuel and energy industries and industrial sectors. But the development will not change the structure of their expenses. In order to evaluate the effects of the demand impulses of gas processing, we apply the dynamic model of economic interactions FrEEDM (Far Eastern Economic Dynamic Model). Information on costs and output of the new industry is included in the model a priori in the form of latent technology. According to the simulation results, if the new industry is created in the regional economy by 2030, the annual increase in GRP will be 8,3 %; in households’ incomes, it will be 4,4 %; in regional budget incomes — 2,8 %. At the same time, gas processing products will be just petrochemical feedstock and fully supplied for export. That is why the operational phase effects produced by technological changes are the half of the investment phase effects.

Suggested Citation

  • Natalia Dzhurka & Olga Dyomina, 2018. "Evaluating the Consequences of the Gas Processing Complex Creation in the Russian Far East," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(2), pages 450-462.
    • Handle: RePEc:ura:ecregj:v:1:y:2018:i:2:p:450-462
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