Year of Graduation
Comparative Analysis of Approaches to Localization in LNG Projects (on the Example of Russia, Norway)
Large-scale capital investment projects in oil and gas sector require significant investment in infrastructure and, thereby, they have a large impact on the economy. In Russia, these projects are being developed with attraction of foreign resources. This fact leads to lower level of direct and indirect socio-economic effects. In the current paper, the authors have demonstrated that development of «Yamal LNG» in Russia and «Snovit» in Norway based on localization policy has introduced higher level of socio-economic effects and value added. Comparative analysis of Russian and Norwegian localization approaches has allowed to identify that despite the fact that LNG projects in these two countries have similarities; their impact on the national economy is different. The main reason for these differences is that when the project in Norway had been started, its oil and gas sector were already on higher stage of development as well as its overall economy. At the same time, Russia is still depended on import of advanced technologies, high-tech equipment and skilled workforce. Thus, the authors have estimated multipliers of oil and gas industries (which reflect the socio-economic effects of the considered sector on the economy) and project multipliers of autonomous investment costs. The based approach of the paper is input-output modeling. The results of model implementation have confirmed that an increase of national resources usage leads to higher positive impact on economy. Additionally, «Snovit» project has influenced the Norwegian wealth better that «Yamal LNG» in Russia, although the funds invested in the last one were in 5-6 times greater. Besides, it was shown that the structure of the economy is also one of the factor, which influences the level of socio-economic effect in the terms of localization policy.