Amur Gas Processing Plant will not bring instant increase in budget revenues of Amur Region and no increase this year — that will require time

1 september 2015 | IAA 'Eastrussia'

A gas chemical cluster is being established in the Amur Region. The Chairman of the Government of the Russian Federation Dmitry Medvedev has signed an order to create conditions to build and launch various gas industry infrastructure components to connect a number of Russian regions to the gas system and to ensure gas supplies to China. The Amur Gas Processing Plant has now been added to the infrastructure transporting gas along the ‘Eastern’ route.

Victoria Gimadi
Victoria Gimadi
Department for Fuel and Energy Sector

The Amur Gas Processing Plant is a truly large-scale project, according to Victoria Gimadi, the Head of the Department for Fuel and Energy Sector of the Analytical Center. But in order for there to be a discussion about the advantages for the Amur Region the timelines should be determined. “On the one hand, beginning the project will mean employing a large workforce, which will have a positive impact on the region’s economy almost straight away. On the other hand, starting operations at the plant depends on the opening of a section of the Power of Siberia gas transmission system. This will also require starting production at the Chayandinskoe gas field, which means that the plant will not start operations prior to 2019,” Ms. Gimadi said in an interview to the IAA EastRussia. “It will take several years after that for the plant to reach its full capacity. This fact in itself is sufficient to make it clear that the Amur Region’s budget will not rise suddenly and certainly not in 2015,” she added. However, Ms. Gimadi forecasts that, in the event that companies registered in the region are contracted to build the plant, budget revenues could increase during the plant’s construction. Once the plant is launched the region will see a much more significant growth in budget revenues.

In her view, the prospects of the project will depend on demand for the plant’s output — ethane, propane, helium and other products — in both the domestic and export markets, above all in the Asia-Pacific region. “A gas chemical plant is due to be launched there in 2022, and it will use ethane produced at the processing plant to produce gas chemical products.  A key question here is the outlook for selling a whole range of products in both the domestic and export markets. From the point of view of demand in the Russian market a major issue is the potential growth of the Russian Far Eastern Region, which will much depend on the success of similar large-scale investment projects,” Ms. Gimadi added. “From the point of view of exports, the Asia-Pacific markets are attractive, but competition in them is greater, hence much will depend on the opportunity to compete in quality and price,” she pointed out.

Source: IAA EastRussia