MANAGEMENT OF CAPITAL-INTENSIVE PROJECTS IN THE GAS INDUSTRY

ABSTRACT

The article examines the features of managing capital-intensive projects in the gas industry, taking into account their specific characteristics. It is substantiated that one of the key problems of modern practice is the lack of an integrated management model capable of ensuring synchronization of engineering design, financing, and logistics processes. Based on the analysis of scientific sources, typical causes of inefficiency in megaprojects are identified, and their characteristics and classification features are systematized. A multifactor approach to megaproject management is proposed, based on the integration of technical, financial, and logistics subsystems. An integrated management model is developed, and an integral efficiency index is proposed, allowing for the assessment of consistency across project implementation subsystems.

АННОТАЦИЯ

В статье исследуются особенности управления капиталоемкими проектами в газовой индустрии с учетом их специфики. Обосновано, что одной из проблем современной практики является отсутствие интегрированной модели управления, которая бы обеспечивала синхронизацию инженерного проектирования, финансирования и логистических процессов. На основе анализа научных источников выявлены типовые причины неэффективности мегапроектов и систематизированы их характеристики и классификационные признаки. Предложен мультифакторный подход к управлению мегапроектами, основанный на интеграции технической, финансовой и логистической подсистем. Разработана интеграционная модель управления и предложен интегральный индекс оценки эффективности, который позволяет учитывать согласованность подсистем реализации проекта.

Keywords: capital-intensive projects, gas industry, megaprojects, project management, integrated model, multifactor approach, technical subsystem, financial subsystem, logistics subsystem, project efficiency.

Ключевые слова: капиталоемкие проекты, газовая индустрия, мегапроекты, управление проектами, интеграционная модель, мультифакторный подход, техническая подсистема, финансовая подсистема, логистическая подсистема, эффективность проектов.

Introduction. The gas industry is among the sectors in which the implementation of capital-intensive projects is associated with a high degree of organizational, technological, and financial complexity, as such projects simultaneously involve upstream, processing, transportation, infrastructure, export, and energy components. Accordingly, such a project constitutes a complex system requiring the coordination of diverse decisions and may be classified as capital-intensive. At the same time, current conditions in the functioning of the gas industry increase the instability of the project environment and raise the requirements for the quality of decision-making [6]. In addition, first, the issue of the absence of an integrated megaproject management model persists, within which technical, financial, and logistics decisions would be combined into a unified system; second, in practice, insufficient synchronization of engineering design, financing, and supply chains is observed, as a result of which even technically well-developed projects do not always prove to be effective; third, the risks associated with project activities in the management of oil and gas investment projects are increasing [4]. Taken together, these circumstances determine the relevance of examining the specific features and developing methodological tools for managing capital-intensive projects in the gas industry.

The aim of the study is to develop a multifactor approach to the management of megaprojects in the gas industry based on the integration of technical, financial, and logistics management subsystems.

Research methodology. The research methodology is based on a combination of systemic, process-based, risk-oriented, and integrative approaches. The systemic approach makes it possible to consider a capital-intensive project in the gas industry as a complex organizational and economic system comprising interconnected project subsystems and a wide range of internal and external influencing factors. The process-based approach was applied to analyze the sequence and interdependence of the stages of the project life cycle, while the risk-oriented approach was used to assess and account for the probability of disruptions, deviations, and losses at critically significant stages of implementation. The integrative approach is aimed at the development of a management model.

As research methods, a comparative analysis of scientific publications, as well as structural and functional modeling, were employed. Within the framework of the study, a capital-intensive project is interpreted as a project characterized by high cost, significant implementation duration, a multiplicity of stakeholders, increased infrastructure dependence, and high sensitivity to deviations in timelines, budget, and supply.

Results and discussion. Megaprojects in the gas industry, as noted earlier, are characterized by a set of specific features:

• large-scale capital investments;
• a long implementation horizon;
• a complex multi-stage structure;
• the need for the involvement of a large number of specialized entities;
• a high degree of dependence on the external environment.

For such projects, spatial dispersion of facilities is typical, combined with the technological interdependence of project stages and the presence of strict and clearly defined requirements for the reliability of equipment and communications. At the same time, the implementation of megaprojects is carried out through multiple coordination processes among the client, contractors, financial institutions, suppliers, and government entities. Based on the example of international projects for the development of oil and gas condensate fields, it can be stated that management efficiency in this area is determined by the ability to coordinate the interests of various stakeholders while ensuring controllability of operations despite their complexity [10].

Taking into account industry-specific characteristics, megaprojects in the gas industry can be classified according to several criteria (Fig. 1).

Figure 1. Classification of megaprojects in the gas industry, compiled by the author

Based on Fig. 1, a megaproject in the gas industry represents a system with multiple management regimes, the composition of efficiency factors depends on the selected product model, territorial configuration, existing contractual arrangements, as well as the availability of resource support.

On the other hand, it is also important to take into account the main typical sources of inefficiency in megaprojects—inefficiency in the gas sector is generally systemic in nature and arises at the intersection of design, financing, risk management, procurement, contractual interactions, and the external environment.

Particularly noteworthy in this context are the risks that accompany investment projects for the construction of oil and gas facilities. These include the following (Table 1):

• errors in pre-project assessment;
• insufficient elaboration of implementation conditions;
• deviations during the construction phase;
• changes in external economic parameters;
• disruptions in stakeholder interaction;
•  mismatch between actual conditions and initial project assumptions.

Table 1.

Main typical sources of inefficiency in megaprojects

Ultimately, due to the influence of these factors, problems arise in the form of increased construction costs, often accompanied by schedule delays and a reduction in the overall investment efficiency of the project [12].

On the other hand, in response to the identified problems and typical conditions, a multifactor elaboration of a project management model appears feasible, the essence of which lies in the fact that the object of management is not only the project itself as a set of activities and resources, but also the system of interrelations between technical solutions, the investment structure, logistics flows, requirements for stability (risks), and external transformations. In particular, the scientific literature devoted to the issues of integrated optimization of gas supply chains under modern conditions emphasizes that the efficiency of such systems is determined by the ability to account for interdependencies between various subsystems, as well as to align current production and logistics decisions with long-term structural changes in the industry [11].

Based on this, a multifactor approach to the management of megaprojects in the gas industry can be defined as a management concept based on the synchronization of three subsystems, each of which retains its own functional specificity, while project efficiency is achieved only under the condition of their continuous consistency. In other words, optimization within a single subsystem does not guarantee overall project success unless it is supported by corresponding decisions in the other two subsystems. These subsystems include the technical, financial, and logistics ones (Fig. 2):

Figure 2. Multifactor approach to the management of megaprojects, compiled by the author

Thus, let us consider each of the subsystems of the multifactor approach separately:

1. The technical management subsystem, which encompasses (1) engineering design, (2) technical standardization, (3) organization of construction, (4) control of technological compatibility of solutions, and (5) ensuring the reliability of the facility being created. For the gas industry, it is of fundamental importance that it is precisely at the technical level that the foundation for the subsequent financial and logistics efficiency of the project is formed. In particular, errors in design specifications, the lack of unified documentation requirements, combined with the incompatibility of standards and insufficient formalization of coordination procedures, generate subsequent deviations (manifested as sequential chains) already at the stages of procurement, installation, and commissioning. For example, contemporary studies on the standardization of management in oil and gas investment projects emphasize that the absence of unified management and project standards typically leads to duplication of functions, reduced coordination quality, and increased transaction costs in the implementation of complex industry projects [4]. Therefore, the technical subsystem should be developed as a standardized management subsystem in which the necessary measures are ensured to prevent common technical issues and mitigate their impact on other subsystems.
2. Financial management subsystem. This subsystem in the gas industry is associated with the formation of the following processes: (1) capital structure, (2) selection of financing mechanisms, (3) assessment of payback, (4) management of the investment cycle, and (5) ensuring cash flows throughout the extended project implementation period. The peculiarity of this subsystem lies in the fact that, for gas megaprojects, financial decisions are made under the influence of a wide range of financial factors. Thus, in the case of liquefied natural gas projects, financing is typically based on the implementation of complex capital-raising schemes (involving corporate, debt, and often external sources of funding), with such financing secured for long-term periods through contractual arrangements [5]. In turn, the management of investment processes in oil and gas corporations implies the formation of an investment control system in which financial decisions are directly linked to corporate project priorities and strategic efficiency criteria [7]. Of additional importance is the fact that the gas industry possesses specific financial characteristics:

• a high share of capital expenditures;
• a significant burden on the investment budget;
• dependence on infrastructure capacity;
• a long payback period.

Therefore, particular attention is paid both to the financial sustainability of the project model and to the quality of budget planning [8]. Consequently, the financial management subsystem of a megaproject should ensure the possibility of dynamic alignment between current objectives, the volume of capital investments, the cost of capital, and the acceptable level of financial risk.

3. The logistics management subsystem ensures the material support of the project at various stages, including the delivery of critically important equipment, coordination of transport flows, and maintenance of supply. Studies devoted to the management of LNG supply chains demonstrate that such chains are characterized by high complexity, as their management involves multi-parameter optimization [2]. At the same time, the stability of supply chains should be assessed through the system’s ability to withstand external threats [1]. A broader perspective on the logistics subsystem is presented in a systematic review of supply chain management in the oil and gas industry, which emphasizes the need to link logistics decisions with the institutional environment, sustainability requirements, and multi-stakeholder governance [3]. Moreover, the efficiency of the logistics model depends on the alignment of routes and deliveries with the territorial and infrastructure characteristics of the project and demand conditions, and therefore cannot be based on universal or standardized solutions [9]. Thus, the logistics management subsystem of a megaproject in the gas industry should ensure the reliability of supply, along with the synchronization of procurement with the engineering schedule and the ability to rapidly reconfigure logistics solutions in response to changes in external conditions.

Thus, the proposed integrated model is based on the following provisions:

• technical solutions should be assessed in terms of their financial feasibility and logistics implementability;
• financial decisions should be made taking into account the schedule of engineering and construction works, as well as critical supply points;
• logistics solutions should be embedded in the project schedule structure and be based on the priorities of technical deployment and investment support.

It is particularly important that this synchronization be ensured throughout the entire project life cycle; in the integration of the aforementioned subsystems, the following mandatory elements necessarily arise:

1. a unified calendar and resource plan;
2. coordination of decisions;
3. monitoring of critical deviations;
4. change management;
5. coordination of stakeholders.

These blocks, taken together, make it possible to monitor and meet deadlines, manage the budget, supply, and risks, and achieve the target technical and economic project parameters. For the quantitative assessment of the effectiveness of such a model, an integral efficiency index of the megaproject can be proposed:

Iₑₘ= aT + bF + cL

where: T is the efficiency index of the technical subsystem; F is the efficiency index of the financial subsystem; L is the efficiency index of the logistics subsystem; a, b, c are weighting coefficients of subsystem significance, with their sum (a + b + c) = 1.

If necessary, the structure of the index may be detailed:

T = (t1 + t2 + t3 + t4) / 4,

where t1 is adherence to design timelines, t2 is the level of standardization of solutions, t3 is the technological readiness coefficient, and t4 is the level of reliability of work execution (or other parameters taken into account).

F = (f1 + f2 + f3 + f4) / 4,

where f1 is budget adherence, f2 is the regularity of financing, f3 is the stability of cash flows, and f4 is the acceptability of investment risk.

L = (l1 + l2 + l3 + l4) / 4,

where l1 is the timeliness of deliveries, l2 is the stability of routes, l3 is the provision of the project with material resources, and l4 is the flexibility of the supply chain.

Based on the presented index, the following variations and patterns in the efficiency of managing capital-intensive projects can be identified (Fig. 3):

Figure 3. Patterns in the efficiency of managing capital-intensive projects in the gas industry, compiled by the author

Conclusion. Thus, capital-intensive projects in the gas industry represent a specific class of megaprojects—the main sources of inefficiency in such projects are concentrated not only in individual technical or financial errors, but primarily in the lack of consistency between engineering design, investment support, and supply chains. As a result of the study, a multifactor approach to the management of megaprojects in the gas industry is substantiated, based on the synchronization of three subsystems (technical, financial, and logistics), the advantage of which lies in enabling a transition to an integrated model in which the project is considered as a system of interdependent decisions. This constitutes a fundamental condition for the controllability of a megaproject in the modern gas industry.

The fundamental factors for the successful implementation of megaprojects include:

• standardization of technical procedures with management;
• financial sustainability and regularity of investment provision;
• reliability and adaptability of the logistics system to changes;
• consistency of stakeholders’ interests;
• timely identification and redistribution of risks;
• the presence of a unified center for the synchronization of decisions across subsystems.

References:

1. Al-Haidous, S. Evaluating LNG Supply Chain Resilience Using SWOT Analysis: The Case of Qatar / S. Al-Haidous, M. Al-Breiki, Y. Bicer, T. Al-Ansari // Energies. – 2022. – Vol. 15. – Art. 79. – DOI: 10.3390/en15010079.
2. Al-Haidous, S. Sustainable Liquefied Natural Gas Supply Chain Management: A Review of Quantitative Models / S. Al-Haidous, T. Al-Ansari // Sustainability. – 2020. – Vol. 12. – Art. 243. – DOI: 10.3390/su12010243.
3. Atstāja, D. Sustainable Supply Chain Management in the Oil and Gas Industry in Developing Countries as a Part of the Quadruple Helix Concept: A Systematic Literature Review / D. Atstāja, K. W. Mukem // Sustainability. – 2024. – Vol. 16. – Art. 1776. – DOI: 10.3390/su16051776.
4. Avdeeva, L. A. Problems of Standardization in the Management of Oil and Gas Investment Projects / L. A. Avdeeva, M. V. Gerasimova // Bulletin of Eurasian Science. – 2015. – Vol. 7, No. 3(28). – P. 1.
5. Butyaga, V. V. Features of Financing Projects in the Liquefied Natural Gas Sector / V. V. Butyaga // RUDN Journal of Economics. – 2008. – No. 2. – P. 102–113.
6. Dubovitskiy, R. A. Project Management in the Gas Processing Industry under Sanctions / R. A. Dubovitskiy // Society: Politics, Economics, Law. – 2025. – No. 3. – P. 115–121. – DOI: 10.24158/pep.2025.3.13.
7. Karkhova, S. A. Management of Investment Processes in Oil and Gas Corporations / S. A. Karkhova // Bulletin of the South Ural State University. Series: Economics and Management. – 2017. – Vol. 11, No. 1. – P. 65–73.
8. Kirichenko, O. S. Key Financial Features of the Gas Industry / O. S. Kirichenko // Finance and Management. – 2019. – No. 1. – P. 1–9.
9. Rahmanta, M. A. Insights into Small-Scale LNG Supply Chains for Cost-Efficient Power Generation in Indonesia / M. A. Rahmanta, A. M. S. Asih, B. M. Sopha, B. Sulancana, P. A. Wibowo, E. Hariyostanto, I. J. Septiangga, B. T. A. Saputra // Energies. – 2025. – Vol. 18. – Art. 2079. – DOI: 10.3390/en18082079.
10. Vlasov, A. V. Management of International Projects for the Development of Oil and Gas Condensate Fields (on the Example of OJSC Verkhnechonskneftegaz) / A. V. Vlasov // iPolytech Journal. – 2014. – No. 4(87). – P. 174–178.
11. Yusuf, N. Current and Future Role of Natural Gas Supply Chains in the Transition to a Low-Carbon Hydrogen Economy: A Comprehensive Review on Integrated Natural Gas Supply Chain Optimisation Models / N. Yusuf, T. Al-Ansari // Energies. – 2023. – Vol. 16. – Art. 7672. – DOI: 10.3390/en16227672.
12. Zamyatin, M. V. Risk Management in the Implementation of Investment Projects for the Construction of Oil and Gas Facilities / M. V. Zamyatin // Bulletin of Baikal State University. – 2006. – No. 2. – P. 39–40.