Road is a growth potential
Saint Petersburg Port may demonstrate in 2006 considerable fall in oil products transshipment volume. It results from decrease of the export cargo flow along Volgo-Balt as well as with reorientation of cargo owners for other ports. Market participants intend to recover lost volumes through increase of load at road transshipment complexes.
Russian ports of the Gulf of Finland control transshipment of one forth of all oil products exported from the country. In 2005 sea terminals of Saint Petersburg, Kaliningrad and Vysotsk distribution transshipment complex (Leningrad Region) transshipped 25 million tons of Russian fuel for export. The Ministry of Economic Development of RF forecasts for the current year 6% growth of oil product export amounting to 103 million tons. So the ports of Russian Baltica’s coast have the reason to hope for growth of consolidated cargo turnover up to 26.5 million tons in 2006. But Saint PetersburgPort may loose this opportunity. First half of 2006 demonstrated decrease of oil product turnover in Saint Petersburg Port.
In the previous year the share of Saint Petersburg port amounted to 15.6 million tons of oil products, that is over 62% of all the fuel exported via the region. Oil cargo come to Saint Petersburg PortSaint Petersburg Port, the largest of which is Petersburg Oil Terminal CJSC (POT), handled over the last year a little bit more than 12 million tons of light and dark fuel. Other oil cargo — 23% of total volume – was transshipped in summer navigation via storage tankers placed at the outer harbor (anchorage 5А). mainly by railway transport as well as by river tankers along Volgo-Balt (5.5 million tons over navigation of 2005) and by pipeline from Kirishi refinery to Petersburg Oil Terminal (2.47 million tons in 2005). Coastal transshipment complexes of
In 2006 the situation was different: at the background of general decrease of export of oil products via Saint Petersburg port (according to Sea Port Saint Petersburg Administration FSA it amounted over 7 months of the current year by 16.5% amounting to 7 million tons), the share of road transshipment decreased up to 8.6% amounting to 612.8 thou tons (over the reported period). Negative dynamics is mainly explained by a decrease of oil product transportation by river transport, market participants think.
Changes at the road
In navigation of 2005 at the outer harbor of Saint Petersburg Port behind Kronshtadt (Anchorage 5А in the eastern part of the Gulf of Finland) three stevedoring companies carried out their transshipment activities: VNP Volgotanker OJSC (Morskaya Liga CJSC), having two places for anchorage for storage tankers, In-Transit CJSC with two places for anchorage, and Transraid LLC having one place. Over summer navigation of 2005 these stevedoring companies transshipped 3 597.8 thou tons of oil products (mostly heavy fuel oil). Over this navigation In-Transit built new anchorage, and now the company owns three places for storage tankers. Market participants estimate consolidated potential of transshipment facilities at the road as 4 million tons per year. However in 2006 In-Transit was the only company working at the road. Volgotanker and Transraid do not carry out oil product transshipment in 2006.
According to Valery Eliseev, Director General of In-Transit CJSC, operation of stevedoring companies at the road depends on orders of cargo owners. “This year we work with Rosneft Oil Company and last year we covered transshipment of LUKOIL products”, he said to PortNews IAA. According to him “if cargo owner decides to find other ways of oil product export, the picture of road transportation may change again”.
Delivery of oil products to the road of Saint Petersburg Port is carried out by river tankers (capacity of 4.5 thou tons), going from Volga. That is why we can speak about direct link between traffic intensity of oil product tankers at Volgo-Balt and transshipment volume at Kronshtadt road.
Tonnage loss
Market of river tanker shipping is a considerably small one. Major carriers working in the direction of Saint Petersburg Port over several last years are the following companies: Volgotanker, Volga Flot Tanker (Volzhskaya shipping company) and Vision Fleet. In navigation of the current year operation of Volgotanker shipping company was terminated owing to sanctions imposed by tax authorities. The whole fleet of the shipping company stays in Samara. So daily amount of river tankers at Volga-Balt is less by 40 vessels. Thus, volume of oil product transportation along the river has decreased. According to Vldimir Nicholayev, head of Volgo-Balt SBA, the share of oil cargo has decreased this year up to 35-37% of total transportation volume. Over earlier periods oil products covered more than half of all the cargo — 55-57%.
Those ship-owners staying at Volgo-Balt this year note considerable deterioration of the shipping way. “Permanent under-funding of Volgo-Balt by the state prevent proper maintenance of it resulting in decrease of the vessel’s permissible draft and consequently, in und-loading of tankers, congestion at difficult parts of the river and downtime. All these factors not only worsen shipping economy but also endanger fulfillment of international export contracts”, tells Valeryi Romanov, head of Saint Petersburg representative office of Vision Fleet company, to PortNews IAA.
Having been distributed
In terms of possibilities of river carriers in the navigation of 2006, the distribution of cargo flow from Volgo-Balt is the following: Vision Fleet company covers transportation of 1.5 million tons of oil products (heavy fuel oil) to two storage tankers placed at the road by In-Transit company (storage tankers are chartered by oil traders). At the beginning of the year we counted on additional volumes - about 800 thou tons of heavy fuel oil but owing to the deficit of carrying capacity caused by downtime of Volgotanker we lost the possibility to transship this cargo, Eliseev tells.
Another big participant of the river tankers market — Volga Fleet Tanker - plans to transport about 1 million ton of heavy fuel oil this year from LUKOIL factories. This shipping company operates under contract for delivery of oil products to LUKOIL terminal in Vysotsk of Leningrad Region. River berths of Vysorsk DTC have been put into operation this year. According to forecasts the transshipment from river tankers over this navigation will amount to 600-700 thou tons of oil products. The rest 300-400 thou tons of heavy fuel oil supposed to be transported by Volga Fleet Tanker over 2006 will go to Petersburg Oil Terminal (POT). This may decrease consolidated volume of oil product transshipment of POT CJSC in 2006 by 7% year-on-year and by 9% as compared with the forecast amounting to 10 million tons.
As forecasted by Victor Olerskyi, chairman of the board of directors of North-West Shipping Company OJSC considering operation of smaller tanker carriers total volume of oil cargo from Volgo-Balt is to decrease in 2006 by 45% amounting to 3 million tons.
Waiting for growth
Vysotsk Port commenced accepting river tankers this year having drawn part of cargo from the road of Saint Petersburg Port and from POT. If the situation to change at the river total tonnage of tanker carriers is to increase (as a result of Volgotanker return or through other events), and volumes of road transshipment may grow faster than load of POT and other coastal terminals. This opinion has been provided by carriers and ship owners to PortNews IAA. “Road transshipment volume is limited only by the possibilities of the river as regards delivery of cargo. There are no other limits”, - Eliseev says. Besides, he notes, cost of cargo transshipment at the road is lower than that at the port’s berths. Besides, large tankers (up to 100 thou dons) may come to the anchorage while they may not enter the port’s water area owing to limited permissible draft at the waterway. As for POT, it may accept tankers of 33 thou tons. The vessels at Vysotsk port have less considerable limits - 80 thou tons. Considering the fact that those who buy heavy fuel oil prefer tanker consignments starting from 100 thou tons that decreases transportation cost of each ton of oil product, it becomes clear that road transshipment has much more advantages. According to Eliseev, part of LUKOIL cargo may return to the road because of it.
“According to the practice of the whole world there is a tendency to take dangerous objects outside the cities and megapolises”, notes sea-captain Romanov, top-manager of Vision Fleet. “Transshipment of oil products at the road is less dangerous than working with fuel at the berths of Saint Petersburg almost in the very center of the city”. One more factor is of high signiifcance: cargo from river comes to the road relieving the load of city thoroughfares. For example, large part of oil products arrives to POT by railway. What is important there is no possibility to increase cargo inflow through this way since railroad leading to the port is almost 100% full. So river transport looks much more attractive.
Re-orientation of cargo flow from Volgo-Balt to Estonian ports or Ust-Luga port is unlikely, Eliseev thinks. The distance from Neva river mouth to these ports is too long so such a rout would not be profitable, he explains. Now river vessels pass drawn bridges early in the morning, have enough time to discharge oil products into the storage tank staing in the road and to return to Volga Balt by the next drawing of the bridge. Downtime is short enough and the amount of passages grows. The vessels going to Vysotsk have no time to discharge within one day, Eliseev tells. Besides, not all river tankers have corresponding register class for passage across sea to remote ports.
Future work of storage tankers in the road of Saint Petersburg depends only on the condition of inland waterways, but there is a demand for road transshipment, Alexander Glukhov, captain of Saint Petersburg port agrees with other participants of the market. It is difficult to forecast volume of transshipment along Volgo-Balt since it is impossible to solve the problems of the river immediately. It is an integrated task to be solved at a state level, he tells. Glukhov also says: “Modern civilization increases demand for energy sources so we need to work with oil products and volumes of fuel transportation are going to grow”. The captain of the port thinks it is very useful to relieve internal water area of the port of large tankers and to carry out operations with dangerous cargo in the outer road of Saint Petersburg port. “It is the 11th season from the beginning of oil product road transshipment, and I would like to underline that there were no serious accidents over this period to be related to oil spill contaminating the coast. Participants of this business take technical safety of work very seriously themselves, Glukhov added.