Lonely alliance
Export-oriented project of oil terminal in the Vistino Bay will be finalized by the end of 2008. The project was originated by Severo-Zapadnyi Alyans LLC (North-West Alliance). The company was established specially for the project implementation. It is the only investor into a would-to-be-built Gorki-Vistino port area. Initially, such companies as TNК-BP, Oiltanking Vistino LLC, Luga-Oil CJSC, SG-trans LLC and Baltic-Kuzbass Terminal LLC wanted to participate in the project but gradually these potential investors ceased to play important role in the project having left North-West Alliance LLC as the only party. Today the company says it will open the terminal in 2009.
Two years for construction
Construction of a new oil terminal at the Vistino Bay, which is located in the southern part of the Gulf of Finland, close to Ust-Luga port in Leningrad Region, will be started in 2007. All the works are to be finalized by the end of 2008. Alexander Dymov, chairman of the Alliance's Board of Directors told at the presentation of Vistino that the terminal’s design capacity is 10 million tons of oil products per year. If necessary the capacity may be raised to 18 million tons per year. According to Dymov, the terminal will be mostly focused at oil products, not crude oil. “We have a number of agreements with oil companies including TNK-BP, for loading of the terminal up to 14 million tons per year,” Dymov said. “TNK has recently confirmed its interest so we a not to be left at a loose end”.
Andrei Pcheolkin, Director General of North-West Alliance, tells the company has coordinated delivery of oil products by railway with RZD OJSC. The capacity of RMNK Vistino has been considered in the plan for development of Luzhskaya railway station. The investor’s funds are to be used for construction of a 14 km long approach track between Luzhskaya railway station and the terminal’s facilities.
Experts consider the project to find its ready market. As PortNews IAA learnt form its source at Vysotsk “LUKOIL-II” (project in the northern part of the Gulf of Finland similar to that of Vistino in terms of capacity), estimating Vistino’s possible loading, export pipeline of Transneft going to the North-West region of Russia is not loaded to 100% yet. “So, export of oil via Vistino is unlikely to be arranged, while transshipment of oil products, especially heavy fuel oil and gas oil may correspond to a demand,” the source said. Actually, transshipment of gas oil in the North-West region of Russia is carried out only at Vysotsk. So there is a slight deficit for such port facilities. The source also informed that ТNК-ВР sometimes exports part of its oil products via Vysotsk terminal though Lukoil fails to cover ТNК-ВР’s demand for export.
Investments
Total investments into the project are said to amount to about $400 million. North-West Alliance is going to attract investors form Europe and USA. The company has already held a road show of the project in New York and Washington. In January-February it is to continue presentation of Vistino in order to attract co-investors. The project implementation is to take about 2 year, pay back period – 7-8 years. As the source at Vysotsk “LUKOIL-II” thinks, such project, including all the hydrotechnics, should take at least 2.5-3 calendar years. It is impossible to perform the construction within such a short period. The terms will be adjusted in the course of construction, the source believes.
A railway overpass and a small port station should be built within the framework of the project. Besides, the project implies dredging and construction of berths. It is a large scope of work. The budget of $400 is enough only without application of advanced ecological technologies. According to the source, construction up-to-date ecological facilities is to increase the project’s value by about $100 million.
Advantageous logistics
Experts think the location of Vistino terminal is optimal in respect of logistics considering further port development in the North-West region of Russia. “The old port of Saint Petersburg has neither ecological nor logistics perspectives. So our project is a very significant one,” Dymov says.
Among the advantages of Vistino complex is natural depth of about 25 meters at the coast of the Gulf of Finland, which will enable the terminal accept tankers with a deadweight exceeding 100,000 tons. Dredging works needed for the terminal are minimal since there is no need to build any approach canal. Besides, Vistino port complex is within the area covered by local system of shipping safety of Ust-Luga port, PortNews IAA learnt from Sergei Semenov, development director of scientific and production enterprise Marien Construction and Technologies. This system is a part of regional system ensuring safe shipping in the eastern part of the Gulf of Finland. Among disadvantages of Vistino, Semenov indicates high expenses for construction of railway approach track and high waves typical for this area. However, the project location has other disadvantages – as it is the territory of RF Defense Ministry it may be considered as an undesirable factor for possible investors, experts think.
Integrated approach to infrastructure
Vistino oil terminal is a commercial project, but development of Vistino-Gorki port area demands infrastructure, the cost of which may be as high as construction of several terminals.
Sergei Kuklin, deputy chairman of the Committee for Economic Development of the Leningrad Region, told PortNews IAA that a pin-point target approach in solving energy, water or railway issues separately from each other is unlikely to give any positive result. “Success of any large logistics complex is possible only in case of an integrated approach,” he says. “Leningrad Region Government initiates a competition for an integrated development program covering the territory of the whole peninsular. The competition is to be announced within a month. Integrated development is not to hinder development of individual projects if investors have power and money enough”.