More Ust-Luga investors are comin’ in
More and more investors are coming to join the Ust-Luga seaport project. Recently, EuroChem has officially confirmed it would be willing to enter the project. Rosneftebunker’s terminal is expected to be commissioned in Q3, 2010. RTL plans to launch the New Harbor car terminal by late 2010. In late 2011 an oil terminal is projected to start operating for BPS-2. Moreover, there has been an agreement signed for building a grain terminal for United Grain Company. Overall, in the next two years more than 20 billion are expected to pour in the port project.
Expansion and downtime
In Jan-June Ust-Luga port demonstrated a 30-percent surge in freight volume, at 5.677.184 tons. Coal terminal with its 4,209,000 tons of coal and coke (+25%) contributed to the port’s handled volume, other goods – jumped to 620,700 tons (an increase of 5.75 times as much).
General cargo transshipment soared 76% to 451.407 tons, including ferrous metals - 325.974 tons (+58%), while shipments by ferries dropped 33% to 296.800tons (-33%), timber – by 14% to 99.242 tons.
The existing terminal Yug-2 has being currently expanded, with its second-phase to be launched shortly, the third phase – by the end of 2010. The total area for building additional facilities of terminal will reach 27 hectares by the end of this year.
The projected 3rd-phase terminal will significantly increase the Yug-2 storage area for automobiles, to handle general and project cargoes as well. The loading and unloading equipment has been purchased for the building terminal.
The new territory of Yug-2 will allow to have commissioned Rosmorport’s berths 24-26, for stern ramp Ro-ro vessels. The construction is being funded from the Invest Fund.
"Today we have a steady positive trend on the car market,” says General Director of Ust-Luga Joint Stock Company Maxim Shirokov, “the volume of exported new autos via Yug-2 keep on growing."
According to the company’s plans in 2010 the car terminal could see more than a threefold rise year-on-year in exports of autos, to about 60,000 cars. So, the Yug-2 third phase will help the company to satisfy the needs of its clients and ensure a high level of service, Maxim Shirokov said.
New Harbor, another car terminal owned by the Group of companies Russian Transport Lines (RTL) is being constructed at Vistino village, the main port area nearby. According to plans of RTL, the New Harbor, which has being build since April 2007 must be put into operation in late 2010, RTL’s executive director Constantine Skovoroda said in an interview with PortNews IAA executive director of RTL.
However, the situation with the Ust-Luga container terminal financed by National Container Company (NCC) is still uncertain. So far the launch of the terminal is not scheduled as yet. The implementation of the project slowed down because of the conflict between the NCC’s stockholders - Fesco and First Quantum last year, and due to the instable environment of the container market hit by the crisis.
In addition, the launch of another project, a petroleum terminal at the port has been delayed. Oil trader Gunvor is very much interested in the project. The terminal is said to be commissioned in Q3, 2010..
It is also worth mentioning of a grain terminal project - a deal, which was closed in April 2010 between Ust-Luga, the owner / developer of the port and the United Grain Company.
In Jan-June Ust-Luga port demonstrated a 30-percent surge in freight volume, at 5.677.184 tons. Coal terminal with its 4,209,000 tons of coal and coke (+25%) contributed to the port’s handled volume, other goods – jumped to 620,700 tons (an increase of 5.75 times as much).
General cargo transshipment soared 76% to 451.407 tons, including ferrous metals - 325.974 tons (+58%), while shipments by ferries dropped 33% to 296.800tons (-33%), timber – by 14% to 99.242 tons.
The existing terminal Yug-2 has being currently expanded, with its second-phase to be launched shortly, the third phase – by the end of 2010. The total area for building additional facilities of terminal will reach 27 hectares by the end of this year.
The projected 3rd-phase terminal will significantly increase the Yug-2 storage area for automobiles, to handle general and project cargoes as well. The loading and unloading equipment has been purchased for the building terminal.
The new territory of Yug-2 will allow to have commissioned Rosmorport’s berths 24-26, for stern ramp Ro-ro vessels. The construction is being funded from the Invest Fund.
"Today we have a steady positive trend on the car market,” says General Director of Ust-Luga Joint Stock Company Maxim Shirokov, “the volume of exported new autos via Yug-2 keep on growing."
According to the company’s plans in 2010 the car terminal could see more than a threefold rise year-on-year in exports of autos, to about 60,000 cars. So, the Yug-2 third phase will help the company to satisfy the needs of its clients and ensure a high level of service, Maxim Shirokov said.
New Harbor, another car terminal owned by the Group of companies Russian Transport Lines (RTL) is being constructed at Vistino village, the main port area nearby. According to plans of RTL, the New Harbor, which has being build since April 2007 must be put into operation in late 2010, RTL’s executive director Constantine Skovoroda said in an interview with PortNews IAA executive director of RTL.
However, the situation with the Ust-Luga container terminal financed by National Container Company (NCC) is still uncertain. So far the launch of the terminal is not scheduled as yet. The implementation of the project slowed down because of the conflict between the NCC’s stockholders - Fesco and First Quantum last year, and due to the instable environment of the container market hit by the crisis.
In addition, the launch of another project, a petroleum terminal at the port has been delayed. Oil trader Gunvor is very much interested in the project. The terminal is said to be commissioned in Q3, 2010..
It is also worth mentioning of a grain terminal project - a deal, which was closed in April 2010 between Ust-Luga, the owner / developer of the port and the United Grain Company.
EuroChem to build a fertilizer terminal
Recently a fertilizer producer EuroChem Holding has officially announced its intention to build at Ust-Luga port a terminal, designed for annual transshipment of 5 million tons of different types of fertilizers produced by the Holding’s enterprises (nitrogen, phosphate, potash). The four-year project is reported to cost about 5 billion rubles.
Total current volume of exported mineral fertilizers by EuroChem by sea is 4.7 million tons a year, with total output of 8 million tons a year. By 2017 the company intends to export 10m tons of fertilizers.
Payback of EuroChem’s projected dry bulk terminal at Ust-Luga is expected to be 5 years through reducing transport costs and logistics optimization.
The Holding is currently exporting its fertilizers through the Baltic ports of Klaipeda, Tallinn, Ventspils, the Russian port of Novorossiysk and small volumes via the ports of Ukraine. In the future, the company plans shipments of its products largely via its own terminals at Russian ports, save the port of Klaipeda, where EuroChem has its own production facility.
EuroChem also intends to launch its own terminal in Tuapse with annual throughput of over 2 million tons. "We hope that we will be the only company that would be able to load on similar small vessels as well on the Black Sea as on the Baltic Sea different types of fertilizers, since such a ship could be profitably sold,” said EuroChem’s General Director Dmitry Strezhnev commenting on the company’s plans. “With warehouses’ capacity at ports and having opportunity to load small vessels, we will be able to work in retail on the rivers of Danube and Rhine, along which major European agricultural enterprises are located," Mr. Strezhnev said.
He also added that redirecting its exports to the Russian ports, the company will reduce to political, customs and border risks.
To accommodate Suezmax vessels
To implement all the projects the port has to carry out necessary dredging of approach canals. The dredging at berths of the liquid cargoes terminal, terminal of petroleum products, bunkering complex, as well as facility for handling of gas condensate and its products in the northern area of the port are planned to be completed this year.
"The project depth marks at the berths will be at 17,5 meters. The depths of the operating water areas at liquid cargo complex and the second sea canal will allow accommodating any large-capacity tankers, which can enter the Baltic Sea through the Danish straits, including Suezmax and Aframax tankers of up to 160,000 DWT", said General Director of Ust-Luga Maxim Shirokov.
The Port Authority has projected for 2011, the construction of a 205-m-long, 18-m-deep second sea canal at the port of Ust-Luga. Dredging is funded under the Federal Program "Development of the Russian Transport System for 2010-2015”. In the future, it is assumed that one canal will operate for inbound ships and the second for outbound ones.
Developing logistics
According to Valery Izrailit, Chairman of the Board of Directors of Ust-Luga Company, within the next year the process of forming of the port’s investors pool will be continued. Then the development of logistics infrastructure and the construction of the port city will become the key issue.
According to PortNews IAA, another Russian coal company might join the Ust-Luga investors’ team.
Ust-Luga does not intend to disperse its equities, but will create its subsidiaries for investors.
On the current agenda are access railroads to the port, the creation of a logistics center, construction of the city port with the development of appropriate infrastructure.
Thus, the railroad approaches capacity is expected to be by the end of 2010 at 36.8 million tons a year, by 2011 - up to 42.7 million tons. According to the port’s plans for 2015 annual cargo turnover at Ust-Luga should exceed 100 million tons.
As for the logistics, Yug-2’s development program includes construction of a warehouse logistics center, which will provide a full range of services: consolidation, packing, packaging and labeling, offloading and loading of containers, documentation, inventory, shipping on-demand and other services. The project also provides for the establishment of a technical center for pre-sale technical support of cars, currently being designed.
Vitaly Chernov