Turkmenistan eyes moving oil exports via Russia
According to expert estimates Turkmenistan could increase by 2020 crude oil exports by almost 4 times - up to 10 million tons a year. The country is also exporting more petroleum products, primarily fuel oil, diesel fuel and gasoline, and liquefied gases. Part of this flow will rush to the Russian ports and inland waterways, which will create additional opportunities for stevedoring and shipping businesses in the Caspian region and for shipbuilders.
Silk Road to turn Oil Road
Analysts predict a rise in oil production and refining in Turkmenistan and, accordingly, exports of crude oil and petroleum products from this country. Thus, the forecast for oil production in 2015 was 15-16 million tons, almost 50% above the forecasted production volume by this year-end, and by 2020 - 20-21 million tons.
Silk Road to turn Oil Road
Analysts predict a rise in oil production and refining in Turkmenistan and, accordingly, exports of crude oil and petroleum products from this country. Thus, the forecast for oil production in 2015 was 15-16 million tons, almost 50% above the forecasted production volume by this year-end, and by 2020 - 20-21 million tons.
The crude oil exports volume is expected to rise in 2015 to 6-7 million tons in 2020 – 10,9 million tons. By the end of 2010 the volume may reach 2.5m-ton high, ie, crude exports is projected to surge in 9-10 years by four times.
At present, there are two refineries operating in Turkmenistan of maximum capacity of 15 million tons a year, exports of petroleum products is growing. In particular, by the end of 2010 it is planned to reach the level of export diesel fuel at 1.35 million tons, of fuel oil - more than 1.4 million tons, of gasoline - about 800,000 tons, of kerosene and gasoline - about 400,000 tons , PP – 450,000 tons.
Part of this flow can go through the waterways of Russia to the Black and Mediterranean seas. Turkmenistan crude oil is shipped to Iran for domestic consumption and the region of Gulf of Oman via the Iranian Neka port (900ths tons as of January-June 2010), but after the embargo on shipments to Iran in the summer of 2010, much of that amount was moved to the Baku ports (Georgia) and Makhachkala (Russia). From Makhachkala Turkmen oil is supplied via pipelines to Novorossiysk. During January-November 2010 total throughput of liquid bulk cargo in the port of Makhachkala totaled 3,664,000 tons.
Part of this flow can go through the waterways of Russia to the Black and Mediterranean seas. Turkmenistan crude oil is shipped to Iran for domestic consumption and the region of Gulf of Oman via the Iranian Neka port (900ths tons as of January-June 2010), but after the embargo on shipments to Iran in the summer of 2010, much of that amount was moved to the Baku ports (Georgia) and Makhachkala (Russia). From Makhachkala Turkmen oil is supplied via pipelines to Novorossiysk. During January-November 2010 total throughput of liquid bulk cargo in the port of Makhachkala totaled 3,664,000 tons.
Petroleum products are delivered to the ports of Makhachkala and Baku from the port of Turkmenbashi by tankers or ferries then loaded to rail tanks and transported to ports in the Baltic Sea or in the southern Russian ports of Novorossiysk, Kavkaz, Yeisk, Tuapse and Feodosiya (Ukraine). Besides, the oil cargo from Turkmenbashi port is shipped by river-sea-going oil tankers through Astrakhan via inland waterways to the Azov Sea and further into the Black Sea ports in Romania, Bulgaria and Turkey.
Turkmenistan plans to boost the Turkmenbashi oil terminal’s capacity to 12 million tons a year by 2012.
Turkmenistan plans to boost the Turkmenbashi oil terminal’s capacity to 12 million tons a year by 2012.
The country also supplies to Russia LNG by Makhachkala-Turkmenbashi ferry service that has been operating since 2006. Currently, there are only two ferries - Makhachkala-1 and "Makhachkala-2 operating on the service, since Makhachkala port’s facilities infrastructure was not prepared for accommodation of projected four LNG carriers.
Russia sees more hydrocarbons from Turkmenistan
Growth prospects of oil, petroleum products and liquefied gas trade flows from Turkmenistan may create additional opportunities for the development of the Russian Caspian ports, shipping companies and shipyards. Currently, the shipbuilding capacity of Turkmenistan, Azerbaijan and Kazakhstan does not allow construction of the required tonnage, while the enactment of the Russian law encouraging shipbuilding and shipping industry gives the Russian shipping and shipbuilding companies additional incentives and advantages for creating a tanker fleet.
Noteworthy, some of the Russian shipowners have placed orders for new ‘river-sea’ tankers. This is largely due to aging the existing Russian tanker fleet and new IMO requirements effective from 2015 for oil tankers (double hull with certain characteristics), as well as business diversification.
In particular, the Moscow River Shipping Company (MRS) ordered three newbuilds, river-sea-going 6,600dwt tankers (project RST-25) at the shipyard Rybinsk-based Nobel Bros Shipyard Ltd. (Yaroslavl region). MRS’ CEO Konstantin Anisimov, had said the new tankers would also be operated during winter in the Caspian, Black and Mediterranean Seas. Nizhny Novgorod-based Krasnoye Sormovo Shipyard has a portfolio of oil tankers orders including newbuildings for Turkmenistan and Kazakhstan.
In particular, the Moscow River Shipping Company (MRS) ordered three newbuilds, river-sea-going 6,600dwt tankers (project RST-25) at the shipyard Rybinsk-based Nobel Bros Shipyard Ltd. (Yaroslavl region). MRS’ CEO Konstantin Anisimov, had said the new tankers would also be operated during winter in the Caspian, Black and Mediterranean Seas. Nizhny Novgorod-based Krasnoye Sormovo Shipyard has a portfolio of oil tankers orders including newbuildings for Turkmenistan and Kazakhstan.
Safinat Group actively engaged on the market of shipment of Turkmenistan’s crude oil, petroleum products and liquified gas operates a fleet of six oil tankers and an LNG carrier (save several dry bulk carriers). The Group also operates as well the only in southern Russia liquefied petroleum gas terminal at the port of Temryuk. Besides, the company runs an ambitious shipbuilding program and projected creation of is own shipbuilding facilities in Russia (read more about its plans in the Safinat Group’s Vice-President Ivailo Getsov’s interview with PortNews, Feb. 8, 2010).
Another terminal in the southern basin, Tamanneftegas’ LPG Terminal Phase1 is scheduled to be launched in February 2011. The Terminal P1 includes construction of a LPG transshipment facility of annual capacity of 1 million tons (including 750,000 tons of propane and 250,000 tons butane), crude oil terminal for handling 5 million tons per year (10 tanks of 40,000 m3 and two unloading racks for 72 rail tanks each); an offshore pier with two LPG berths and two crude oil berths. (Read more on the development of Caspian Sea ports of Russia in the PortNews’ journal "Port Service. Bunker market. Half Year Report, 2010”).
Foreign oil terminals, handling Turkmenistan freight flows, have their own extensive development programs. For example, the capacity of Azerbaijan-based Dubendi terminal is projected at 12 million tons (now it’s 1,5m tons), of Sangachal terminal – at 34 million tons in 2012 (linked with the Baku-Tbilisi-Ceyhan project), Turkmenistan’s LPG Kiyanly Terminal – at 200,000 tons. The Iranian ports also plan to boost cargo throughput, but their development is limited by international sanctions and the general instability of the international situation around the country.
The main rival of the Russian routes in the Caspian region may become the TRACECA project (Europe-Caucasus-Asia corridor). The project was adopted at a conference in Brussels in May 1993, which was attended by ministers of trade and transport of eight TRACECA countries (five Central Asian republics: Republic of Kazakhstan and three Transcaucasia republics). The mentioned above countries are implementing a EU’s program of technical assistance for the development of transport corridor East-West of Europe, along the Black Sea through the Caucasus and the Caspian Sea to Central Asia.
Vitaly Chernov