Russian ports have new development strategy

Rosmorport has finalized the Russian Ports Development Strategy project intended for the period until 2030. According to the document, until the indicated period the major volume of Russian cargos flow should be shifted to domestic ports now shipped largely via the neighboring countries’ ports. The project also provides for reduction of exports share in the total cargo traffic at the nation’s ports.

Destined to be raw materials supplier

The Strategy development was aimed to prepare a document that would guide the Russian government and all stakeholders when considering some investment projects. The strategic plans are expected to result in reduction of share of Russian exports transshipped through the ports of neighboring countries (the Baltic States, Scandinavia and Ukraine), as well as the balance of outbound and inbound cargoes shipped through domestic ports (today exports prevail), with a general increase in cargo volumes by nearly twofold, to 985 million tons (projected numbers).
The drafters presumed that there will be no major structural changes on the global commodity markets over the next eighteen years and Russian hydrocarbons will remain in demand. Accordingly, oil product and coal will remain the basic cargoes to be exported from Russia, as well as LNG and LPG.

This presumption seems to be reasonable for experts of oil industry. The alternative energy and existing technologies in still are very far from being able to provide sufficient power in industrial scale.

In the next eighteen years, the crude oil supply increase will be associated primarily with the development of new deposits since the existing ones are not able to generate a significant growth. According to the Strategy project scenario, the crude volume shipped via Russian ports is expected to soar by 43% in 2030, to 276.65 million tons, of petroleum products - by 33% to 126.46 million tons.

The Strategy drafters believe coal will remain one of the main export cargoes. The commodity exports through the nation’s ports are projected to double by 2030, up to 152 million tons.

In this regard that, we may say that the coal resource base in the country is sufficient and even has a surplus, a lot more than the port infrastructure is able to handle. The main consumer of the commodity will be the Asia-Pacific region and respectively, it will be necessary to provide the cargo transportation through the Far East ports, which have announced scores of coal terminals expansion projects and construction of new ones. However, the main obstacle is the capacity of main rail arteries, the Trans-Siberian Railroad and The Baikal-Amur Mainline, which need major overhaul to enable projected port throughput growth. Moreover, according to many experts, the TSR should not be considered as a transit line in the near future, for example for containers traffic.

We can hardly expect a significant growth in Russian coal exports on the European direction, where the industry is not increasing by the same growth rate as in Asia. Therefore, those terminals in Russia specialize in handling coal exports to Europe will have to face more intense competition with its Baltic rivals. This means that they will require major investment in upgrade. And again, its capacity will be limited by the railway infrastructure delivering coal to the terminal.