• 2014 September 19

    To gasify Crimea

    Crimea suffers from transport blockade aggravated by western sanctions which results in difficulty to supply oil products to the peninsula. Crimean authorities count on the construction of a bridge over the Kerch Strait and on improvement of relations with Ukraine. Meanwhile, Gazprom suggests building a gas pipeline and switching to gas fueled transport.

    Encircled by sanctions

    Western sanctions against Crimean enterprises and transport companies put the peninsula under the blockade. As Vadim Zhdanov, First Deputy Minister of Fuel and Energy in Crimea, said at the Forum “Integration of Crimea into infrastructure of Russia’s oil product market” being held in Alushta (Crimea), foreign vessels reject working with Crimea.

    Aleksei Kolesnikov, First Deputy Director of Feodosia Company on Oil Product Supply, tells that the company included into the sanction list had to stop exporting oil products and turned to domestic market providing services for Russian companies. The company still hopes for revival of exports as soon as political tension weakens.

    As IAA PortNews was told at the port of Feodosia, there were two storage tankers at the anchorage. With their capacity of 60,000 t each, they could transship up to 1 mln t per year. However, they are not in operation today.

    As for port Kerch, it handles cargoes coming from Russia but the ferry link of Kerch alone is not able to ensure reliable supplies to the peninsula. It is because of unfavorable weather conditions frequently hindering the operation of the ferry link, passenger priority and harsh shipping conditions in winter.

    Vadim Zhdanov thinks the situation can be changed dramatically only with the construction the Kerch Strait bridge and revival of transport communication with Ukraine. So far, Crimea is an island indeed.

    Waiting for money and gas

    Besides, transport companies of Crimea experience a problem with the access to financing as former financial institutions terminated their activities. New banks appearing at the peninsula demonstrate little trust in Crimean companies. They have to confirm their reliability again. Moreover, Vadim Zhdanov says those banks set tough conditions while providing not large financing. However, their interest rates are lower than those of Ukraine’s financial institutions. Large Russian banks do not come to Crimea because of possible sanctions.

    Meanwhile, Gazprom OJSC plans building a gas pipeline to Crimea. Valery Golubev, Deputy Chairman of the Management Committee of Gazprom, says the construction can take up to two years. In this context the company considers a possibility of building LNG plants in Kerch and other regions of Crimea to supply the peninsula with environmentally friendly gas fuel as an alternative to oil products the delivery of which from mainland Russia is difficult. Due to specific logistics, oil product prices in Crimea cannot reach average level of Russia, one liter of oil products is RUB 2-3 higher in Crimea.

    Anyway, the anticipated measures - construction of a bridge or a pipeline – require several years during which the citizens of Crimea will have to survive in the situation of half blocked transport communications if Russia-Ukraine and Russia-West relations do not improve considerably.

    This brings the dilemma between the desire to attract as many tourists as possible and the necessity to deliver cargoes to the peninsula as both flows run along the same Kerch route. According to Vadim Zhdanov, the number of tourists in 2014 has reduced by a half as compared with the previous years. By today, Crimea was visited by 2.7 mln tourists (by the end of the year this number is to grow to 3 mln). The official also said that the attempt to bring more tourists this year played a low-down trick, having bottlenecked the cargo flow.

    Vitaly Chernov