Anton Pyatkov: “The year of 2017 is a landmark for us”

In 2017, Port Management Company LLC is going to complete implementation of the largest coal port project – to put into operation Phase III of Vostochny Port JSC. Anton Pyatkov, Director General of Port Management Company, tells IAA PortNews about this project and about the logistics of Russian coal exports.

- Mr. Pyatkov, could you please summarize the results of sea terminals run by Port Management Company in 2016? Do you continue to have the status of the largest port holding in Russia?

- Over the year of 2016, sea terminals run by Port Management Company considerably increased their throughput and achieved yet another record in terms of shipments. Vostochny Port JSC transshipped 23.5 mln t of export coal, Rosterminalugol JSC - 18 mln t.

Port Management Company is still the country’s largest coal holding. According to preliminary results, throughput of all its terminals totaled 41.5 mln t in 2016, a 3-pct increase, year-on-year. Among the largest companies managing sea coal terminals in Russia we hold the leading position. The share of the company in coal transshipment via all ports of Russia exceeds 30%. With the commissioning of Vostochny Port’s Phase III scheduled for autumn 2017, the stevedoring company will boost its annual throughput to 39 mln t by 2019. Total throughput of the two ports will make some 57 mln t per year. This will certainly allow for considerable strengthening of our position as the largest coal port holding in Russia.

- What is the forecast of Port Management Company as regards the completion rates of Vostochny Port’s Phase III?  When are the new facilities to be launched?

- The year of 2017 is a landmark for us. According to the schedule, Phase III of Vostochny Port will be put into operation in September. We enter the new year with the assembled equipment which shapes a state-of-the-art coal terminal – there are two stackers and four reclaimers, wagon dumpers and conveyors at the port. The new equipment will be started stage-by-stage without a load from about April. In May we are going to launch the port’s Phase III under load. By September all the equipment will be tested. Simultaneously with those tests we will arrange test shipments from the new terminal. In September it will be put into operation.

Besides activities at the port we perform parallel works on the project’s railway component. In compliance with Russian Railways specifications, Port Management Company and Vostochny Port are building two railway yards, a public and a non-public one.  Upon completion of the construction works the public yard will be signed off to Russian Railways. Our investments into construction of the railway infrastructure make RUB 5 bln with total investments in Phase III making RUB 27.

- Following the recent top-level talks between Russia and Japan I have to ask about interaction of Port Management Company with its Japanese partners. Are you satisfied with the equipment supplied from Japan?

- Vostochny Port has a deep history of partnership with Japanese manufacturers – equipment of Mitsui Miike Machinery operated at the port for almost 40 years (from December 1978) has confirmed its high reliability and technical efficiency. We have chosen a reliable supplier of equipment for many reasons. Operation of a coal port today is a thoroughly elaborated process involving highly sophisticated equipment. To ensure efficient transshipment it is important to guarantee uniformity of technological operations for each production facility, develop a unified system of technological operations, maintenance and repair support, regulatory framework, have stock reserves of units/components/spare parts. Dealing with well familiar but upgraded equipment is very important for the port personnel – they need minimum time for familiarization with equipment, they can not only operate it correctly but also improve the process of operation.

For example, almost all equipment of the port’s Phase III is to a great extent the know-how of our specialists. They apply their long experience of operation and knowledge of the material base, they always work closely with manufacturers to develop technological solutions. Our crushing and milling equipment allows for making coal of the highest export quality.

It is essential that new equipment at Vostochny Port is used to handle innovative open-top wagons of increased capacity being actively introduced by Russian Railways. It is additional opportunity to build up the turnover of the port.

- How high are the requirements of coal consumers in Japan? Are they satisfied with Russian coal quality?

- Japan is a premium market, its consumers need a high quality Russian coal without contamination, complying with standards set by production companies. Our Japanese partners pay attention to environmental aspects of coal shipments, schedule guarantees, reliability of the stevedoring company. In 2016, Vostochny Port boosted coal supplies to Japan by some 30%. Japan has become an important partner of the port, it accounts for about a quarter of the port’s throughput.

- Do you think transshipment capacity of Primorye is sufficient?

- Transshipment capacity depends directly on consumers’ demand and on railway infrastructure.  Port and railway infrastructure in the Far East of Russia should be upgraded in view of the forecasted growth of the demand in the countries of the Asia Pacific Region (APR). Many of the announced stevedoring projects can face underloading of terminals due to the deficit of BAM and Transsib capacity. Expansion of transshipment capacity at the ports is reasonable if railway capacity ensures the deliveries of required volumes.

- What can we expect from the markets of Russian export coal in 2017 and in the coming 3-5 years? What trend is expected? What are our primary consumers?

- Current reduction of coal generation in the energy balance of European countries is compensated by the growing demand in APR countries that remain to be the largest consumers of coal. Today, coal is among the cheapest and most available energy resources in the world which is crucial for the developing countries showing demographic increase and high growth rates of industry development.

The International Energy Agency says it will take long time for APR countries to shift to alternative sources of energy like those used at the developed European states. The trend of stable demand and growing consumption will hold on. In general, worldwide demand for coal will grow, mostly due to India, Indonesia, Turkey, S. Korea, Vietnam and other APR countries. The International Energy Agency forecasts the growth of global demand for coal by almost 200 mln t in the coming five years – to 5.64 bln in 2021. Despite the falling consumption of coal in China it will account for 50% of the global demand in the mid-term period.

Premium markets of Japan and S. Korea, as well as China, Taiwan, Malaysia, Vietnam, Philippines, Thailand, Sri-Lanka etc. will remain key directions of coal shipments from Vostochny Port. Rosterminalugol will mostly ship coal to the Western Europe, Barasil, Turkey, Israel and Morocco.

Interviewed by Inna Geinits