• 2018 August 10

    Import substitution in stevedoring sector

    Transshipment of Russia’s foreign trade cargo via the ports of the Baltic states and Ukraine in the first half of this year fell by 7.5% to 22.2 million tonnes. Their share has decreased from 6.51% in HI’2017 to 5.88% in HI’2018. High dependence is still observed in the segment of dry bulk cargo while the development of required infrastructure has begun.

    According to RF Ministry of Transport, 19.14 million tonnes of Russian cargo was delivered to the Blatic states’ ports in HI’2018, 10.1% less as compared with the same period of 2017. The decrease was registered in the following segments: coal – 13%, metal – 4%, liquid bulk cargo – 2.6 times. However, transportation of grain grew 2.8 times, mineral fertilizers – by 9.5%, ore – by 9.2%.

    Transportation of Russian cargo to the ports of Ukraine increased by 13.1% to 3.06. The following segments demonstrated the growth: coal – 9.9%, ore – 1.6 times. Meanwhile, transportation of mineral fertilizers dropped by 46.5%, liquid bulk cargo – by 24.9%.

    This shows that the Baltic Sea basin lacks deep-water terminals dedicated for handling mineral fertilizers, grain and ore, Southern basin – terminals for handling coal and other dry bulk cargo.

    Hopes for Taman

    The largest project aimed at phasing out of imports from the stevedoring segment is the construction of dry cargo area in the Taman port with annual capacity of some 90 million tonnes. As it is known, this project was initially linked to the construction of a transport route to Crimea. In June 2018, Russian Railways announced its plans to launch the traffic by railway approaches to the Kerch Strait bridge in late 2018. This section is 39.7 kilometers long. That will be yet another step towards implementation of this large-scale project aimed to cover the deficit of dry bulk transshipment facilities.

    Taman is also seeing the development of its existing facilities owned by OTEKO. In the beginning of 2018, OTEKO and MC VostokCoal agreed on construction of a hub in the port of Taman to supply blended coals for pulverized coal injection (PCI) to the world market. Blended coals will be produced on Vostochny and Kiyzassky coal open pit mines, Novosibirsk and Kemerovo regions accordingly. In 2018, deliveries will start from 0.5 million tons / month and can be further increased to 1-1.2 million tons / month. Target supply markets are India, China, Brazil, Europe.

    From Primorsk to Ust-Luga

    In Saint Petersburg, the key point of stevedoring business development is Bronka port. Besides, there is a plan to build terminals for shipment of liquefied natural gas (LNG).

    At the St. Petersburg International Economic Forum (SPIEF), the city of Saint Petersburg and Port Bronka investor OOO Fenix signed an agreement on further development of the project with investments of RUB 21 billion. 

    The focus on shifting port facilities from the city center and advantageous location of Bronka in terms of transport accessibility as well as availability of free space for further developments lets hope that stevedoring activities will develop in this area.

    Another large port in the Baltic basin is Ust-Luga. It is also looking into development. Ust-Luga Company and Novotrans Group are developing a joint project known as Lugaport.  It is a multifunctional transportation/transshipment complex including terminals for transshipment of grain, food, dry bulk and general cargo. The facility’s annual throughput capacity is 20-25 million tonnes with handling of 1,100 railcars/day. 

    Yug-2 terminal continues diversification of cargo flows. In 2015 it started handling containers with mineral fertilizers of Phosagro, this year it has started handling coal. Besides, the terminal is handling oversized cargo for Eurochem plant being built in Kingisepp (Leningrad Region). This company also has its own project on construction of a terminal for transshipment of mineral fertilizers at the port of Ust-Luga with annual capacity of 7 million tonnes (total investments – about RUB 12 billion).

    Among the promising plans is the project on creation of a dry cargo area at the port of Primorsk with annual capacity of 36 million tonnes (mineral fertilizers, metal scrap, grain). Investments are to total some RUB 70 billion. Federal Marine and River Transport Agency (Rosmorrechflot) has already approved the Declaration of Intention.

    Murmansk vs Kirkenes

    On 9 August 2018, PAO NOVATEK announced that Yamal LNG launched the second LNG train and dispatched the first cargo from this unit. According to data provided to IAA PortNews, NOVATEK is looking into arranging offshore transshipment of LNG exported by ice-class tankers from port Sabetta under Yamal LNG project. That would let shorten the leg involving vessels with high freight cost and ensure shipment of permanently growing LNG volumes. Vessels ordered for Yamal LNG are still under construction at the S. Korea shipyards.  

    Some media have earlier published information about possible arranging of LNG reloading in the Norwegian port of Kirkenes. When responding to the request of IAA PortNews, representative of Norterminal said that those articles are “largely based on speculations”.

    Management of Kola Oil Terminal Co Ltd, in its turn, is going to offer its two offshore transshipment facilities located off the port of Murmansk for transshipment of NOVATEK’s LNG. The company’s facilities are not loaded so far. Each unit earlier handled up to 8 million tonnes of hydrocarbon units. If necessary, the company is ready for additional equipment of its facility.

    Among significant projects in the Arctic Basin are the construction of a deep-water port in Arkhangelsk and comprehensive development of Murmansk Transport Hub as we covered earlier >>>>

    In general, Russian stevedoring industry continues its steady development towards redirection of domestic cargo flows to Russian terminals. Yet,  some segments, especially mineral fertilizers, grain, coal and ore still feature high dependence on ports of neighboring countries. The related projects are always on the agenda in Russia though their progress is not as fast as we wished it to be.

    Vitaly Chernov