• Sabetta needs builders and sailors

    2012 July 22 :

    A cornerstone laying ceremony for the port Sabetta has been held on the Yamal Peninsula. The port construction is scheduled for August 2012, but the contractor has not yet been chosen - the results of the tender for contract were declared invalid. Now the Ministry of Transport proposes the government to appoint by its order a contractor. In its turn, Novatek is looking for a shipping company for the project.

    When dreams come true

    The commemorative capsule laying ceremony into the foundation of the new port of Sabetta on the Yamal was held on July 20, 2012. Investment in the project is estimated at RUB 75 billion. The federal government will inject RUB 49 billion and approximately RUB 25 billion - private investors (Yamal LNG, shareholders - Novatek and Total). The port project will be implemented as part of Yamal LNG project, which was designed to develop Yuzhno-Tambeyskoye gas condensate field on the Yamal Peninsula and the construction of gas liquefaction plant of capacity of 15 million tons of LNG and up to 1 million tons of condensate per year. The plant’s first phase commissioning is scheduled for 2016. The LNG produced there is supposed to be transported on the Northern Sea Route, that’s why the port of Sabetta was needed. The investment decision on the project will be made within six months after the state examination to be held in August 2012, Novatek’s head Leonid Michelson said at the official foundation stone laying ceremony.

    Sabetta is to become export port, which Phase 1st (2017) throughput should reach 5 million tons per year expandable to to 20-25 million tons. The port project includes an international airport construction as well, which will be completed in December 2013.

    So, the construction of the port of Sabetta will be conducted on public-private partnership scheme and the Russian government's role in it is a key one, since the project is of strategic importance. The port project will help boost social and economic development of Russia’s northern territories, and strengthen the role of Russia in the Arctic, the formation of alternative export shipping lanes of raw materials.

    The federal government will be funding dredging, construction of a navigable channel and Vessel Traffic Management and Information Systems, and Yamal LNG (the main shareholder of Novatek) will construct surface facilities of port infrastructure.

    As Rosmorport press service told PortNews, the company acts as the customer-builder of federal property of the port: a 50-km-long shipping channel, the operating area of approach channel, the facilities of VTMIS and the provision of radio communication with vessels, objects of the The Global Maritime Distress and Safety System (GMDSS), NAVAID and other systems for support of navigation safety, facilities and means of an automated information system (AIS), etc. The projected cost for the facilities of Rosmorport is valued at RUB 36.5 billion. The volume of preparatory work is 17 million cbm, of the main stage - up to 100 million cbm (early stage - 2014-2016).

    The berths will be built by a private investor - Yamal LNG. The construction will be performed in two phases. In the first phase: the construction of piers for handling large LNG plant process modules and building materials. In July 2014 the new port is to take the first module. The second phase includes construction of berths for handling LNG and gas condensate

    From scratch to excavation one pace

    Preparatory phase should begin in August and be completed in October 2012. However, the contractor has not yet been selected. The fact is that in June 2012 Rosmorport invited bids for contract for construction of facilities of the port of Sabetta, including the creation of shipping approach channel in the Obskaya Bay (as part of preparatory phase). The maximum value of the contract was set at RUB 6,965,619,340. Three competitors - Ballast Ham Dredging, JSC MezhRegionTruboProvodStroy and Mordraga Ltd. submitted applications for participation in the tender. Nevertheless, the auction commission on July 12, 2012 recognized all three proposals inconsistent with the conditions of the bidding (on the proposed price, terms and other parameters), and declared the tender invalid.

    Deputy Transport Minister of Russia Viktor Olersky told reporters at a briefing on July 20 that at present the contractor will most likely will be chosen by the government’s decree (this is a legal option). In the next two years the government will allocate for the port RUB 7 billion.

    As to private investors, there is a slight probability of emergence of new investors who would be willing to participate in the project, Leonid Michelson said at the briefing. He noted that the participation of Gazprom in Yamal LNG is not expected, however, Novatek and Gazprom have created a working group to explore the possibility of joint development of a deposit near to Sabetta. The possibility to export Gazprom’s gas via Sabetta will be considered after the investment decision on the project.

    In the meantime, while the state is looking for a contractor Novatek is seeking a carrier that would transport Yamal LNG cargoes. The company plans to invite bids shortly to choose a shipping company. The winner will be recommended a shipyard to order the Arctic vessels, which projects had already been developed, said Michelson.

    Vitaly Chernov