Monthly Archives: June 2021

Sakhalin authorities intend to complete the reconstruction and expansion of the port of Korsakov by 2026

June 23, 2021

In total, there are 11 checkpoints across the state border in the region.

The Sakhalin authorities intend to complete work on the reconstruction and expansion of the port of Korsakov by 2026, Governor of the Sakhalin Region Valery Limarenko told TASS.

“The plan of expansion of the operating port of Korsakov includes a container terminal, a passenger terminal, a mixed dry cargo terminal, and a seafood terminal. It is planned to complete the implementation of the project and put it into operation by 2026”, the head of the region said.

According to the governor, in total, there are 11 checkpoints across the state border of the Russian Federation in the Sakhalin region. One of them is located at Yuzhno-Sakhalinsk (Khomutovo) airport, 10 others are in seaports and terminals, including those on the Kuril Islands. “The existing infrastructure of cargo checkpoints meets the needs for export and import, including hydrocarbons and coal. At the same time, passenger checkpoints require reconstruction in order to provide high-quality services to passengers and for the comfortable work of state control bodies – border service, customs, and so on. This applies to checkpoints at the seaport of Korsakov and at the Yuzhno-Sakhalinsk airport”, Limarenko said.

In early June 2021, Deputy Prime Minister of the Russian Federation, Yuri Trutnev, said that the lag in the construction, reconstruction and equipping of checkpoints across the border of the Russian Federation on the territory of the Far Eastern Federal District negatively affects international economic relations and the implementation of investment projects. He demanded that the regional authorities pay attention to these objects in their respective regions.

At the end of September 2021, Valery Limarenko announced the plans to create a large logistics hub of the Northern Sea Transport Corridor on the basis of the port of Korsakov. As part of the project, it is planned to increase the total cargo turnover of the port from 1.6 million tons in 2019 to 30 million tons by 2030, including container traffic – from 1 million tons in 2019 to 24 million tons by 2030. It is also planned to implement a project for bunkering ships with liquefied natural gas (LNG) in the port area.


Coal to Japan makes up one third of all traffic volumes on the Trans-Siberian Railway

June 17, 2021

JSC “Russian Railways” has provided figures on foreign trade traffic between Russia and Japan at the Russia-Japan Business Dialogue session held on June 5 at the St. Petersburg International Economic Forum. Bilateral traffic constitutes a significant part of the entire freight operations of Russian railways.

“In 2020, the volume of foreign trade traffic between Russia and Japan reached a record 50.2 million tons, which is 5.4% more than in 2019. Export of Russian coal to Japan of 48 million tons is almost a third of all traffic volumes on the Trans-Siberian Railway”, said Sergei Pavlov, First Deputy Director General of Russian Railways. In January-April this year, the growth of transit container traffic in communication with Japan amounted to 88% compared to the same period last year.

At the beginning of this year, a representative office of Russian Railways was opened in Tokyo. Its tasks include promoting the holding’s transport and logistics services, strengthening investment, technological and scientific and technical cooperation.

Development of the project of the end-to-end logistics service TransSiberian LandBridge is worth paying special attention. The project ensures the delivery of cargo from Japan to Europe twice as fast as by sea, without increasing its cost, S. Pavlov noted. In November-December 2020, within the framework of test container traffic on the Transsib, the dispatch of a full-set container train with Japanese cargo to European consignees was successfully implemented.


The First Passenger Cruise Ship Arrives in Magadan

June 17, 2021


The first passenger cruise ship of this year, “Professor Khromov”, entered the seaport of Magadan on June 17. The ship departed the port of Korsakov (Sakhalin Island) on June 5 for a cruise in the Sea of Okhotsk.

Passing along the coast of Sakhalin past Tyuleniy Island, where a huge rookery of sea lions and fur seals is located, the ship then proceeded to the islands of the Shantar archipelago. The archipelago consists of 15 islands, including 4 large ones. Arctic whales come to the shores of the islands at the end of June and stay here until mid-September. During this period, they change their “skin” (molt, rubbing themselves against rocky stones), and their mating games take place here. Before arriving in Magadan, the tourists got acquainted with the Yamskie Islands, which are part of the Magadan State Nature Reserve. There is a sea lion rookery and the largest seabird colony in the North Pacific on these rocky islands in the middle of the Okhotsk Sea.

 According to information from Mr. Maksim Serkalev, the ship’s master, 29 Russian passengers and 22 crewmembers embarked the ship for the final leg of the cruise. On the way from Sakhalin, researchers from the Far Eastern Branch of the Russian Academy of Sciences landed at Tyuleniy Island. Upon arrival at the Magadan port, passengers on buses went to the city for sightseeing. Upon completion of the cruise, some of the passengers will fly home from Magadan airport, and some will return by motor ship back to Sakhalin.

The ship was built by order of the USSR Academy of Sciences in Finland in 1984, later it was completely re-equipped for comfortable cruises. The motor vessel was designed for navigating the Arctic and sub-Arctic waters and has a reinforced Arc 5 ice class hull, which allows it to operate in the harsh hydro-meteorological conditions of the North – East of Russia.

The ship-owner “DVNIGMI” has leased the vessel for a long period to the New Zealand company “Heritage-Expeditions”, which together with a partner – “Northern Expedition” LLC will organize sea cruise programs in the Far East for foreign and Russian tourists. The vessel is sailing under the Russian flag with a Russian crew, port of registry Vladivostok. Five “Zodiac” motor boats are used to ensure comfortable and safe disembarkation of passengers on the unequipped coast. The Korsakov – Magadan cruise voyage is the first this year for “Professor Khromov“, the next cruise will be to Petropavlovsk-Kamchatsky and the Kuril Islands.

“Zvezda” shipyard in Primorye to build 15 vessels for LNG transportation along the Northern Sea Route

June 17, 2021

Pavel Belov, “Water Transport” / News

The keel-laying ceremony of a new icebreaking LNG carrier took place at “Zvezda” shipbuilding complex in southern Primorye.

This is a pilot ship in the series of 15 vessels ordered to service the “Arctic LNG – 2” project. It is owned by the “Sovcomflot” group. The remaining 14 ships will belong to “Smart LNG”, a joint venture between PJSC “Sovcomflot” and PJSC “Novatek”.

The length of the LNG carrier is 300 m, width – 48.8 m, cargo capacity – 172.6 thousand cubic meters.  Delivery of vessels is scheduled for 2023–2025.

“Arctic LNG – 2” LLC is implementing a project to build three technological lines for the production of liquefied natural gas with annual capacity of 6.6 million tons each and stable gas condensate up to 1.6 million tons. Mr. Yevgenii Ambrosov, “Novatek” deputy chairman of the board, earlier noted that in 2025–2026 65 vessels will conduct transport operations along the Northern Sea Route. Approximately 80% of Arctic LNG will go eastward to the Asia-Pacific region, the rest will flow to Murmansk and further to European consumers.


21 Billion Rubles to Invest in the LNG Terminal in Kamchatka

SeaNews, June 7, 2021

More than 21 billion rubles will be invested in the creation of an offshore LNG transshipment facility in the Bechevinskaya Bay (Kamchatka Territory). Prime Minister Mikhail Mishustin signed the corresponding decree No. 855 on June 2, 2021. The document was published on the website of the Russian government.

According to the document, the allocated funds will go to the construction of a 6 km-long approach channel to the seaport where transshipment will be carried out. Construction is planned to accomplish in 2023. After commissioning, the facility will remain the federal property.

The new facility in the Bechevinskaya Bay will process the transshipment of LNG from ice-class LNG carriers traveling from the Gulf of Ob to LNG carriers without ice reinforcement, which will deliver gas to consumers in the Asia-Pacific region. Part of the gas will go to meet the communal needs in the Kamchatka Territory.

The new terminal will handle about 21.7 million tons of LNG annually, the document says.

As a result of PM Mishustin’s working trip to the Far East in August last year, the Prime Minister ordered to conclude government contracts necessary for the implementation of the project.

The launch of the terminal will diversify the supply of Russian LNG, increase cargo turnover in the NSR water area, as well as meet the needs of the Kamchatka Territory in blue fuel, the report says. As a reminder, within the framework of the St. Petersburg International Economic Forum, “Novatek” and “Total Energies SE” signed a sale and purchase agreement for a 10% stake in “Arctic Perevalka” LLC, the operator of two LNG transshipment facilities under construction in Kamchatka and the Murmansk region.


The Dock for Icebreakers Is Sailing Away from the Chinese

June 1, 2021

For more than a year “RosAtomflot” has been trying to find a contractor for the construction of a floating dock, which is necessary for dock repairs of Russian nuclear icebreakers, including the new project 22220 ‘Arktika’ class, and nuclear support & maintenance vessels.

The replayed tender for the construction of a floating dock for nuclear icebreakers again ended with the recognition of only one bid – Turkish “Kyzey Star Shipyard”. The other two applications were rejected, including from China’s “Jiangsu Dajin Heavy Industry Co. LTD”, which last time filed a complaint with the Federal Antimonopoly Service of Russia (FAS). The Commission acknowledged that the Chinese shipyard “had not yet duly confirmed its experience and the availability of the necessary capacities and human resources”. Lawyers explain that now participants whose applications were rejected have five days to appeal, otherwise a contract with a single supplier could be concluded in June.

For the second time, Turkish “Kyzey Star Shipyard “ remained the only admitted applicant in the tender for the construction of a floating dock for almost 5 billion rubles. As follows from the minutes of the meeting of the Selection Commission, the tender was declared invalid. It was planned to sign a contract with “Kyzey Star Shipyard” in April. However, one of the applicants, the Chinese shipyard “Jiangsu Dajin” filed a complaint which FAS recognized as legal. As a result, “RosAtomflot” had to resume the tender and extend the collection of applications.

The dock must be built within 29 months from the date of signing the contract.    The project expenses will be fully covered by “RosAtomflot” itself.     Dock will have a length not less than 220 m, width – about 48 m, pontoon height – about 6 m, carrying capacity – about 30 thousand tons.    The maximum contract price, including zero VAT, is RUB 4.983 billion (appr. US$ 78 millions).

Russian shipyards, including the United Shipbuilding Corporation (USC), did not apply for the tender. Sources of “Kommersant” in shipbuilding noted that Russian enterprises estimated the project price 1,5-2 times higher, explaining this by high overhead costs, the lack of a ready design project, high saturation and high metal consumption. In addition, there remained the problem of free capacities, ready to quickly and cheaply build a dock with a length of more than 200 m.

Initially, three applications were submitted for the competition – “Kyzey”, which offered a price of 4.981 billion rubles, the Turkish “Epic Denizcilik ve Gemi Insaat A.S.”, whose bid was 4.45 billion rubles, and “Jiangsu Dajin” for 4.57 billion rubles. “Kyzey” was considered as the main contender for this order. The shipyard is currently completing two LNG-fueled ferries for the Ust-Luga-Baltiysk line.

Following the processing of applications, “Epic Denizcilik” was excluded from tender. Two other bids were returned to “Kyzey” and “Jiangsu Dajin” for clarification. Later, “Jiangsu Dajin” was again denied participation following the re-examination of applications. The Commission refers to the inconsistency of the company’s application with procurement documents related to the confirmation of contracts for ship construction completed in 2018-2021, drawn up in accordance with accounting rules.

Industry sources feared that the need for a new survey of all participants and a complaint to the FAS would lead to a delay in construction. Mr. Vyacheslav Ruksha, deputy head of “Rosatom” and head of the Northern Sea Route Directorate, in an interview with “Kommersant” on December 15, 2020, said that a new dock was needed “exactly by the fall of 2024”.

According to Russian legislature, if several bids submitted for participation in the procurement, but only one admitted to participate, the procurement is declared invalid, but the law allows the possibility of concluding a contract “with a single supplier”.


Commentary.Situation seems to be a little strange. Obviously, the floating dock is badly needed for servicing nuclear-powered icebreakers, which are the core of Northern Sea Route year-round operations declared as top priority strategic goal for Russia. However, the contract price seems to be inadequately low for serious contenders to join the project. The Turkish company is clearly being pushed forward even if it does not have experience related to nuclear industry (the new dock must have very specific and sensitive equipment to deal with radiation, etc.). There may even be speculations on possible political reasons for this, that Turkey today is a more valuable ally for Russia than China. Sure, it is highly unlikely. Even so, the hidden motives and the conflict of business interests around this controversial deal may impede the progress of Russian Arctic strategy…