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Two Vessels for Yenisei River Are in Construction for 5 Billion Rubles

April 14, 2021

The volume of investments in the construction of two motor vessels for line navigation along the Yenisei River in the Krasnoyarsk Territory will amount to 5 billion rubles. Both vessels have already been laid down at the “Sredne-Nevsky shipyard in St. Petersburg, the governor of the Krasnoyarsk Territory Alexander Uss told at a plenary session of the Krasnoyarsk Economic Forum on Wednesday.

Andrey Dubensky” was designed to operate on the Krasnoyarsk-Dudinka line and has a boat on board for delivering passengers to the shore

According to the Russian River Register, the average age of passenger ships on the Yenisei at present is about 30 years, and the largest vessels, ‘Alexander Matrosov’ and ‘Valery Chkalov’, were built more than 60 years ago. The large double-deck diesel-electric ship ‘Lermontov’, which had been operating on the Yenisei since 1959, was decommissioned and sold to private hands in 2015. In September 2019, a private motor vessel ‘Maxim Gorky’ was transferred to the Yenisei from the Volga River, which began operating tourist tours at the end of July last year.

“We laid down the two largest motor ships for the river at the “Sredne-Nevsky” shipyard. We have dreamed about this for 20 years. The contract value is 5 billion rubles,” Governor Uss said, specifying that leasing funds were used for this. According to TASS, one ship will be named ‘Andrey Dubensky’, the second – ‘Victor Astafiev’. These ships are designed to carry 245 passengers at a distance of up to 5 thousand km. The vessels will operate on the Krasnoyarsk – Dudinka – Krasnoyarsk route, which is socially significant for the Krasnoyarsk Territory.

Source: https://www.korabel.ru/news/comments/stoimost_kontrakta_na_stroitelstvo_dvuh_teplohodov_dlya_eniseya_sostavit_5_mlrd_rub.html

“Zvezda” Will Get Billions More

April 8, 2021

“Rosneftegaz” state holding will invest another 143 billion rubles to the construction of “Zvezda” shipyard in the Far East. The corresponding government directive was released in February as it follows from the reports published on April 8. In 2020, the Cabinet of Ministers already ordered “Rosneftegaz” to buy out the shares of the shipyard worth 100 billion rubles. Capital expenditures for the creation of a shipyard for large-scale construction were estimated at 200 billion rubles in 2019.

The state-owned “Rosneftegaz” is to acquire shares in the amount of 143.2 billion rubles as part of an additional issue by private subscription from JSC “Modern Shipbuilding Technologies” (82.35% belong to “Rosneftegaz”, 13.1% – to the “All-Russian Regional Development Bank” controlled by “Rosneft”, remaining 4.55% belongs to “GPB Industrial Investments”), which owns “Zvezda” shipbuilding facility. The release of the corresponding government directive on February 15 is stated in the financial statements of Rosneftegaz for 2020.

“Zvezda” receives unprecedented support measures from federal government. For example, the government planned to subsidize two-thirds of the rate on loans taken by a consortium of “Rosneft”, “Rosneftegaz” and “Gazprombank” for shipyard construction, In addition, the state subsidizes the construction of large-capacity ice class gas carriers and product carriers for “NOVATEK” at Zvezda. In fact, the subsidy amounts for 31.6 billion rubles for 2021–2023, which should compensate for the difference in shipbuilding costs at a Russian shipyard compared to South Korea. A metallurgical plant with a capacity of 1.5 million tons of steel and pipe products worth $ 2.2 billion also will be built in Primorsky Territory for “Zvezda” shipyard.

Source: https://www.kommersant.ru/doc/4763090

REPUBLIC OF KOMI WILL SHIP OIL, TIMBER AND COAL VIA THE NORTHERN SEA ROUTE TO ASIA AND EUROPE

April 7, 2021

Vladimir Uyba, the head of Komi Republic took part in a meeting on the organization of regular container shipping lines and coastal transportation  on sea route connecting St. Petersburg with  Vladivostok. The meeting was chaired by Yuri Trutnev,  Deputy Prime Minister of the Russian Federation.

For Republic of Komi, the organization of container traffic via the Northern Sea Route (NSR) is an extremely important area of activities that can give a new impetus to the development of the region’s economy and help dramatically increase its industrial potential, the press service of the head of the region reports.

In the summer of 2020, the Republic became the first constituent entity of the Arctic zone of the Russian Federation to proactively assist “Rusatom Cargo” in analyzing the potential for the formation of a “return cargo base” necessary to achieve a commercial effectiveness  of the NSR.

Local timber (woodworking) industry has especially significant potential for container transportation to Asia-Pacific markets. The region’s own mineral resource base (oil, gas, coal, bauxite, titanium, mining materials), as well as the products of the pulp /paper and polymer industries also have a high potential for transportation via the NSR.

Initial assessment shows that Komi has the potential to create at least 10% of the total volume of the NSR return cargo base (excluding transit).

At the same time, for the export of this cargo base, it is necessary to expand transport links to approach the ports of the NSR. For the Komi Republic, the basic infrastructure projects for the expansion of such transport corridors are the Northern Latitudinal Land Route, the “Barentskomur” railway project and the construction of the “Indiga” seaport. Currently, work is underway to create an Arctic medical cluster in accordance with international standards on the territory of Vorkuta Town to serve the crews and passengers of ships passing the NSR.

Source: http://www.metcoal.ru/news.asp?action=item&id=21660

KAMCHATKA INTENDS TO INCREASE CONTAINER CAPACITY FOR THE NORTHERN SEA ROUTE

April 7, 2021

Yuri Trutnev, Deputy Prime Minister of the Russian Federation is in the Kamchatka Territory on a working visit. Together with Governor Vladimir Solodov, he examined the berths at the Mokhovaya Bay. Within the framework of the agreement concluded with the regional government, FSUE “Natsrybresurs” is carrying out the reconstruction of  berths No. 10, 11 and 12.

The project for the complex  reconstruction of Mokhovaya Bay facility is related to the investment plans of the” Free Port of Vladivostok” resident company, which plans to create a terminal for transshipment of fish products, including freezing facilities, container platforms and a storage site for refrigerated containers. The new facility should provide balanced service to fishing fleet in Avacha Bay. In addition, the new berths will make it possible to increase the volume of cargo transshipment, including within the framework of the Northern Sea Route. Fish from Kamchatka is shipped by the Northern Sea Route via the “Seroglazka” terminal  at present which has a limited throughput capacity.” Rosrybolovstvo” Federal Agency is studying the issues of organizing a permanent shipping line along the NSR to transport fish and fish products to the European part of Russia. The draft plan will include measures to develop port, logistics and ship repair infrastructure, as well as to reduce tariffs for transportation via the NSR. FSUE “Atomflot” is ready to operate up to four flights annually for this specific cargo from 2021.

Source: https://seanews.ru/2021/04/07/ru-na-kamchatke-namereny-narashhivat-kontejnernye-moshhnosti-dlja-sevmorputi/

GOVERNORS OF FIVE REGIONS PROPOSED TO EXPAND THE NORTHERN SEA ROUTE

March 31, 2021

The governors of St. Petersburg Metropolitan City, Murmansk, Arkhangelsk, Sakhalin and Kamchatka Territories proposed to the government to introduce the concept of the “Great Northern Sea Route” and provide it with state support measures. In their opinion, the route from St. Petersburg to Vladivostok will help to increase cargo traffic between regions by sea. The governors sent a letter with this proposal to Deputy Prime Minister Yuri Trutnev in February. This letter says that at present the strategic planning for the development of the NSR almost does not cover the transport, logistics and industrial infrastructure of St. Petersburg, the Arkhangelsk, Murmansk, Kamchatka and Sakhalin Territories, but the use of this infrastructure makes a significant contribution to the progress of transportation along the Arctic route. The governors noted the prospects of sea transportation regarding to a current low level of the transport networks between these territories. . They believe that the lack of measures of state support for domestic sea transportation is holding back the formation of a stable cargo flow between the constituent entities of Russia by sea.

Source: https://www.kommersant.ru/doc/4752070

The Northern Sea Transit Corridor As the Future of Russia in Global Logistics

How to reduce the cost of container shipping by 25% and compete with the Suez Canal by developing the domestic Arctic routes.

(abridged version, without graphics and details of modeling)

Felix A.Shamrai

Director,

Arctic Center

St.Petersburg State Marine Technical University

The Northern Sea Transit Corridor (NSTC) project was initiated by “Rosatom” State Corporation in 2019 with the aim of creating a new option for global logistics market – the delivery of goods between North-Western Europe and North-East Asia via the Northern Sea Route (NSR).

The idea of ​​attracting foreign cargo to the NSR began to sound actively after the May 2018 decree of Russian President Vladimir Putin. According to the document, by 2024 the cargo turnover of the NSR should increase to 80 million tons. For comparison, in 2018 this figure exceeded 20 million tons, in 2019 – 31.5 million tons.

Attention to the NSR transit potential increased after “Rusatom Cargo” (the logistics operator of the “Rosatom” state corporation) announced its intention to become a leader in the logistics services market by attracting international transit cargo traffic to the Northern Sea Transport Corridor. The basis of transit flow, according to the idea, should be containerized cargo. The NSTC project is aimed at attracting international transit sea cargo transportation, as well as the development of the corresponding infrastructure, including the construction of the necessary transport and logistics hubs and a commercial fleet. The start of NSTC commercial operations is planned for 2027.

To test various options for the NSTC implementation we created its technical and economic mathematical model. Its reliability has been verified in one of the global TOP-3 container shipping companies. We carried out modeling of various configurations of the Project structure taking the Shanghai – Rotterdam line as basic for calculation. In our opinion, the results obtained will allow “Rosatom” group of companies to select the most effective decision on NSTC implementation.

Container transportation lives at the expense of customers, for whom the most important factor is the cost of logistics. The reliability of the container service (its rhythm) is perceived by customers as a matter of course. The cargo base of the container line depends, first of all, on the cost of container delivery – $ / TEU.

Our simulation modeling showed that the delivery of a container from port to port, without intermediate transshipments on the route, is somewhat more profitable by LNG-fueled vessels (~ 8%) via the NSTC than along the Southern route (Suez Canal). But this benefit is not enough to shift from the South to the North the already established ‘habitable’ container flows, in which tens of billions dollars have been invested.

The use of nuclear-powered container ships gives a significantly greater benefit (~ 21%) via the NSTC comparing to the Southern route. But the world’s carriers have invested too much money in this route to abandon it. And, although there are no legal prohibitions on the entry of nuclear-powered ships into European ports, all socio-political “environment protection” resources will be involved to prevent the shift of container cargo base to the NSTC.

We have also considered the possibility of creating a container line (service) with intermediary hubs, when part of the total shipment is done by ordinary container ships with remaining part of the route by ice-class vessels under icebreaker escort: Rotterdam – Murmansk – Petropavlovsk – Kamchatsky – Shanghai (4 hubs) and Rotterdam – Murmansk – Shanghai (3 hubs).

Modeling demonstrated that that the more transshipments (more hubs), the higher the cost of container service, the “smaller” the vessel, the higher the cost of container service.

The analysis showed:

● inapplicability of the transshipment scheme in both Murmansk and Petropavlovsk – Kamchatsky (684 $ / TEU via NSTC > 610 $ / TEU through the Suez Canal);

● inapplicability of container ships with a capacity of 5000 TEU compared to 24000 TEU ($ 849 / TEU5000> $ 684 / TEU24000);

● the possibility of competition between the NSTC (Rotterdam – Murmansk – Shanghai) with the Suez route (582 $ / TEU NSTC (3 hubs) ~ 610 $ / TEU Suez Canal)

To create a cargo base for a new container service (a new container line via the NSTC), it is necessary to ensure a competitive cost of delivery of one TEU. It should be at least 25% lower than through the Suez Canal. A high share of the cost of maintaining a container stock – 37% and a high share of the cost of handling crane operations – 31%. A significant share (17%) goes to the maintenance of the line’s fleet. The three above-mentioned expenses form 85% of the container service prime cost. Passage through the Suez Canal, fuel, crew costs – are not decisive in the formation of the cost.

The cost of maintaining a stock of containers should be reduced. The faster the ships go, the higher the container turnover, the lower the costs for their possession. At the same time, fuel costs will be higher. Considering that fuel has less weight in the overall cost of service, it makes sense to use more fuel at high speeds of container ships. By creating a Russian container line, we propose to create the latest robotic production of containers, thereby reducing their cost by up to 2 times. This will significantly reduce the “container” cost share in the NSTC performance scheme.

Each additional transshipment of containers increases the cost of service by ~ 15%. That is why it is so important that the number of transshipments is as small as possible. When forming the NSTC service, it is necessary to strive to minimize the number of hubs and transshipments.

We understand that Europe is unlikely to allow a nuclear-powered container ships to enter its ports (Rotterdam in particular). However, such a line without “asking” anyone can operate through the Russian hub (in St. Petersburg or Murmansk) via the NSTC to Shanghai.

The next stage of our work was the modeling of a container line between Rotterdam and Shanghai via the NSTC comparing to the Southern route. In the model, we took into account:

● containers from Rotterdam to Murmansk are delivered by 24,000 TEU class LNG-fueled container ships (450 $ / t);

● average load 20,000 TEU / ship;

● in Murmansk, transshipment is carried out on nuclear-powered ships that go to Shanghai.

● current exchange rate – 75 rubles / $;

● the possibility of high speeds of a nuclear-powered container ship in clear waters due to its high fuel efficiency;

● the possibility of high speeds of NSR passage due to the emergence of the LK-60 and LK-120 class icebreaker fleet;

● the possibility of reducing the cost of production of containers;

● the possibility of a high-latitude NSTC route was not taken into account;

● capital expenditures for the development of port infrastructure was not taken into account;

When the cost of delivery of one container reaches 25% less than that of competitors, there will be no forces that could prevent the formation of a container cargo base for the NSTC – this is the target of the entire project. We have shown the possibility of achieving the level of competitiveness of the NSTC in comparison with the Southern route by 25% ($ 575 / TEU < $ 766 / TEU), which will provide a cargo base for container transportation.

We have modelled two options of the NSTC: with the creation of a hub either in St. Petersburg or in Murmansk. The latter option is preferable for transit between the EU and China’s northeastern coast. But the route through St. Petersburg (ports of Bronka or Ust-Luga) creates benefits for Russian importers. Today the Russian client base forms a flow from Asia of about 10,000 TEU / week (0.5 million TEU / year). The cost of intermodal container delivery (40 ft.) stands for 282$./unit (Murmansk – SPb route) and 610$./unit (Rotterdam – SPb route). But if the hub is located in St. Petersburg, then the intermodal ‘tail’ disappears. Accordingly, import delivery in this case is the least expensive $ 957 40ft <$ 1836 40ft

With a comparable (through Murmansk and through St. Petersburg) containers delivery cost via the NSTC, the positioning of the hub in St. Petersburg creates for Russia a turnover worth  $ 1.2 billion / year and a net profit of $ 286 million / year. The option of hub location in Murmansk is beneficial for transit clients, but has low margins for the NSTC project itself.

Summary:

● Creation of a new global logistics route along the NSTC is possible and economically feasible for all participants: customers of container transportation, container services (container lines), ports;

● The owners of the existing container lines are not interested in NSTC, as they have invested very heavily in the Southern routes;

● It is necessary to create a new global carrier;

● Creation of a large Russian container intermodal operator for NSTC will further increase the competitiveness of the line due to benefits for Russian export-import container traffic;

● Creation of a new container line served by Russian global operator makes it possible to create container production at a price significantly lower than now. This will significantly increase the competitiveness of the line;

● It is necessary to reduce the number of transshipments on the route;

● It is necessary to develop innovative approaches to loading and unloading operations aimed at reducing its time and cost. For example: the ability to transship containers ‘board – board’ bypassing the shore;

● The main challenge for a container ship is the minimum turnaround time on the line, then fewer vessels are required. The higher the speed on the route, the shorter the route, the faster the turnover;

● Nuclear container ship provides the greatest competitiveness for a container line;

● The location of the hub in St. Petersburg ensures the viability of the entire container service via the NSTC;

● According to expert estimates, the location of the hub in St. Petersburg will require minimal investment due to the high level of readiness of Ust-Luga and Bronka seaports;

● The smaller the size of container ships relative to 24,000 TEU-class, the lower their competitiveness. 5000 TEU Arc7 container ship will never become commercially profitable due to its lack of competitiveness in comparison with the Suez route;

● The cost of icebreaker assistance is not a factor that somehow restrains the development of the NSTC.This article did not use any materials from other authors. Diagrams and tables are based on the technical and economic mathematical model built by the author. All these models are the author’s expert assessments, which were discussed with competent experts.

China to Build a Railway to Tibet

China has begun construction of a high-speed railway line that will connect the city of Lhasa in the Tibet Autonomous Region with the provincial capital of Sichuan, Chengdu City. The construction cost of the 1,800 km line is estimated at $ 49.4 billion (319 billion RMB), Nikkei Asia reported.

The road will be commissioned in 2030. The price of the railway project exceeds the price of the “Three Gorges Dam” (the gravity dam hydroelectric power station, located on the Yangtze River in Hubei province (China), is the largest power plant in the world in terms of design capacity of 22.5 GW), which cost 250 billion RMB, making the railway line to Tibet the largest construction project in China.

The aim of the project is to stimulate tourism and business travel to Tibet. Local media reports that Beijing is also looking to seize the region’s resources such as copper and lithium.

Currently, the journey by train from Chengdu to Lhasa takes about 40 hours. The transportation over the new direct railway line will be carried out at speed of 120 to 200 km / h, which is expected to reduce travel time to just over 10 hours.

“The railway project is of great importance for maintaining national unity, promoting ethnic unity and strengthening stability in the border areas,” Xi Jinping said.

This railway project is mentioned in China’s five-year plan to 2025 and its long-term goals until 2035. But the construction could face opposition from India, which is in a border confrontation with China. Water from Yarlung Tsangpo River flows to India, and construction works along the river can affect water level and quality downstream.

Source: https://www.rzd-partner.ru/zhd-transport/news/kitay-postroit-zheleznuyu-dorogu-v-tibet/

Comments:

The very fact that China is ready to invest US$ 50 billion to construction of a railway in remote and desolated region is amazing. Obviously, this project will never become commercially profitable. Rather, Beijing demonstrates the eagerness to pursue its strategic interests at any cost, and maintaining full control over rebellious Tibet is probably a worthy goal.

LNG Transshipment Terminal to Be Built in Kamchatka

March 16, 2021

The experts of “Glavgosexpertiza” of Russia studied the re-submitted design and estimate documentation for the construction of a marine liquefied natural gas transshipment complex in the Kamchatka Territory. Based on the results of consideration, positive conclusions were issued this time.

In 2017, the government of the Kamchatka Territory and PJSC “Novatek” signed a cooperation agreement, within the framework of which the construction of  LNG transshipment complex began in the Bechevinskaya Bay on the southeastern coast of the Kamchatka Peninsula, says the “Glavgosexpertiza” report.

It will ensure the transshipment of liquefied natural gas delivered from the northern fields near the Gulf of Ob River by ice-class LNG carriers to LNG carriers without ice reinforcement for further transportation to consumers in the Asia-Pacific region. Upon completion of the full construction cycle, divided into five stages, the terminal’s cargo turnover will reach about 21.7 million tons, and the port infrastructure will be able to process 657 ship calls per year. The design documentation approved by the “Glavgosexpertiza”, subject to the adjustments, envisages the construction, at the expense of NOVATEK’s investments, of roadsteads for two floating gas storage facilities (FGSF), as well as anchorage for FGSF facilities and LNG carriers with anchoring and mooring support.

In addition, at the expense of the federal budget it was envisaged to create an approach channel, a berth for the operation of a navigation safety system, antenna mast structures, container blocks for placing equipment and laser leading beacons. Thus, the commissioning of the first stage facilities involves the allocation of two separate sub-stages. First of all, at stage 1.1 an approach channel with a length of 6.6 km will be introduced, as well as floating signs to fence the channel and the terminal water area. At stage 1.2 it is planned to introduce a berth for servicing shore facilities and navigation safety systems, including aids to navigation and a vessel traffic control system. At the same time, facilities will be commissioned to ensure the transport safety of the water area and the protection of coastal facilities of federal property. In addition, changes were made to the dredging technology and the composition of the mechanisms used.

Source: Korabel.RU

Blagoveshchensk – Heihe Pontoon Bridge Crossing Opens for Chinese Imports Only

March 15, 2021

Since March 15, car traffic will open on the pontoon bridge across the Amur River between Blagoveshchensk and Heihe. Due to the restrictions imposed by the Chinese authorities and caused by epidemiological situation, Russian exports will temporarily not be carried out.

In the import direction, cargo from China to Russia will be limited to engineering equipment, steel structures and other types of similar products intended for the construction of the Amur Gas Processing Plant. The issues of organizing the import of fruits, vegetables and other goods from China will be discussed later.

Source: Pavel Belov, RZhD Partner

Comments:

Cross-border trade between China and Russian Far Eastern territories looks more and more like a one-way street. Its turnover volumes have never been large enough. Today, with heavy decline in cargo turnover via the “Primorye-I” and “Primorye-II” international transport corridors, termination of Russian fish exports to Chinese seaports and other ‘anti-COVID’ protective measures unilaterally taken by PRC the future prospects of bilateral cross-border trade look pessimistic, at least for Russian side. This trade is important for the well-being of Russians living in the Far-Eastern territories, especially the supply of vegetables, fruits and consumer goods. If the confidence in the stability of the Chinese deliveries is lost Russian importers would have to shift to ASEAN and other reliable suppliers.

Sections of the Future Coal Terminal Included in the Boundaries of Dikson Seaport

February 24, 2021

By order of the Government of Russia dated January 22, 2021 No. 109-r, the boundaries of the Dikson seaport have been adjusted. This was reported by the press service of FSUE “Rosmorport”.

The adjustments are related to the inclusion in its boundaries of one water plot and one land plot located in the Yenisei Bayand intended for positioning the offshore coal terminal facilities. It is a part of the development of the Syradasai coal deposit in the Taimyr Dolgano-Nenetsky district of the Krasnoyarsk Territory.

The explored reserves of the Syradasay deposit amount to almost 5.7 billion tons of coal of grades G (gas), Zh (fatty), K (coke) and OS (lean-caking). The deposit has one of the largest reserves of valuable coking coal.

The coal mined at the field will be transported by industrial railway to a new coal terminal in Dikson seaport, from where it will be exported to the countries of Southeast Asia along the Northern Sea Route.

At the first stage of development of the coal terminal project the planned volume of cargo transshipment will be 5 million tons per year, and within the next 3-4 years it should double. The length of the quay wall of the coal terminal will be 500 meters, and the depth at the cordon of the quay wall – up to 15.5 meters which will allow to proceed vessels of large gross tonnage.

Source: “ROSMORPORT”