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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…

Syrian Tanker Attacked by Drone

April 24, 2021

The Syrian Oil Ministry announced a fire on one of the tankers off the coast of the Syrian city of Baniyas, probably caused by an attack from a drone, the Syrian state agency SANA reported with reference to the ministry. Earlier, the department announced the elimination of a fire that broke out on one of the tankers located off the coast of the city of Baniyas in the Syrian province of Tartus. The ministry said that the fire, in their opinion, arose after the tanker was attacked by a drone from the territorial waters of Lebanon,” the statement said.

Damascus suggests that an Israeli drone attacked the tanker off the coast of the Syrian city of Baniyas, on which the fire occurred, Lebanese TV channel “Al-Mayadeen” reported, citing sources. “Damascus assumes that the drone that attacked the Syrian oil tanker was Israeli,” the channel’s sources said. A tanker burning off the coast of Syria was attacked by two shells, according to the Iranian TV channel “Al-Alam”, citing informed sources. “Sources said that the Syrian oil tanker was attacked by two shells. The first hit the front of the tanker, slightly damaging it. The second shell fell on the deck and caused serious damage,” the channel writes. The TV channel noted that as a result of the incident, no human casualties had been recorded.

Source: RIA Novosti


Mikhail Kholosha,  Sergei Smirnov, Russia Gotov Dugerjav, Mongolia

In early 2020, transport and logistics experts from Russia, China, South Korea, Mongolia and Japan took part in a large-scale research project to analyze the reasons for the insufficient functioning of the international transport corridors (ITC) in the “Greater Tumen Region” and to develop proposals to overcome existing bottlenecks in regional logistics.

Initially, the concept of creating ITCs was based on the fact that a cross-border corridor is not just a dogmatically understood transport route serving freight flows of bilateral trade between neighboring NEA countries. The ITCs were supposed to become an effective mechanism for strengthening regional integration, optimizing land and sea routes, ensuring the smooth movement of transit cargo through the territory of the countries participating in the GTI program  Unfortunately, this concept has not yet been fully implemented.

ITCs are a set of separate transport routes today, in some places interconnected, but not united into a regional transport and logistics network. ITCs are rigidly tied to specific transport hubs (border crossing points – BCP, seaports) and serve fixed traffic flows. If difficulties arise at one ITC, its cargo flows cannot be painlessly redirected to another route.

The following factors generate organic flaws in the concept of individual ITCs:

  • NEA countries in contrast to, for example, the European Union, have great differences in geographic location, economic development, political system, demography, religion, language and writing. This cannot but affect their strategic priorities and approaches to regional transport and logistics integration. For example, the Republic of Korea and Japan are isolated from continental transport routes and are forced to look for complex options for the delivery of export-import cargo. China experiences significant imbalances between the economically developed South-East and the landlocked North-Eastern provinces included in the GTR. Mongolia as a land-locked country is completely dependent on its “great” neighbors for the transportation of foreign trade goods. The DPRK, which traditionally follows its own unique path, is not yet ready for even the minimum level of cooperation in the field of transport and logistics, although its contribution could be very significant. Russia is probably the only GTI member that, in principle, is not interested in expanding access to transport communications of its NEA neighbors for the delivery of its own cargo, but needs to attract a foreign cargo base and investments to integrate into the regional economy and modernize domestic infrastructure.
  • GTI participants develop their internal transport communications and logistics infrastructure based on their own priorities and goals. This does not always take into account the needs and specifics of neighboring states, especially the problems of the development of supranational (regional) economic structures. This is reflected in the disproportionate development of trans-border communications and service infrastructure on different sides of the common border, different procedures for customs, immigration and other types of control of goods and passengers, sometimes in the appearance of suspicion and misinterpretation of the actions of the other side, causing inadequate “response” measures. The latter circumstance, in particular, hinders the implementation of the Chinese ‘Belt & Road’ initiative.
  • Continuing the above issue, one cannot but mention the unresolved problem of lack of proper coordination between neighboring parties in terms of design, construction and modernization of transport infrastructure and BCPs, despite the fact that these facilities serve common freight and passenger flows and have a common technological cycle. As a result, adjacent BCPs sometimes have inconsistent operating modes and different throughput, interconnecting roads with different standards and technological operating procedures, and even occasional facts when a BCP is unilaterally built on one side of the border, but cannot function due to a lack of similar facility on the opposite side.
  •  NEA has only rudimentary institutions of regional integration, mainly in the field of economics and environmental protection. This is in line with the dominant regionalization model in East Asia, which puts the economy at the forefront, preferring not to touch sensitive areas of politics and security. As the experience of combating the COVID-19 pandemic shows, restoring the normal functioning of the regional economy without the consolidated efforts of the authorities of all regional countries will require much more time and resources.
  • Russia, as noted above, occupies a special position in regional transport and logistics sector. The volume of Russian cross-border traffic in the GTR is significantly less than that of neighboring economies. However, the dependence of the Far East of Russia on imports from the NEA countries is high, which was shown by negative experiences of the periodic closure of selected ITCs during a pandemic. What is more important in the context of this article, the Far Eastern territories of Russia have a huge, but currently grossly underutilized transit potential, which is attractive for shippers from the NEA economies.

Let’s add some other problems inhibiting the progress of ITCs:

The problem of statistics. The collection and analysis of statistical information on freight turnover and freight traffic have the following features and problems of accounting.

1. Differences in the accounting of goods by nomenclature. At the same time, there are national “statistical” and “linguistic” features;

2. The difference in measurement units;

3. Differences in accounting policies and the use of different sources of information.

The existing system of cross-border bilateral trade and transport organization is not favorable for transit transportation. There is controlled export and import flow in the transport management system, which cannot support transit, and as a result, the bilateral organization of transport management leads to increased tariffs and inhibits multilateral transit.

  • Insufficient development of BCP’s infrastructure, especially in Russia and Mongolia. Its modernization, of course, is the sole area of ​​responsibility of each ‘host’ country, though BCP key infrastructure parameters and operational procedures should be mutually agreed with cross-border partner. At the same time it should be noted that in 2020 significantly less cargo was transported through the BCPs in Southern Primorsky Territory of Russia than their current technical capabilities allow. The reason for this was quarantine restrictions, unilaterally point wise introduced by the provincial authorities of the PRC. Russian side as a rule was not notified in advance on the closure of the cross-border communication. It is very difficult to redirect even a part of the export-import cargo flow to the operating checkpoints belonging to other ITC today.
  •  Another serious problem is the rigid routing of transport arteries connecting the Russian Far East and neighboring countries of Northeast Asia, especially with regard to seaports. It combines the problems of land transport routes tied to specific ports, and the specialization of the ports themselves, unilaterally determined by their current owners solely for tactical reasons, while not taking into account long-term integration trends in NEA economy.

First of all, this refers to the expansion of major Russian coal exporters which seek to establish control over port facilities in the Pacific coast of Russia and export coal, as long as there is a market slot for this. However, the ever-increasing flow of coal has already led to overloading of TSR and BAM, the modernization progress of both has not kept pace with the appetites of coal tycoons. In a number of Russian ports, the environmental situation has seriously deteriorated due to the transshipment of coal in the open way. But, “green” priorities are becoming more widespread in the world, mostly caused not so much by concern for the environment as by political considerations, which resulted in a firmly taken course towards decarbonization of the global economy. This can lead to a forced termination of the massive purchases of thermal coal not only in Russia, but also in Mongolia and the North-Eastern provinces of China.


Let us address separately the situation with the transport and logistics sector in Mongolia. In many respects, Mongolia and Russia are experiencing similar problems in this area – underdeveloped infrastructure, especially at border crossing points, insufficient coverage of the territory by railways and roads, the predominance of bulk raw materials (coal, ore concentrate) in exports. It is logical and historically justified to resolve these problematic issues on the basis of common approaches, taking into account 100 years of special relations between our countries. At the same time, we should solve them basing on the “Win-Win” approach, not to the detriment of our GTI partners but in the common interests, jointly shaping a new concept of a joint transport and logistics network in Northeast Asia.

The issue of transportation of export coal and ore concentrates from Mongolia is especially important. Currently, Mongolian coal is almost completely transported by rail along the Tianjin – Mongolia Transport Corridor in the Chinese territory which is greatly overloaded. Therefore, when the Tavantolgoi mining megaproject in the Gobi Desert, Mongolia’s main export hope, is put into operation, the question of delivering its products to seaports for export to consumers from the Asia-Pacific region will become acute.

Of course, the ideal way to solve this problem could be the creation of a new energy / industrial cluster in the area of ​​the deposit, including a copper factory and a large thermal power plant operating on local coal. Modern technologies make it possible to generate electricity on the basis of burning coal with minimal damage to the environment. The new powerful TPP will be able to completely solve the problem of energy self-sufficiency for Mongolia. This strategic goal was listed the second in the program of Prime Minister U. Khurelsukh, which largely contributed to the impressing victory of the Mongolian People’s Party headed by him in the 2020 parliamentary elections. It is much easier and cheaper to organize the transportation of high-purity copper in ingots than bulk millions of tons of coal and ore. In addition, this product is guaranteed a high demand for many years, in contrast to the thermal coal.

However, it is clear that despite the undoubtedly bright prospects for the Gobi Desert energy / industrial cluster project, its implementation will require many years and significant investments, in particular, in the creation of a network of support transport infrastructure.

With the start of work on the Tavantolgoi field (2010), the Mongolian side intended to build about 4,000 km of new railway lines, covering the entire territory of the country. However, despite the participation of reputable global companies in the development of the project, such as McKinsey, the program very soon got mired in a series of corruption scandals and almost led to the bankruptcy of the entire national economy. The truth is that even if Mongolians could manage to implement what was planned 10 years ago even partially, this alone would hardly solve the problem of further transportation of Tavantolgoi products.

Therefore, today the Mongolian side is considering more than 10 options for coal transportation routes through overland communication lines and seaports of China, Russia and possibly, the DPRK.

It should be understood that it will not be easy to organize a large-scale transportation of Mongolian coal via the TSR, given the likely resistance from Russian coal corporations which see Mongolia as a serious market competitor. The Russian government, of course, can provide Mongolian shippers with a certain quota for the delivery of coal through TSR or BAM, but in the long term the problem must be solved using market methods. Thus, Primorye-1 ITC  has a certain throughput reserve capacity on the PRC territory and in principle, is capable of transporting large volumes of Mongolian bulk cargo. There are some other options as well. But for this it is necessary to solve one major problem – to move from a non-flexible system of corridors to a network organization of transport and logistics processes in GTR.

How do experts see the general outlines of the creation of a new network structure?

At the first stage, it is advisable to create local networks by uniting separate routes and looping the existing / under construction communications and logistics hubs where it is feasible.

Subsequently, we can consider the prospect of creating a unified transport and logistics network covering the entire territory of the GTR and even beyond its geographical mandate. The modern challenge for GTR and NEA is the creation of the Integrated Sea-Land Multimodal Transport Network incorporating a set of routes of all means of transportation. Moreover, it is about creation of the integrative infrastructure uniting transport and other industries. Major infrastructure modernization is necessary to create such a network, including both ‘physical’ (Hard) infrastructure (routes, bridges, hubs, warehouses, ports etc.) and operational procedures (Soft) – digitalization of logistics processes, harmonization of different national standards, joint procedures for emergency response. The road ahead is long and challenging. But, the results may elevate our region to a brand new dimension.

This is an abridged version of the article. Full text is available for registered readers only.

South Korean Companies Will Invest 11.8 Billion Rubles to a Fishing Port Project in Primorye

April 15, 2021

South Korean companies are investing 11.8 billion rubles in the implementation of the project to create the Podyapolsky seaport in the Primorsky Territory, the press service of the Ministry for the Development of the Russian Far East informed following a working meeting between the minister Alexei Chekunkov and RoK Ambassador to Russia Lee Sok Bae.

During the meeting, steps were discussed to restore and build up Russia-Korea trade and economic cooperation which was affected by the pandemic.

The Podyapolsky project involves the construction of infrastructure in the Shkotovsky district in southern Primorsky Territory for the transshipment of fish products and mixed cargo with a total volume of up to 1.2 million tons per year, as well as the creation of refrigeration facilities for the simultaneous storage of 25,000 tons of fish products. The Korean engineering company ”Hyein E&C” has already completed the preliminary feasibility study for the project.

Earlier it was reported that the project provides for the creation of an open warehouse with an area of ​​20,000 m2 and a cold storage with a capacity of 25,000  tons of one-time storage. Currently, the “Vladivostok Sea Fishing Port” OJSC (a stevedoring company on the territory of the port of Vladivostok) process the main volumes of fish products in the Far East of Russia. They can unload up to 2,000 tons of fish cargo per day.


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.


“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.