Grain by grain from Russian ports

Grain exports from Russia are record high while dedicated port facilities, fleet and infrastructure are not sufficient for this amount of grain. United Grain Company, Russia’s largest grain infrastructure and trading company, is looking into large scale investments into construction of new terminals and vessels for grain exports. However, the effect is to be seen not earlier than in 5 years.

On all fronts

In the agricultural period of 2016-2017, grain exports from Russia reached a record high result of 35.5 million tonnes, says the Ministry of Agriculture. In 2017-2018, it is expected to be as high as 45 million tonnes. However, construction of dedicated deepwater terminals is much-needed for grain exports.

The bulk of grain is exported via the ports of the Southern Basin. United Grain Company is operating via the terminal NKHP in Novorossiysk. Implementation of the investment programme for the terminal development is underway. As Nikolay Arkhipov, Executive Director for Transport Logistics and Investments of UGC, said 1at the 2-nd International Conference ShippingRu 2018  (28 February, Moscow), the terminal’s throughput in 2018 is forecasted to grow by 16%, year-on-year, to 7.1 million tonnes. In the future, with the development of railway infrastructure, it is expected to grow to 12 million tonnes per year.

When speaking at the conference, Alexander Goloviznin, Director Analytics and Logistics, Morstroytechnology, said that construction of new dedicated grain terminals in Novorossiysk and small estuary harbors of the Azov-Black Sea Basin is hindered by limited infrastructure. 

The only drastic solution in the Southern Basin is the project on construction of a dry cargo area at the port of Taman but that will require certain time.

The problems in the Baltic Basin are also associated with limited infrastructure. Meanwhile, experts say that grain market situation (compared with the previous years) makes this region interesting for construction of grain export facilities.

Some minor volumes of grain are handled by Big Port St. Petersburg while the Factor terminal is able to handle some 250,000-300,000 tonnes of grain per year if dredging works are performed there. Ust-Luga, which was traditionally considered as a potential place for a grain terminal has no space enough. Close location of hazardous cargo facilities and the necessity to comply with buffer zone requirements makes it difficult to build an adequate grain terminal here.

It is also hardly possible in the historical area of Big Port St. Petersburg. However, there is a possibility to build it in the outer port Bronka, far from the city center but close to the Ring Road, which is an advantageous position in terms of logistics. 

One more alternative is a port of Primorsk though it can face challenges of railway approaches. 

According to Nikolay Arkhipov, United Grain Company is in negotiations on building a grain terminal in Bronka or Primorsk. The project parameters have not been specified yet.

Alexander Goloviznin says designing, obtaining of approvals and construction of a dedicated terminal will take about 5 years.

The Far East is also in deficit of grain facilities. Grain production by Russian companies is growing there while transshipment of grain via Russian ports is among the interests of neighboring Chinese provinces. Nikolay Arkhipov says UGC has already signed agreements with Russian and Chinese companies on transshipment of grain via port Zarubino. There is a plan to build a dedicated terminal at the port with construction works to begin in 2019.

As for inland water ways, the development of grain transportation is associated with supplies to Iran and Turkey. UGC is going to order a series of 10 to 20 dry cargo carriers of Marine Engineering Bureau’s projects, RSD 62 and RSD 79. There is also a plan to build small elevators along the Volga river and a grain terminal at the river port of Saratov with annual throughput of about 4.5 million tonnes.

In the opinion of Gennady Yegorov, Director General of Marine Engineering Bureau, boosting of Russia’s grain exports can be among the key drivers of river fleet development. According to the expert, the demand for sea/river dry cargo carries will be as high as 100-140 units by 2022.

Vitaly Chernov