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It was not until the 18th century that Russia gained access to the Baltic Sea and although the number of seaports in the Russian Federation has increased since that time, the Baltic ‘window’ still plays a leading role within the country in terms of cargo turnover.The seaports of the region can be divided into two groups: multi-

purpose facilities and highly specialized ones. The Big Port Saint Peters-burg, Vyborg and Kaliningrad are multipurpose ports, handling a wide range of freight categories. Primorsk specializes in oil and oil products, Vysotsk has two dedicated terminals: an oil-loading and a coal termi-nal, whereas Ust-Luga is launching a number of specialized facilities. In 2013, the Baltic ports’ share within the total Russian ports’ freight turno-ver was close to 37%; this figure can be further broken down to a 38% oil share in this score, 49% in oil products, 60% in containers, 24% in coal, 61% in refrigerated cargo and 38% in ro-ro and ferry-borne cargo. The total cargo volume handled by Russian ports along the Baltic coast reached 216.01 mln tn, out of which 78.8 mln tn constituted oil, 54.57 mln tn – oil products, 24.89 mln tn (or 2.89 mln TEU) – containerized cargo and 23.87 mln tn was the amount of total coal handlings.

Fig. 1. Cargo turnover dynamics in the Russian Baltic ports 2004-2013 [mln tn]

Russian ports along the Baltic coast after transition

Russia’s window onto Europeby Olga Gopkalo and Alexander Goloviznin, Mostroytechnology

The last decade’s affairs of Russian Baltic ports were dramatic, interesting and complex. How-ever, the ports can also prove their track records by success stories. The Big Port of Saint Pe-tersburg is currently the largest container port in the Baltic Sea, the First Container Terminal – a leader in container handlings in the region. The Port of Primorsk is a major oil port and Rosterminalugol has grown into the biggest coal terminal.

Foreign trade freight prevails in the Baltic seaports of Rus-sia, with 52.04 mln tn of dry cargo (delivered mainly by rail) and 132.7 mln of liquid cargo (in majority delivered by pipelines) exported this way. Imports included dry cargo turnover (25.33 mln tn), transported from ports mainly by road, in containers and a small volume of liquid cargo (wine in bulk imported via Vyborg). The short-sea shipping freight volume amounted to 3.08 mln tn, i.e. some 1.5% of the total cargo turnover.

Development after transitionOver the time-frame of 2004-2013, the freight turnover

nearly doubled in the Baltic ports of Russia, constituting an 85% growth. It is impossible to understand what stimulated this rapid growth without analysing the general context of the RF’s seaport development in the post-Soviet era.

After the dissolution of the USSR, a substantial part of port capacities previously used for handling exports were lo-cated within the territories of former Soviet republics – now independent states: Latvia, Lithuania, Estonia, and Ukraine. RF’s losses were most significant in the Baltic Sea region. Such traditional channels of Soviet/Russian exports as Ventspils, Klaipėda, Riga and Tallinn remained abroad. Therefore, a ma-jor part of Russian freights was shipped via ports of adjacent states. Over the post-Soviet period (1990-2014), the Russian economy’s growth was fuelled by raw materials (mainly – oil, oil products, coal and fertilizers) exported mainly via seaports. Imports saw an increase in containerized transport to the RF. The freight flow slowdown in the years 1991-1994 caused by the system crash, was followed by a rapid growth (hindered then by the 1998 crisis).

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Fig. 2. Cargo turnover dynamics in the Russian Baltic ports 2004-2013 – cargo categories [mln tn]

left with limited container handling capacities, thereby being forced to use transit ports of the Baltic States and Finland. In 2000, the container traffic in Russian ports constituted some 439 thou. TEU. Considering the circumstances, new container handling capacities were required. Developments were mainly owing to the Russian transport companies’ effort (National Container Company, Severstaltrans/N-Trans – ac-quired by Global Ports, Delo Group). Since 2005, a snowballing increase in the car sales volume has been observed in the country: 20-30% annu-ally. This rising demand has been met mainly by imports, the volume of which grew nearly 10 times over the analysed period, reaching its peak level in 2008, with nearly 1.9 mln cars imported to Russia.

All this resulted in a deficit of transport infrastructure for im-port traffic. The first batches of imported new cars arrived in Rus-sian Baltic ports in December 2006, initially to modernized berths and yards. Many car terminals emerged at the peak of demand (imports) and they were not constructed as dedicated, specialist facilities, but were arranged based on what was available.

The Big Port Saint PetersburgIn the period between 2004 and 2013 containerized cargo turn-

over multiplied nearly four times in Russian ports – from 1.3 tо 4.8 mln TEU. Baltic ports of the country are playing a leading role in this process – this is where more than half of the cargo volume is handled, mainly – in the Big Port of Saint Petersburg.

Fig. 3. Containerized cargo turnover dynamics at the Big Port Saint Petersburg 2004-2013 [thou. TEU]

Regardless of the high saturation of the Baltic container market and the growth of competition, investors’ interest in the port is not fading, as using Saint Petersburg is an optimum solution for many Russian exporters and importers. Therefore, cargo owners and transport companies in the RF have been and are still mostly interested in this port. Yet, its development is hindered by territo-rial limitations and the vicinity of urban areas.

As of November 25, 2005, the Big Port Saint Petersburg’s contain-er turnover hit and later exceeded the level of 1 mln TEU. In 2008, the turnover of the port’s largest container terminal – the First Container Terminal (FCT) – surpassed one million TEU as well. Currently, all major container terminals in Saint Petersburg are planning to increase their throughput capacities. Development plans for the nearest future provide for capacity expansion from 1,350 up to 1,600 thou. TEU at FCT, from 1,200 to 1,500 thou. TEU at Petrolesport, from 500 to 1,500 thou. TEU at Container Terminal Saint Petersburg and from 250 to 370 thou. TEU at Moby Dick. Besides investment plans for these ter-minals, one should also mention Bronka – a project currently devised to build a multi-purpose cargo handling facility, with a target through-put capacity of 260 thou. ro-ro units and up to 1,900 thou. TEU.

In recent years, the Big Port Saint Petersburg has not only be-come the centre of container business, but also the main entrance point for car imports. The history of its car terminals development began in 2006, when the Multi-purpose Cargo Handling Com-plex “Onega” received its first vehicles shipment. The system was

Over the years 1994-2003, the Russian ports’ throughput in-creased from 111.0 tо 288.3 mln tn (i.e. 2.6 times), to grow from 364.0 to 589.2 mln tn (by 62%) in the period 2004-2013. The change was mainly due to developing international carriage, primarily exports.

The rapid growth in international trade required adaptation of the seaports’ infrastructure so as to respond to the market needs. This was achieved in a number of ways. Firstly, by utilizing the existing, chiefly multi-purpose port capacities to the maximum, as well as upgrading or converting the facilities. Often, imperfect technologies were used, when considering the limited land area and depth in the existing ports, it was impossible to construct terminals meeting the current needs. This was a relatively low-cost solution, since the assets involved had already partly (or completely) depreciated. Besides, as a result of internal privatization during the years 1992-1994, many port assets were acquired at a low price and the management of privatized enterprises was taken over by people with no experience in port operations. Secondly, by re-profiling non-stevedoring assets (shipbuilding and ship repair yards, fishing ports). This was also a relatively low-cost solution, although an ineffi-cient one in terms of technologies applied. And thirdly, by constructing new ports and terminals, mainly for the purpose of exporting raw ma-terials and importing containerized consumer goods and ro-ro freight.

With limited public funding, the ‘rebirth’ of the port construc-tion industry was primarily financed by private investors or by state-owned corporations (JSC Transneft). The progress in development of sea ports is reflected in the “Maritime Transport” subprogramme implemented under the Federal Target Programme “Modernization of the Russian Transport System (2002-2010)” report. The propor-tion between the budget-financed and private investments was 1:7. Exports of energy resources has become the most important driving force of the port industry’s development. The Port of Primorsk, the coal terminals in Ust-Luga as well as Vysotsk and Kaliningrad – all these facilities were constructed to handle export of fossil fuels.

Nevertheless, since 2008 bulk cargo flows (oil, coal) have tended to transfer eastwards. In 2008-2012, the volume of oil deliveries to eastern regions grew by 23.4 mln tn, while freights going west, south-west and south shrank by 10.2 mln tn, 19.2 mln tn and 4.4 mln tn, respectively. Along with these changes in the geographic pattern of traffic, pipeline construction projects were launched: the first stage of the Eastern Siberia-Pacific Ocean oil pipeline in 2009 (including the oil port Kozmino) and the second stage in 2012 (incl. the port’s expansion). A similar situation was observed in the case of coal – all of the freight volume growth occurred in ports of the Far East.

The growth of income earned by Russia from exports over the last decade resulted in an increasing demand for imported goods transport-ed mainly in containers. After the dissolution of the USSR, Russia was

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complicated: cars were transferred from a pier to “Onega-Terminal” yard with customs assistance. In autumn 2007, Russian Transport Lines (a customs broker and a car dealer) began unloading cars at the Sea Fishing Port’s wharfs. Petrolesport commenced receiving cars concurrently with the first deliveries to Yug-2 Terminal in Ust-Luga, in 2008. Moreover, this very year a car terminal opened within the premises of Third Stevedoring Company (which was incorporat-ed into the Sea Port Saint Petersburg). The terminal is managed by

The way the currently largest container operator on the Rus-sian market was established is a complex, but interesting one. At the beginning of the 1990s Russia’s ports went public and enterprises were privatized. Based on the Port of Leningrad’s assets, the JSC Sea Port of Saint-Petersburg was estab-lished (replaced by the OJSC Sea Port of Saint Petersburg). By means of buying up shares from the company’s workers, a group of entrepreneurs took over control of the port, some of them known for their relations with criminal circles.

Vitaly Yuzhilin and his business partner, Andrey Kobzar (repre-sented by the British company FQ – First Quantum) were among those to acquire the port shares last. At the beginning of the 2000s, the Liechtenstein off-shore company Nasdor Anstalt took over control of the port. The company was considered associated with Vitaly Yuzhilin and his partners. In response to requirements of the time – growing exports of bulk cargoes – specialized terminals were constructed and expanded in the port. As a result of the staged modernization, the oil terminal (currently – Petersburg Oil Termi-nal, a closed joint stock company) increased its 1995 throughput capacity from 1 mln tn up to 12.5 mln tn in 2013.

In 1998 modernization of a container terminal in the 3rd cargo district of the Port of Saint Petersburg began, with the First Container Company being set up for this purpose. In 2002, the process of redesigning the facilities at Petrolesport was initiated towards handling containers. Moreover, that year also OJSC Baltic Bulk Terminal, specializing in handling mineral fertilizers, was put into operation (its current annual throughput capacity: 5-7 mln tn). The project was initiated by OJSC Uralkali, a company producing and exporting potash fertilizers, and by structural units of the OJSC Sea Port of Saint-Petersburg, on a parity basis.

At the same time, a formation of the container market’s key play-ers began. This complex process involved development of the major Russian transport groups concentrating on container transportation and on the management of container terminals, with such ele-ments as the formation of alliances, division of throughput capaci-ties and subsequent consolidation. The other side of this process included distribution of the market of all port assets, where assets remaining outside the container market profile were transferred to other stakeholders – exporters and cargo owners.

In 2002 Severstaltrans (a transport group at that time affiliated with OJSC Severstal, a steel plant) established National Container Company (NCC), a limited liabil-ity company), on a parity basis with FQ, controlled most probably by Vitaly Yuzhilin. NCC was established with the purpose of managing all assets of the founders associated with container transport, with the CJSC First Container Terminal (FCT) as the principal element. Furthermore, NCC acquired 74% of the container complex in the Port of Ust-Luga from OJSC Ust-Luga. However, this relationship did not last long. Four years later, in 2006, Severstaltrans left National Container Company. The company sold its shares in NCC and in a number of other assets owned joint-ly by Yuzhilin in the North-West and South of Russia, keep-ing only the Far-East container business for themselves.

In 2004, Vitaly Yuzhilin focussed on his container business and withdrew from a number of port assets, keeping a 50% interest in FCT. Nasdor Anstalt sold its 50% in the stevedoring company Neva-Metal to its partner in NCC, Severstaltrans. As a consequence, Neva-Metal was included in the Russian Steel division of Severstal. Neva-Metal has been handling metal products ever since, including containerized freights. For this purpose, the new owner fitted the terminal with adequate equipment. Nasdor Anstalt‘s 50% interest in the Baltic Bulk Terminal was sold to Uralkali – the cargo owner and second partner in the project. The arrangement was announced in 2007 by Uralkali, which acquired a complete block of terminal shares.

In 2004 Nasdor Anstalt sold its controlling interest in the Sea Port of Saint Petersburg to the Danish company Jysk Stålindus-tri, representing Novolipetsk Steel Company (NLMK Group). Within the process of restructuring NLMK’s assets, shares in the Sea Port of Saint Petersburg, together with the interest in three stevedoring companies: First Stevedoring Company, Second Stevedoring Company and Third Stevedoring Company were acquired by an international transport group, Universal Cargo Logistics Holding B.V. (UCLH). The latter is an international trans-port group, which incorporates a number of stevedoring, shipping, shipbuilding and logistic assets and is controlled by Vladimir Lisin. Novolipetsk Steel Company is Lisin’s major asset.

Following Severstaltrans’ exit from NCC, Sergey Gener-alov’s Industrial Investors Group owning the Far Eastern Shipping Company (FESCO) became First Quantum’s new partner. FESCO’s interest in port assets complied with the company’s strategy of developing a comprehensive offer of logistic services. For this purpose, the existing railway and shipping assets had to be supplemented with terminals. Nev-ertheless, this partnership did not last long either.

Besides the differing approaches to business, the Ust-Luga Container Terminal project became the main apple of discord between the partners. The supporters of Yuzhilin intended to invest in the terminal construction actively, while FESCO considered the project to be premature and inadequate to the situation on the mar-ket at the time of recession. In the summer of 2009, FQ extended a public proposal to FESCO to leave the construction project of the Ust-Luga Container Terminal in Leningrad oblast in response to FESCO’s refusal to finance the project. In 2010, FESCO sold its shares in NCC Group’s joint ventures to a company owned by Andrey Kobzar. First Quantum’s structural units became the First Container Terminal’s principal shareholders. Concurrently, one other major player was emerging on the Russian container market.

Following disposal of its interest in the Petersburg Container Terminal, Severstaltrans acquired a controlling block of Pe-trolesport shares in 2007. At the time of this transaction, the share of containerized cargo in Petrolesport’s total turnover accounted for 50%. The new owners set a goal to turn Petrole-sport into a standard, specialized container terminal. In 2013, containers accounted for 78% of the terminal’s throughput.

More or less at the same time Severstaltrans acquired interest in the container terminal Moby Dick. The facility, a ferry and cargo terminal located on Kronstadt Island – a territory adjacent to the dam

BLG, owner and operator of BLG AutoTerminal Bremerhaven. At the beginning of 2009, the first stage of a ro-ro terminal construction was completed in the area of wharf nos. 36-37 (the premises of CJSC Perstiko, incorporated in the Sea Port Saint Petersburg). All kinds of rolling cargo can be handled at the terminal and sometimes cars are received here (SEAT, Fiat LCV and other brands).

The new terminals were very much used during the period of rapid growth of imports. As the rate of imports slows down and

The BPSP container affairswhich is part of the Saint Petersburg Flood Prevention Facility Com-plex – started operations in 2002. The terminal was developed and initially owned by Containerships Oy, a Finnish operator. In 2006, during construction of the Saint Petersburg Flood Prevention Com-plex, there was a conflict between the stevedoring company and the dam developer who insisted that the land leased by Moby Dick for terminal construction should be made available as a yard for storing dam construction materials. This conflict intensified in 2007, when the Flood Prevention Facility Complex’s management blocked the termi-nal access road. The land site was at risk of seizure. The management of the terminal resolved the situation by attempts of a corporate raid.

At the end of 2007, structural units of Severstaltrans acquired a 50% interest in Moby Dick, thereby becoming Container-ships’ partners. In next to no time the new shareholders man-aged to obtain from the Ministry of Transport a long-awaited permission to arrange a border crossing at the second stage of the terminal, at the same time solving the conflict around the land sites. Currently, Global Ports holds 75% of the terminal shares.

In 2008, structural units of Severstaltrans began operating under the N-Trans brand. Port assets were consolidated into Global Ports Investments. Currently, Global Ports incorpo-rates several Russian and Finnish port and land-based con-tainer terminals, as well as operating an oil terminal in Estonia. It is a leading operator of port-based container terminals on the Russian market. At the end of November 2012, 37.5% of Global Ports was acquired by APM Terminals B.V., the port branch of A.P. Møller-Maersk A/S. In December 2013, Global Ports/APMT absorbed National Container Company.

At the moment, Global Ports/APMT group controls all major container terminals at the Big Port Saint Petersburg: CJSC Container Terminal, OJSC Petrolesport, Moby Dick Ltd. (75% jointly with Containerships Oy). The figures from 2013 show that these terminals handled 80% of contain-ers at the Big Port Saint Petersburg. Furthermore, Global Ports/APMT owns 80% of Ust-Luga Container Terminal and a number of assets in the Black Sea and Far East ports.

The Container Terminal Saint Petersburg is the only one among the major container terminals of the Saint Petersburg port not owned by Global Ports/APMT. The facility was built in 2008-2011 and replaced general cargo and coal handling facilities within the 4th cargo district of the port and is a joint venture of the Sea Port Saint Petersburg (a part of UCLH) and a branch of Medi-terranean Shipping Company (MSC) – Terminal Investment Limited S.A. (TIL). The venture invests in container terminals and develops them. In fact, the terminal is controlled by MSC.

The Sea Fishing Port of Saint Petersburg is an independ-ent player operating on the container market. Historically, the company focused on handling perishable cargo, mostly fish. In 2007, the terminal began handling new vehicle imports. The next stage resulted from a decision to expand container operations. Container yard equipment has already been in-stalled and the terminal has been included in time tables of container lines. The freight turnover volume has not yet been significant, but it is expected to reach 128 thou. TEU. �

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A d v e r t i s e m e n t

state-of-the-art terminals are launched – such as the one in Ust-Lu-ga – the role of Saint Petersburg’s terminals may decrease.

Tab. 1. Major stevedoring companies at the BPSP

Company name Wharf numbers Cargo categories Freight turnover in 2013

CJSC First Container Terminal 82-87 containers, refrigerated containers

11.96 mln tn1,083.9 thou. TEU

CJSC Petersburg Oil Terminal 112А, B, W, ПНТ-1-4, anchoring piles

diesel oil, mazut 9.10 mln tn

OJSC Petrolesport 42-48 containers, ro-ro 7.82 mln tn711.4 thou. TEU

OJSC Sea Port Saint Petersburg

1-7, 15-26, 29-32, 35-41, 67, 68, 102, 103

colour metals, refrigerated cargo, general cargo, ro-ro, bulk cargo, cars, coal

7.73 mln tn

OJSC Baltic Bulk Terminal 106, 107 mineral fertilizers 4.72 mln tn

CJSC Container Terminal Saint Petersburg

101А, B, W containers 3.73 mln tn396.4 thou. TEU

CJSC Neva-Metal 71-74 iron, containers 2.93 mln tn

CJSC In-Transit anchorage 5А, external roadstead

oil products 1.58 mln tn

Moby Dick Ltd Litke base, L-1, 2 containerized cargo 1.34 mln tn219.3 thou. TEU

CJSC Infotech Baltika anchorage 5А, oil products 1.11 mln tn

St. Peter’s Terminal Ltd. 15k, 16k, 17k general cargo, refrigerated cargo

1.10 mln tn

Delta Service Ltd. 94 oil products 1.02 mln tn

Sea Fishing Port Ltd. Р3-6 general cargo, containers 0.98 mln tn Phot

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Corporate_DEME_adv_A5_liggend_2014.indd 1 28/02/14 17:22

In May 2012, a distant terminal located at Cape Putevoy was included in the Port of Vysotsk. The terminal is part of the Vyborg-skaya Cellulose industrial plant and is intended to handle general cargo (including pellets). Its annual capacity is up to 3 mln tn.

Vysotsk’s twin brother – the Port of Vyborg – was also owned by ROSA Holding at the beginning of the 2000s. The distance between the ports of Vyborg and Vysotsk is not greater than 30 km and for some time they even used to have a common port authority. Nevertheless, their history followed two different paths. Initially, ROSA Holding’s coal was handled at the Port of Vyborg, but as the port is located within the city centre, a decision was made to cease this type of operation. In 2007, ROSA Holding decided to focus on developing the Port of Vy-sotsk and sold its assets in the Port of Vyborg to Oslo Marine Group (OMG), owned by Vitaly Arkhangelsky – a multi-profile structure de-veloping business in a relatively wide range of directions, including: in-surance, leasing, real estate, port, transport and freight services.

As far as the port business was concerned, the founder of Oslo Marine Group had ambitions to develop the Port of Vyborg into a multi-purpose cargo handling complex with an annual throughput capacity of 3 mln tn (at the moment of sale, the annual turnover was close to 1.1 mln tn). To achieve this goal and to finance development of a shipping company and other projects, huge loans were contracted from a number of Russian banks. It became obvious after a couple of years that reality did not comply with the plans at all. Not only did the shallow Port of Vyborg turn out to be insufficiently competitive to perform such tasks, but additionally a conflict with the Federal State Unitary Enterprise Rosmorport arose over the legal validity of berth lease contracts; this led to withdrawal of some of the berths from opera-tion. In the meantime, loan debts grew. In 2009, Oslo Marine Group’s manager and owner, Vitaly Arkhangelsky, went on vacation and never

VysotskThe Port of Vysotsk is one example of a successful specialization

strategy. Historically, the port had only dry cargo handling facilities at its disposal. Having experienced the wave of ownership transfor-mation, the dry cargo terminal has been managed by Port Vysotsky Company since 2004. The terminal is owned by ROSA Holding, through off-shore companies. Initially, the company was established on the basis of Erunakovo Coal Company and port assets were needed for the purpose of exports. ROSA Holding exited the coal business in 2007, selling its coal assets to Sibuglemet, but kept control of the port.

The dry cargo section of the Port of Vysotsk continues coal han-dling operations. Under the federal target program, wharf nos. 1-4 were modernized and dredging works were carried out at the port basin and waterway. While in 2004 the port was capable of receiving ships up to 25 thou. dwt, today vessels up to 87 thou. dwt enter the ter-minal, with roadstead loading. The terminal’s coal turnover increased from 3.1 to 4.9 mln tn. Further expanding the coal throughput capac-ity up to 7 mln tn and more is impeded by the insufficient railway ac-cess infrastructure. Cargo is delivered to the port via the Vyborg rail-way line. After the high-speed train service Allegro has been launched, the freight traffic has to be transferred to an alternative route – namely to the still non-existent Losevo-Kamenogorsk line. Yet, the by-pass completion has already been postponed more than once.

In June 2004, the Port of Vysotsk gained an oil terminal. The first start-up facilities of the RPK Vysotsk–Lukoil-II oil terminal were commis-sioned to handle light and dark oil products, with an annual throughput capacity of 2.5 mln tn. The second stage of the complex commissioned in 2005 increased the terminal’s capacity to 10.7 mln tn and in 2008 – to 12.0 mln tn. Today, the annual throughput capacity of the terminal amounts to 13.5 mln tn. The terminal handles Lukoil’s export freight flows.

4/2014 | Baltic Transport Journal | 95

Providing global solutions for tomorrow’s needs

DEME has decades of experience in its core dredging and land reclamation activities and hydraulic engineering. In support of its dredging activities, the Group offers an impressive range of services in the environmental field such as brownfield remediation, complex marine construction such as foundation and installation of offshore wind farms and sea aggregate winning. Thanks to its multidisciplinary capabilities and its integrated corporate structure, DEME has become a global solutions provider developing a whole range of new activities in the field of energy, oil & gas and renewable energy.

DEME N.V.Haven 1025, Scheldedijk 30B-2070 Zwijndrecht, Belgium T +32 3 250 52 11F +32 3 250 56 50 info.deme@deme-group.comwww.deme-group.com

Creating land for the future

AMORAS project: construction and exploitation of a mechanical dewatering plant for dredged material in the Port of Antwerp.

Construction of the C-Power offshore wind park off the Belgian Coast.

Dredging of a turning basin and an access channel for a new coal export terminal in Santa Marta, Colombia.

Corporate_DEME_adv_A5_liggend_2014.indd 1 28/02/14 17:22

returned to Russia. Since that time, creditors have not ceased efforts to recover the outstanding debts from OMG’s structural units and to take over control of the remaining assets, including the OJSC Port of Vyborg. Lawsuits with banks and the unsolved conflict over the lease of berths are not conducive to port development, but still the flow of freight has somewhat increased, to reach a volume of 1.5 mln tn in 2013. The growth was owing to the transshipment of coal.

PrimorskA major oil port on the Baltic Sea and the second among all of the

Russian ports in terms of cargo turnover – Primorsk – is an indispensa-ble point of the Baltic pipeline system and the Kstovo-Yaroslavl-Kirishi-Primorsk pipeline for the transportation of low-sulphur diesel oil. The port started operations in 2001, when the first stage of the Specmorneft-port Primorsk was launched (12 mln tn of annual capacity). In 2004, the second stage opened (50 mln tn) and in 2006 – the third one (74 mln tn capacity). In the early 2000s – a period of insufficient state sup-port, port development was financed by Transneft, a company dealing with pipeline transportation of oil. In 2007, the latter firm merged with Transnefteproduct (engaged in pipeline transportation of oil products), triggering a process of assets integration in the Port of Primorsk and today both terminals are controlled by one operator.

The first phase of commissioning Primorsk terminal for light oil products handling took place in 2008. With an initial annual capacity of 8.4 mln tn, the terminal recorded a 1.5 mln tn turnover in the first year of operation and 9.3 mln tn in 2013. Owing to more efficient op-eration and integration of two terminals operated initially by different companies, it was possible to go over the designed throughput capac-ity limit in the category of oil and oil products.

With its convenient location and good depths, the Port of Pri-morsk attracts investors. The NCSP Group (Novorossiysk Commer-cial Sea Port) is most active in this respect, planning construction of an oil terminal with a railway transshipment facility here. However, with a single-track railway line leading to the port, transportation of any significant volume of cargo will not be possible, unless a major mod-ernization of the Vyborg-Primorsk-Ermilovo line occurs. Yet, Rus-sian Railways is still delaying the solution to the problem and seems to be more interested in developing access to the Port of Ust-Luga.

Ust-LugaThis seaport has been the most intense growth point in the Baltic

Sea area in recent times. Although its construction was initiated in 1993, new terminals have begun emerging one by one since 2011. The port’s turnover increased from 0.8 mln tn in 2004 to 62.9 mln tn in 2013. According to 2013 figures, Ust-Luga became the third-largest port in Russia and the second-largest in the Baltic Sea (after Primorsk).

Fig. 4. Cargo turnover at the Port of Ust-Luga 2004-2013 [mln tn]

OJSC Ust-Luga Company, established for the purpose of construct-ing the port as well as land development activities, was created in 1992. The Ust-Luga project, a private-public partnership venture, is a unique one even on a Russian scale. Almost all of the port’s facilities, except for

the water area and navigation systems, are privately held. The project has attracted strategic investors – national level cargo owners and com-panies representing the transport and logistics sector.

Tab. 2. Ust-Luga’s calendar of events

2003 The first terminal – Rosterminalugol, accommodating freight flows coming from the Kuzbassrazrezugol Coal Mining Company – was commissioned.

2004 A project to construct a car and railway ferry terminal was approved as part of the combined multi-purpose Ust-Luga-Baltiysk-German ports ferry complex. Two years later, the project was adjusted to allow for large tonnage vessels and consequently the designed annual throughput capacity of the ferry terminal was increased to 5.5 mln tn. The first stage of the assignment was completed that year. 2007 was the year of trial operations and in 2008 a regular Ust-Luga-Baltiysk (the sea Port of Kaliningrad) connection opened.

2006 Construction of the multi-purpose cargo terminal Yug-2 commenced. The facility was commissioned two years later. Yug-2, a modern car terminal, currently the heart of the port, is the only terminal operated by OJSC Ust-Luga Company. Unlike its competitors in the Big Port Saint Petersburg, the terminal was designed and constructed from scratch, with the specific purpose of handling car imports and it offers European service standards.

2008 The JSC Multipurpose Reloading Complex was launched (UCLH has been the holder of a 100% interest in the terminal since 2008), capable of handling a wide range of cargo categories, with coal being the core of the freight flows.

December 2011

The first stage of Ust-Luga Container Terminal was commissioned (a part of the National Container Company, which was incorporated into Global Ports in 2013). The project is expected to expand the Ust-Luga Container Terminal’s throughput capacity from 440 tо 2,600 thou. TEU.

2009 A decision to construct the second Baltic Pipeline System (BPS II) was adopted, giving a strong push stimulating the port’s growth. Construction of an oil terminal and its accompanying infrastructure began in the seaport. The port water area and Northern Channel were dredged to allow 160 thou. dwt oil carriers.

May 2012 The new Ust-Luga Bunker Complex was commissioned. The facility is an indispensable element of BPS II, operated by Neva Pipeline Company. Oil handling operations began in 2012. The annual throughput capacity of the first stage of BPS II amounts to 30 mln tn. During the next stage of the project, the capacity is expected to reach 50 mln tn of oil.

2011-2012

Liquid cargo handling wharfs operated by Ust-Luga Oil (formerly – Rosneftbunker) were commissioned one by one. Oil products’ handling began already in 2011, to reach a volume of 14.9 mln tn in 2013.

2012 The first stage of the Novaya Gavan terminal opened to handle ro-ro freight including new passenger vehicles.

June 2013

OJSC Novatek (a vertically-structured integrated company, an independent Russian producer of natural gas) launched its Gas Condensate Fractionation and Transshipment Complex. The first stage of the facility includes two stable gas condensate fractionation trains with a capacity of 3 mln tn per annum each and a terminal capable of loading tankers up to 120 thou. dwt. The Ust-Luga Complex processes stable gas condensate into petroleum products like light and heavy naphtha, jet fuel, heating oil and gasoil, and enables the shipping of petroleum products to international markets. In 2013, the company processed 1,873 thou. tn of stable gas condensate into 1,831 thou. tn of end products.

June 2013

Construction of the Sibur-Portenergo’s light oil products handling terminal, with a capacity of 1.5 mln tn of LPG and up to 2.5 mln tn of light oil products, commenced. The bulk of the cargo from a Russian gas processing and petrochemical group, Sibur, is exported through this terminal.

As for today, the handling facilities operating within the Port of Ust-Luga are located in the southern part of the port area. As far as the northern area is concerned, plans include construction of

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the Baltic Metallurgical Terminal (by United Metallurgical Com-pany) and a terminal for handling mineral fertilizers (by Euro-Chem). Furthermore, a grain terminal could possibly be built, as there is still enough land available. Further capacity expansion is also possible in the river area of the port.

As has already been mentioned, a comprehensive approach to land development is a characteristic feature of the Port of Ust-Luga project. The nearest land development plans provide for creating an industrial zone. Hence, the ICT Group is planning to build a carbamide factory in the Ust-Luga industrial zone. The plant’s capacity should be close to 350 thou. tn of ammonia and 1.2 mln tn of carbamide. The project also includes construction of a carbamide and possibly an ammonia handling terminal (OJSC Baltic Fertilizer Terminal). Moreover, con-struction of a city-cluster with residential developments for the port workers and other enterprises is underway. Further plans provide for the development of an agri-industrial cluster and a recreation zone.

KaliningradThe Kaliningrad Oblast is an enclave of the Russian Federation and

this fact determines the development of the Port of Kaliningrad very much. Therefore, the port focuses on regional sources of freight, thereby limiting its development opportunities.

In 2001, Lukoil commissioned its oil terminal at the Port of Kalinin-grad. Lukoil carries out oil and gas exploration and production work in the Kaliningrad region and on the Baltic Sea Shelf; therefore, the termi-nal handles the mother company’s freight flows. In April 2007, the first handlings were received by the sea terminal operated by Sodrugestvo-Soy. Currently, a project is underway to expand the terminal’s annual throughput capacity, up to 5.5 mln tn. The terminal is part of the Sod-rugestvo industrial group – it was built together with two oil extraction

plants, with a third plant construction underway. Even now, Sodrug-estvo is one of Europe’s leading manufacturers of soya products.

In August 2002, construction of a car and railway ferry com-plex began in Baltiysk. The first stage (the car section) was launched in December 2002, the second one (railway) – in September 2006. The facility is part of the Ust-Luga-Baltiysk-German ports line and connects the Russian exclave to the mainland.

There is one more factor stimulating Kaliningrad’s growth, name-ly the development of an automotive cluster in the region, leading to an increase in demand for container transportation and construction of container terminals. The dynamics of container freight flows re-flect the growth of the automotive market and follows its decline. In 2006, in response to growing demand, Baltic Stevedoring Company, a ferry terminal operator, began developing a cargo handling section of the car terminal. In 2013, 166.7 thou. TEU was handled at the termi-nal. Plans provide for capacity expansion from 200 tо 468 thou. TEU. Moreover, CJSC Avtotor (an automotive factory in Kaliningrad) is planning to build an 880 thou. TEU terminal in the port, in order to secure the needs of the automotive cluster, which is being developed in the special economic zone of the Kaliningrad Oblast.

Not long ago, the Ministry of Transport of the Russian Federation was associating the plans for development of the Port of Kaliningrad with construction of a deep water hub, but in 2014, when the Sabetta project – a key component in the huge Yamal LNG project – turned out to be over-budget, the decision was made to withdraw financing from a number of other port projects and to re-allocate the funds to Sabetta. The Kaliningrad hub was among the projects affected by this process.

Summing up the Russian port tales, it’s needless to emphasize how rich the last decade has been in various sectorial affairs. And, it looks like the future of Russian ports will be no less interesting. �

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