Ports to take the light side

The pattern of oil cargoes transshipped via Russian ports of the Baltic basin is changing substantially. The share of Ust-Luga is growing, Primorsk is focusing on diesel fuel with the general trend showing the increase of light oil products in total throughput.

Ust-Luga results

In the 9-month period of 2015, oil cargo transshipment via Russian ports of the Baltic Basin increased by 4% to 106.1 mln t. 

However, not all ports benefit from this growth. The increase was seen in Ust-Luga (+17%) and Primorsk (+5%) while transshipment via Petersburg Oil Terminal dropped by 34.3%, RPK-Vysotsk-Lukoil-II – by 4.2%), Kaliningrad – by 13%.

At the same time crude transshipment via Primorsk over the 8-month period fell by 2.1% to 29,130,900 t, via Ust-Luga – grew by 14.1% to 17.5 mln t. In absolute figures, Primorsk lost 628,000 t of crude flow and Ust-Luga gained almost 2.2 mln t. So, total growth of westward flow made some 1.6 mln t due to general growth of crude exports in Russia which should be attributed to the tax maneuver. Reduction of crude transshipment via Primorsk was not unexpected. The pipeline was repurposed to transship diesel fuel as Transneft had announced in advance >>>> 

As for oil products, positive dynamics in the 8-month period was also shown by Ust-Luga and Primorsk alone. Transshipment of oil products via Ust-Luga climbed by 19.3% to 20.1 mln t, via Primorsk – by 28.3% to 9.66 mln t. Other ports of the basin saw a reduction partly due to the fact that considerable amount of heavy fuel oil from the ports of the North-West region was taken over by Ust-Luga Oil and also due to the problems of river navigation which had a negative impact on oil product exports via Saint-Petersburg (for the first time over several years off-harbour transshipment of cargo was not carried out in Saint-Petersburg in navigation 2015). Kaliningrad sector has been traditionally challenged by tariff policy of Belorussian and Lithuanian railways. Meanwhile, transshipment via Vysotsk based terminal may surge next year with the completion of Primorsk-Vysotsk diesel fuel pipeline. 

Shifting of heavy fuel oil flows to Ust-Luga Oil can be explained with political support of this project amid the needs to pay back considerable investment into its creation (experts estimate it at some $1 bln).

Let there be light, let there be gas

When speaking about the trends we can forecast the share of light oil products to grow in total transshipment via the Baltic basin ports due to modernization of Russian refineries and tax maneuver.

There are two terminals specializing in transshipment of light oil products and gas via Ust-Luga. NOVATEK terminal for transshipment of gas condensate delivered from Purovsky plant (earlier gas condensate was transshipped via port Vitino. According to the company, the terminal handled 5.04 mln t of gas condensate in January-September 2015, up 56.4%, year-on-year. Preliminary third quarter 2015 petroleum product sales volumes aggregated approximately 1,612 thousand tons, including 978 thousand tons of naphtha, 243 thousand tons of jet fuel, and 391 thousand tons of fuel oil and gasoil. As the Ust-Luga Complex achieved full capacity utilization in March 2015, export sales of stable gas condensate were resumed. During the nine months 2015, 859 thousand tons of stable gas condensate were exported, including 607 thousand tons exported in the third quarter.

Another terminal handling light oil products – SIBUR Portenergo has been recently sold to Mubadala Development Company. As Director General of SIBUR Dmitry Konov told IAA port news, the guarantee of transshipment volumes for SIBUR is the obligatory condition of the transaction. The terminal was launched in June 2013. Its design capacity is 4 mln t per year including 1.5 mln t of LPG and 2.5 mln t of light oil products. Investments into the project totaled RUB 25 bln. 

In the nearest future the Baltic basin is to have new LNG terminals for bunkering, in particular. Such plans have been announced by Gazprom, Cryogas, LNG Gorskaya, Rosneft and Nordic Yards though not all of the projects are likely to be implemented.

Vitaly Chernov