Oil berth in Crimea under dispute

Oil terminal in Kerch is under judicial dispute between the ports of Crimea and fuel company TES while petrol is already in deficit on the Crimean peninsula.

TES oil terminal in Crimea previously controlled by ex-deputy Sergey Beim, former head of Chernomorgaz, is trying to obtain ownership of the berth infrastructure at Kerch Fishing Port (part of Crimean Sea Ports). The businessmen invested into the berth reconstruction back in Ukrainian period. The state company does not hand over the berth, neither does it want to use it. The terminal is rented by TES which had been actively using it for transshipment till recently. Yet, the terminal had to stop operation due to fines caused by the fact that hydraulic engineering structures do not belong to the terminal.

TES-Terminal, operator of a facility for transshipment of heavy fuel oil, liquefied gas and light oil products at Kerch Fishing Port, has submitted a claim to the Cabinet Council of Crimea to declare the ownership of oil products handling facilities currently under the economic jurisdiction of SUE Crimean Sea Ports.

As IAA PortNews learnt from a source at CSP who asked not to reveal the name, the key owner of TES, Sergey Baim had an agreement with Crimean Sea Ports on investments to be made by both parties into reconstruction of the Berth No 7 following which it will be handed over to TES together with infrastructure. Ownership, or at least long-term use was agreed upon.

“Finally, investments were made by Sergey Baim but not by CSP that makes him believe that the berth and its facilities belong to him. The berth is currently being used by his company. Some time ago we tried to return the berth to the company but changed our mind since rent is being paid by Sergey Baim. We cannot use this berth since its equipment is a part of the oil terminal. And we have no plans about it”, stated the source.

Mikhail Fal’ko, General Director of TES-Terminal partly confirms this information. “Ukraine was to either rent it out to us or settle accounts. We have totally spent $50 million. We performed complete reinforcement of a the quay wall, built an oil terminal, a ferry facility and a railway ramp. After the transition to Russia nobody covered our expenses, the port started inventing tariffs for the terminal use and berth dues”, he said.

According to him, to handle dangerous cargo stevedoring companies should own hydraulic engineering structure. However, a year ago CSP took inventory and recognized 200-meter pipeline crossing these facilities. 

“Since hydraulic engineering structures do not belong to us we cannot continue our activities being fined by Rostransnadzor. CSP’s acts have forced us terminate operation of the entire terminal completely. The authorities of the Republic do not understand how hydraulic engineering structure could be handed over to us since state property cannot be legally handed over to any company without a competition”, says Mikhail Fal’ko.

The Ministry of Transport of Crimea has forwarded the request of IAA PortNews to Crimean Sea Ports following which Sergey Kvasov, General Director of CSP refused to comment.

According to case files, the berth earlier had mazut-handling equipment operated by Crymteplokommunenergo (Ukrainian company) under a rent agreement.

By 2012, the TES-Terminal performed reconstruction of the berth under a bail made by Crimean Sea Fishing Port in 2010. The reconstruction divided the berth into three parts: a facility for transshipment of oil products, a ferry service for railway transport and a cargo berth with total length of the berth of 267 meters, according to CSP.

In December 2018, the Arbitrage Court of the Republic of Crimea rejected TES-Terminal’s claim to outlaw the decree of the Cabinet Council on property transfer to Crimean Sea Ports. The company’s complaint against that decision is currently under consideration at the court of appeal.

TES does not publish its transshipment results. In his interview with Interfax in December 2014, Sergey Beim said that Crimea consumes 50,000 – 60,000 tonnes of oil products per month and the terminal was set to reach this result. In 2017, consumption of petrol alone surged in the Republic of Crimea to 410,000 tonnes amid the increase of Russian tourists flow. In August 2017, there was even a deficit of petrol.
According to the website of TES-Terminal, it accepts railway ferries and transships liquefied gas, light and dark oil products. Each of several Google Earth pictures made between 2014 and February 2019 there are two or three large ships moored at the terminal and a number of smaller ones (pictures are available at CSP website). Half of the pictures show a ship with railcars with different pictures showing different location of railcars and different locating of vessels which confirms activities of TES-Terminal at the berth and railway facilities.

According to accounting data available at Kartoteka.ru system, total revenues of TES-Terminal and TES-Terminal-1 companies in 2015–2017 was ranging between RUB 65 million and RUB 857 million per year. Total revenues of Firm ‘TES’ and Trading House ‘TES’ (key legal entities of TES Group) was ranging between RUB 10.2 billion and RUB 12.9 billion per year during the mentioned period.

Over the recent years, TES Terminal has been handling oil products under the agreements with Rosneft, Mobile GTES, wholesale oil product suppliers, Gazprom Neft and Bashneft.

The berth under the dispute has nothing to do with earlier announced plans of Crimean Sea Ports to launch transshipment of oil products in Kerch. According to CSP source, a different berth is intended for that purpose. However it requires reconstruction not supported by any financing. “Due to unpreparedness of the berth we have been refused a license. We have not obtained it yet though we have frequently applied for it over the recent years”, says the source. 

“The port cannot possibly use the berth infrastructure since it is a part of our terminal’s closed cycle, — confirms Mikhail Fal’ko. — Besides, throughout the period we have been paying the port for its use the port has never cleared the approach canal. Instead of declared depth of 8 meters it is actually 5.1 m. Vessels with draft exceeding 4 meters are not allowed there.”

Aleksandr Alikin