River losing oil cargo

River navigation is to terminate at Volga-Baltic way in a week. According to preliminary estimates, transportation of oil products by river to the port of Saint Petersburg totaled 2.550 million tons this season. It is considerably less than average seasonal level of oil products transportation by Volga-Baltic way, which was about 4.5 million tons through recent years.

Volumes down

Operation of river locks at Volga-Baltic way may be stopped as early as on November 15. It the date preliminary specified by Volga-Baltic SBA. Thus, large-tonnage vessels will not be able to pass by river to the port of Saint Petersburg and back, while auxiliary fleet is to continue operation till the end of autumn. According to Yury Petrov, Director of Mostotrest SUE, the bridges will not be drawn up from December 1.

Export transportation by has considerably decreased this year. As PortNews IAA reported earlier, it can be attributed to low governmental financing of the works aimed at maintenance of technical state of the way and to late start of navigation owing to bad weather conditions, as well as to a week-long termination of Neva navigation during G8 Summit in Saint Petersburg.

Total volume of cargo (oil products, timber, metal construction materials) transported in navigation period has not been calculated yet. According to forecast made by Vladimir Nickolayev, head of Volga-Baltic SBA, a month ago, total transportation of 2006 is to decrease to 15-16 million tons against 18.3 million tons transported in navigation 2005. Decrease of cargo turnover is mainly attributed to the decrease in oil products transportation.

Less shippers

River transportation of heavy fuel oil has always been carried out from the refineries located along Upper and Middle Volga as well as from the plants located at the Kama-river and from Bashkiria. This year shipment of heavy fuel oil by river-going vessels was carried out by Nizhnij Novgorod refinery (over 600 thou tons) as well as by Nizhnekamsk, Samara, Syzran and Perm refineries.

This year, river navigation was marked by the absence of the largest tanker carrier – Volgotanker OJSC. Claims from tax authorities resulted in arrest of the company’s complete fleet – over 250 oil carriers. Thus, river transportation of oil products from Ufa-group refineries was impossible in 2006. Cargo from Ufa to Volga may only be transported by shallow-water river Belaya emptying into the Kama-river and then to Volga. Only Volgotanker has special vessels in its fleet.

Transportation of heavy fuel oil by river tankers from Nizhnij Novgorod and Perm refineries of LUKOIL company was carried out by Volga Fleet Tanker shipping company (affiliate of Volga Shiping Company). According to analytical department of PortNews IAA, total river transportation of LUKOIL’s dark fuel will amount this year to over 1 million tons against 1.5 million tons in navigation 2005. The customers in the port of Saint Petersburg were Petersburg Oil Terminal CJSC (about 500 thou tons through navigation period) and Vysotsk terminal of LUKOIL in Leningrad Region (530 thou tons through navigation period).

Rosneft’s refineries (Samara group) and Nizhnekamsk refinery of TAIF Group shipped heavy fuel oil by the tankers of Vision Fleet shipping company and by the vessels of minor companies  - members of Tanker Union. In this case export transshipment in the port of Saint Petersburg was carried out not via coastal transshipment complexes but at the roads of Saint Petersburg port, off Kronshtadt. Total river transshipment of these refineries will amount to 1.520 thou tons in this season.

20%-bonus

River transportation of heavy fuel oil from these refineries within summer navigation enable cargo owners to increase seasonal shipment. According to data of InfoTEC-Consult (information-research agency), average annual production of heavy fuel oil by the above refineries is about 23.5 million tons. Thus, it is possible to calculate that almost 20% of oil products fall on river transportation.

When transporting oil products by river cargo owners may apply more flexible layouts of export: they are not limited to fixed capacities of the ports in terms of oil products transshipment but may use off-harbor transshipment complexes.

It is well known that off-harbor transshipment in an advantage of rather shallow port of Saint Petersburg since large-capacity 100,000-dwt tankers may come to the storage tanker. Thus, oil products go directly to the port of buyer. At the same time 35,000-dwt tankers may be loaded at coastal terminals of Saint Petersburg port. Such tankers are used at a very short transportation way – mostly to the port of Rotterdam, where larger lots of products are formed.

Time is money

Major problem of river transportation is loss of time. Today, the most complicated and time-consuming part of the way leading to the port of Saint Petersburg is shallowing part of Volga at the town of Gorodets (Nizhnij Novgorod region, Grorky water reservoir). It takes 5 days to pass the 55-km long sector Gorodets lock – Nizhnij Novgorod. This period grew 24-fold for the last 10 years раза. The necessity to wait for “high water” results also in partial unloading of the vessels and in passing the sector with participation of barges.

Another place where vessels lose much time is Nizhnesvir lock – up to 14 hours.

The last obstacle at the way to the Seaport of Saint Petersburg is draw-bridges at the Neva-river. This year the vessels had to wait up to 3 days there.

Besides, there is a number of minor problems at Volga-Baltic way:

- decrease of guaranteed depth (loss of each centimeter in draft results in loss of 20 tons of cargo)

- extension of one-way sectors,

- deterioration of equipment,

- permanent shortage of funds for current maintenance and repair.

Budget finances only 12% of needed dredging works. Total planned allocation for Volga-Baltic way is RUR 651 million in 2006. It is not enough, Vldimir Nickolayev says.

President Putin has paid attention this year to the state of navigable waterways of Russia. The head of the government was ordered to ensure timely financing of all measures necessary for adequate navigation. “It makes us hope, that stable technical state of river ways will return cargo to the river tankers”, Peter Razumov, Director of Vision Fleet told the reporter of PortNews IAA.