Belarus has cut a window, but not to Europe. Amid the European sanctions, the Republic of Belarus has begun to develop Russian ports, hoping to obtain Port Bronka, a multi-purpose terminal in Saint-Petersburg, as well as port facilities for handling its cargo in Russia’s north and south.
What does Belarus want?
Belarus is highly interested in the transport and logistics capabilities of Russia, both for the export of its products and for the trade with China, which is turning into one of the country’s main economic partners.
“In 2023, special attention should be paid to the development of transportation via seaports, to continue work on building efficient transport and logistics chains in the east,” said Belarus President Alexander Lukashenko at the Council of Ministers meeting held on 10 March 2023. - We need new routes to expand the trade, we need to further modernization of the transport infrastructure. - Together with the Russian colleagues, we need to intensify work on the rejection of the licensing system for all types of cargo transportation by roads and non-regular transportation of passengers. I instruct to ensure the access of domestic companies to the coastal transportation in Russia in 2023. Everything that was needed from my part has been done. It takes a few small steps for this problem to be solved.”
The head of the state emphasized that China remains the main strategic partner of Belarus among the distant foreign countries. “Today, China is a foothold in the entire vast Asian region for us,” Alexander Lukashenko said. - The readiness for cooperation among the Chinese is enormous. The recent visit to Beijing resulted in signing of almost 40 contracts worth $3.5 billion.”
Problems
Problems with logistics of cargo exports from Belarus began in 2020 with the aggravation of relations between Belarus and its neighboring European states. It was then, that the republic began to look for alternative ports in Russia for the export of its products.
The transportation of Belarusian oil products through Estonia has been blocked since February 2022. As a result, oil products began to be delivered through Great Port of Saint-Petersburg under an intergovernmental agreement with Russia (up to 10 million tonnes per year).
The situation with the handling of potash fertilizers is more complicated. Belarus used to supply about 11 million tonnes of fertilizers per year through the Baltics, while Russia itself is experiencing a shortage of specialized bulk facilities. In 2022, Russia exported about 1.5 million tonnes of fertilizers through the ports of the Baltic states. Although a year earlier this figure approached 8 million tonnes and decreased due to the construction of specialized terminals in the port of Ust-Luga, Russia still lack facilities for 11 million tonns of Belarusian potash.
Is Bronka a silver bullet?
As we expected, the Belarusian fertilizers were "scattered" among different terminals, including being handled in big-bags at Port Bronka terminal in St. Petersburg. Currently, a deal is being prepared to hand over this terminal to Belarusian partners. The asset is very attractive indeed: it is a modern multi-purpose terminal capable of handling both containerized, oversized and RO-RO cargo. Its favorable location provides a shorter approach route for ships as compared with other city terminals, and a direct access to the Ring Road (with its own exit) and the railway line. Besides,the terminal has tested innovative containers for bulk cargo with a bottom discharge system. They can be used for handling of mineral fertilizers.
However, the terminal is not a specialized facility for handling potash fertilizers. In our opinion, it would be more reasonable to use it in the future for handling of containerized cargo delivered by deep-sea routes from China in view of its actively developing cooperation with Belarus and plans to create a free trade and investment zone this year. The Great Stone Industrial Park operating in Belarus was created under an intergovernmental agreement with China in 2012 (construction began in 2014). It is considered to be an important element of the Chinese One Belt, One Road initiative.
This does not mean that part of the Belarusian cargo cannot go via the ports of the Far East, but it is hindered by the acute shortage of the Eastern Polygon carrying capacity.
Other opportunities
Port Bronka alone cannot solve the problem of handling 11 million tonnes of potash fertilizers. At present, this cargo is "scattered" among different ports of Russia. The Republic of Belarus earlier announced its plans to transport up to 850 thousand tonnes of cargo via the Astrakhan Region. According to available statistics, it was about 35,000 tonnes per month last year.
However, a specialized deep-sea terminal is needed as a comprehensive solution. Various alternatives are being considered: the construction of a terminal in Primorsk (Leningrad region) and in the Murmansk region.
As for Primorsk, the authorities of the Leningrad Region made a corresponding proposal to Belarus a year ago. We have no information about the progress of this project. It should be noted that environmental activists may oppose the construction of a terminal there taking into account an example of blocking another project in the Leningrad Region for environmental reasons. That was a project on construction of a grain terminal in the Batareinaya Bay.
As for the Murmansk Region, the working group of Belarus’ Ministry of Transport and Communications visited this region in February 2023. It discussed the possibilities for building a Belarusian port with the regional authorities. During the visit, Natalya Alexandrovich, Deputy Minister of Transport and Communications of the Republic of Belarus, emphasized that Belarus sees the need to create a basic maritime infrastructure in Murmansk for Belarusian cargo traffic. However, it is too early to talk about any specific parameters and location of a potential terminal. Most likely, we are talking about the construction of a terminal on the left shore of the Kola Bay the development of which is being conducted under the project on comprehensive development of the Murmansk transport hub (MTU).
In our opinion, the Belarusian side should think about joining the existing projects. For example, a multi-profile port complex "Primorsky UPK" is under construction in Primorsk. There is a plan to create a terminal for handling of mineral fertilizers of up to 7 million tonnes in capacity with a prospect of further expansion.
Nevertheless, Belarus can get its own terminal in Russia in several years. In the meantime, Russia will have to load fertilizers in big bags and distribute them in small batches among various Russian ports. The acquisition of Port Bronka will certainly strengthen the logistics capabilities of Belarus, especially in the segment of containers.
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