Bunker looking in the future
Russian market of bunkering services does not stand still: its structure is changing both in terms of bunker volumes sold in different basins and in terms of fuel types. The short term agenda is the following: upgrading of the bunkering fleet and creation of infrastructure for LNG bunkering.
According to data provided by the Analytical Department of IAA PortNews at the XI Russian Forum “Current State and Prospects for Development of Russian Bunker Services Market”, the growth of Russia’s bunkering market in 2017 was driven mainly by the Far East Basin where bunker sales increased by 27%, year-on-year, to 4.6 million tonnes. In the Azov-Black Sea Basin bunker sales climbed by 9% to 2.4 million tonnes while the North-West Region saw a decline of 2.5% to 3.8 million tonnes.
The surge of bunkering in the Far East region is explained by the interest of the government and investors to the area and shifting of foreign trade emphasis towards Asia.
In the Asian market Russia’s competitor is Singapore which places its stake on innovations, streamlining of bureaucratic procedures and market transparency. When speaking at the Forum, Mikhail Panchenko, Bunker & Lubricant Trader, KPI Bridge Oil (Singapore), told the participants about the bunkering business in the city-state. According to him, 12 LNG bunker supply ships are to be put into operation in Singapore by 2025. The construction will be funded through repayable state co-financing. Shell is supposed to be an exclusive supplier of LNG bunker in Singapore. As of today, an LNG-powered tugboat operates at the port of Singapore. There is also a multiuser LNG storage terminal.
Russia’s Baltic basin, in its turn, needs the development of bunkering with alternative types of fuel, first of all, with low-sulphur fuel oil and liquefied natural gas (LNG). That is because the Baltic Sea is one of the sulphur emission control areas.
In the nearest future, this region is to see the construction of several LNG terminals (Baltic LNG, Vysotsk LNG, CS Portovaya, LNG-Gorskaya) as well as appearance of Russia’s first LNG bunkering tankers.
Four dedicated LNG bunkering tankers operate in the world today. Norway is a pioneer in this area. Rolf Fiskerstrand, CEO of Fiskerstrand, which built the first ship of this type said at the Forum that the corporation is going to set up a joint venture in Russia. The Norwegian company is currently looking for a partner in Russia.
Meanwhile, the first bunker vessel in Russia supplying liquefied natural gas (LNG) is expected to be built by the end of 2019, said Anton Lutskevich, representative of Krylov State Research Centre (KSRC), the ship designer. According to him, the ship is under construction at Onezhsky Shipyard under the project of the Ministry of Industry and Trade. The bunker vessel will be equipped with LNG storage tanks (LNG containers) of capacity of 160 cbm.
In addition, the Krylov Center developed design concept of a combo ship for gas fuel supply to shipping lines vessels, which can be operated both as a small LNG carrier and a floating power unit.
Roman Bogdanov, representative of Damen shipyards in Russia, said at the Forum that Russia needs renovation of its bunker supply fleet. According to him, small bunkering tankers of 700-800 DWT and bunker barges are in the highest demand. Such vessels are in the range of products offered by Damen. The demand for LNG bunker supply ships is expected to grow in coming years. Damen also has such ships with the capacity of 3,000 cbm, 6,000 cbm and 7,500 cbm. Besides, there is a project of a floating LNG storage facility with the capacity of 13,000 cbm.
When answering a question of IAA PortNews, USC President Aleksey Rakhmanov said that the United Shipbuilding Corporation is ready to build bunkering tankers including LNG tankers.
However, the surge of fuel prices in Russia has resulted in decreased profitability of shipping companies. When speaking at the extended meeting of the Board and Public Council of the Federal Marine and River Transport Agency (Rosmorrechflot) held in Moscow on 9 June 2018, Aleksey Klyavin, President of Russian Chamber of Shipping, told about a critical situation in the segment of water transport caused by the surge of fuel prices: apart from high prices there is a deficit of fuel in the market. Yevgeny Ditrikh, RF Transport Minister, promised, in his turn, to bring this issue up at the Government of Russia so that state support would be provided thereof.