• 2022 April 5

    From Whom: Vitaliy Chernov


    About: Revival of Caspian logistics

    Revival of Caspian logistics

    - In 2021, cargo throughput of seaports in the Caspian Basin fell by 14%, year-on-year, to 6.97 million tonnes, mainly due to the fall of grain and oil exports. Meanwhile exports of vegetable oil to Iran increased.

    In our opinion, the Caspian region will play a higher role in Russia’s foreign trade since a revival of trade with Iran is expected as well as the increase of grain, vegetable oil and crude oil transit via Iran in the mid-term amid the current situation. Consequently, related port infrastructure in Russia will need expansion and modernization.

    In 2022, it is planned to commence designing works under the project on reconstruction of Oil Pier No1 and access canals in Makhachkala. The project implementation will let accept tankers of 13,000 tonnes in capacity thus raising annual capacity of the facility to 4 million tonnes.

    There is also a plan on reconstruction of Volga-Caspian Canal the completion of which had earlier been scheduled for 2028. The year of 2022 is to see front end engineering design with the designing planned for 2023-2024 and construction works – for 2024-2028.

    Another project foresees arranging of year-round navigation on the Astrakhan – Rostov-on-Don route. At first, the navigation season will be extended to nine months and then to eleven months. For that purpose, reconstruction of 19 hydraulic engineering facilities is needed, reconstruction of dams on the Nikolayevsky and Kochetkovsky hydrosystems. In the result, throughput of this sector is to grow by 4 million tonnes per year, the number of passages – by 100 per year. Investments into the project are estimated at RUB 89.8 billion. This project is especially important now amid the closed Sea of Azov and mine threat in the Black Sea. Of course, the situation will hopefully change by the moment of the project completion but it is always good to have alternatives to the Black Sea logistics.

    Quite possibly, implementation of all the above mentioned projects will have to be facilitated and financing of less promising projects will be probably redirected in view of the new geopolitical situation.