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Record number of cruise ship calls at St. Petersburg

During the 2017 navigation season St. Petersburg’s Sea Facade passenger port handled 247 cruise liners and two ferries

More than half a million cruise ship passengers disembarked at the terminal to visit the city. The number of calls to the port increased by 19% compared to the 2016 season.

A Sea Facade spokesman said these were the highest numbers in the history of the port. The trend is expected to continue in 2018, with ship calls estimated to rise by about 10%.


Cruise ships are always welcome customers for bunker companies, despite their strict fuel quality and timing requirements. The Baltic Fuel Company reported that the volume of fuel delivered to cruise ships during the summer navigation season of 2017 amounted to more than 42,000 tonnes. Cruise companies that renewed their contracts with BFC include Viking cruises, Norwegian Cruise Line and TUI cruises.


An upturn in Russia’s cruise ship-based tourist sector, including both sea and inland ports, is underway throughout the Russian Federation. This follows a lengthy period of decline. Significant growth in passenger traffic was reported by Khabarovsk Kray (Far East) and Volga-Baltic waterway.


The number of cruise voyages on Siberian rivers – the Irtysh, Ob, Yenisei and Lena – has also increased, though not so significantly.


These positive changes are caused by state support for both the construction of cruise ships and the organization of regular passenger transport on inter-municipal routes.


Non-discriminatory access to ports rules approved

The Government of the Russian Federation has approved a new regulation to ensure non-discriminatory access to port services: loading, unloading, storage, handling facilities and tug services. The regulation allows access to the available capacities of stevedores. However port investors, EAEU countries, large clients and shippers with take-or-pay contracts or long-term contracts will get priority.


Stevedores should keep a register of applications and provide equal conditions for customers. They should not refuse to conclude contracts if sufficient capacity is available.


Access to services must be provided within the ‘available capacity’, which will be calculated and published monthly. It is calculated based on the standard port capacity stated in the design documentation, but this value decreases if there are certain circumstances reducing the throughput of approaches to the port, such as weather conditions, etc.


This regulation is the result of long-term efforts by both the authorities and stevedores. Russian media reported that the document as a whole was “positively evaluated by the professional community”. Kommersant quotes Vladimir Fefelov, a member of the Transport Committee of Opora Russia, as saying that the new rules “are designed to regulate the use of port facilities governed by large monopoly players”.


Gazpmneft Ocean launches own lubes brandGazprom Neft subsidiary roGazpromneft Lubricants has started production of marine lubricants using its own trademark, Gazpromneft Ocean. Production is carried out at the Omsk and Moscow lubrication plants, a company statement says.


The product portfolio includes 15 marine oils for engines consuming different fuels and installed on all types of vessels, including icebreakers, tankers, bulk carriers and container ships, ferries and cruise ships.


The long-term strategy of Gazprom Neft’s lube oil business envisages further development of marine oils production and the creation of an effective international sales network. The geographical spread of production and storage is expected to be expanded in 2018 to establish uninterrupted deliveries of Gazpromneft Ocean oil products at the largest foreign ports.


Gazpromneft Lubricants specialises in the production and sale of oils and lubricants. It was established in November, 2007. Production is located at six sites in Russia, Italy and Serbia. Total annual production is over 500,000 tonnes. Major clients include Sovcomflot, Rosmorport, Rosnefteflot, Norilskiy Nickel and other Russian and foreign ship owners.



Integration into the global Chevron supply chain allows the company’s customers to take marine oil in more than 800 ports worldwide. Gazpromneft Lubricants occupies 15% of the Russian lubricant market. The company also works in the CIS and Baltic countries, Europe, Central and South-East Asia, Africa and South America.

The company is represented in 72 countries.


Ramp allows bunkering from road tankers in Vanino port
Russian Far-Eastern bunkering company Forum DV has a built

a dedicated ramp for bunkering ships from road tankers at Vanino port. The company says this offers a simple and cost-effective technical solution which allows quick and safe refuelling of both floating storage facilities and vessels of various types. The ramp runs over a sealed lagoon which could contain any spill.


Forum DV is based at Vladivostok. Currently it uses road tankers to deliver about 150,000 tonnes a year. The company’s area of operations covers almost the entire Far East and Transbaikalia, from Dudinka and Bilibino in the north to the Kuril Islands in the east and Buryatia in the south-west.


Port charges to be cut for LNG-fuelled vessels

The Ministry of Transport of Russia has started to work out measures aimed at stimulating the introduction of LNG as a marine fuel. One such measure under consideration is the reduction of port charges for LNG-fuelled vessels. The experience of European harbours will be taken into account when calculating the benefits. It is being assumed in the industry that the reduction will be 10% or more.


Portnews Information Agency quoted Viktor Olerskiy, the deputy Minister of Transport, as saying that fleet suppliers, such as tugs, bunkering tankers and possibly port icebreakers, should be considered as pilot projects for the transition to LNG.


Krylov State Science Centre to research LNG as a marine fuel
St. Petersburg’s Krylov State Science Centre has won a tender for conducting research within the framework of the Russian Ministry of Industry and Trade’s “Development of the gas fuelled fleet for navigation in coastal waters and inland waterways” programme. The work will include the design of prototype vessels, relevant equipment and technologies, manufacturing of experimental samples of equipment and their beta testing.


The program is financed by the federal budget and is intended to foster the development of a Russian commercial LNG-fuelled fleet built at domestic shipyards. The Ministry expects that by 2030 at least 38 such vessels will have started operations. It is intended that this fleet will include transport and passenger ships, bunkering tankers, floating bunkering bases, supplying and auxiliary vessels.


The ministry has also said that the first LNG bunkering terminals in the Russian Baltic will operate in late 2018 or early 2019. This refers to terminals in the ports of at Vysotsk and Kaliningrad. Gazprom’s Baltic LNG plant in Ust-Luga should be also in operation by 2022-2023. Alexei Miller, the head of the gas monopoly, publicly confirmed that this project is progressing according to schedule during a visit to the Leningrad region in late December 2017.


LUKOIL Marine Lubricants increases share of world market
Last year LUKOIL Marine Lubricants (LML), a 100% subsidiary of LUKOIL, increased its share of the global marine lubricants market by 2% to 12%. During the year, LML concluded a number of major international contracts, including an agreement to supply lubricants to half of Seaspan’s fleet, an agreement with Arab Shipping Company UASC, and a contract with Saudi Bahri Ship Management
(a marine oil supplier for 10 large-tonnage tankers).


Arab Maritime Petroleum Transport Company (AMPTC) also recently became another LUKOIL partner. According to the terms of the agreement, LUKOIL Marine Lubricants will supply its products for six AMPTC ice class product carriers. LML also signed contracts for global marine lubricant supplies to Lomar Shipping and Blystad Group (UK), and won a tender to supply lubricants for very large container carriers under construction for Mitsui OSK Lines.


LUKOIL is continuing to develop its ICOlube cylinder lubrication system. LUKOIL Marine Lubricants has already received 26 further orders from companies which had already been using ten ICOlube systems. Over the last two years, the customers who have bought these systems also transferred 386 vessels to using LUKOIL engine oil. In the autumn of 2017, LUKOIL Marie’s Cylinder Oil for ultra-low sulphur fuel was approved by MAN and Wärtsilä.



Bunker fleet modernization

Vitaly Kovalev, the President of the Russian Association of Marine and River suppliers, speaks about the initiative which would allow companies to get subsidies for the modernization of their fleet


It is well known that bunkering vessels in Russia, as a rule, are far from new. How do you assess the situation? Is the state of the bunker tanker fleet a real problem?


According to our information 217 bunkering vessels currently operate in Russia. Their average age is quite substantial, 32 years. However, in the last three to five years the trend has changed for the better, and the fleet is getting younger gradually. hus, Marine Engineering Bureau, a well-known engineering company, recently reported seventeen newly commissioned bunkering tankers. This is promising, but I have to say that none of these ships were built for a commercial company. Usually either the Ministry of Defence or a state port structure is the customer for bunker tanker newbuildings.


So, it must be admitted that the major part of the bunkering fleet is really not new. But I don’t see any real problem. In Russia the state of the ships, their environmental and technical safety is monitored by many supervisory authorities, first of all, by the Russian Maritime Register and the Russian River Register. Therefore, if a vessel works in a given operating area, there is a 100% guarantee that it is in good order and meets very stringent requirements.


Naturally, an old vessel, like an old car, requires more attention. It has to be repaired more often, and, of course, all shipowners would gladly replace all their old barges with new modern ones. But first of all shipowners take a lot of factors into account, primarily finance. How much money should be invested? What revenue will the investment bring in and when will the new barge pay for itself? I know our market very well and I can say that the existing bunker fleet generally satisfies both clients and owners and port authorities. Within the St. Petersburg port limits there is a vessel built in 1955. It copes perfectly well with the tasks required by its shipowner. This is a Dutch built tanker with a capacity of 550 tonnes, very economical, easy to operate. It has a crew of just three. The vessel is in excellent technical condition and can work for many more years.


Probably in each port there are such local legends, antique craft which are still used successfully today.


Still, it is impossible to argue with the fact that progress does not stand still and the modern equipment is more reliable and efficient.


Yes, I can’t argue with that. But it is necessary to understand that building a new ship in Russia is very expensive, more expensive than in many other countries. The payback period of such a project is at least 15 years. That means that only companies with a portfolio of long-term contracts and a reliable business plan for payback are able to afford this investment.

Probably, no one would be surprised if I say that this is an opportunity for large companies only. As for the independent market participants, they are not able to make predictions for the decade ahead and must work on the basis of today’s realities. Unfortunately, that’s the situation today. Moreover, if we analyse the data on the bunkering fleet, we will see that even vertically integrated companies do not see economic sense in the construction of new bunker vessels and acquire their fleet on the secondhand market.


In many countries, programmes have been designed to reduce the environmental burden that arises in the operation of ships. The natural way to achieve this goal is to replace the fleet. A common instrument is various forms of state subsidy.


How are things going in your market? Are bunker companies involved in such programmes?

Yes, state shipbuilding support programmes are in force and shipowners have successfully seized the opportunity. Currently there are two ways of direct subsidisation from the state budget: reimbursement of part of the cost of the construction of the fleet through credit and lease agreements; or a ship
recycling grant – a lump sum payment to the shipping company for disposing of old vessels.


It amounts to approximately 10% of the cost of a new vessel. But, I repeat, it only refers to the construction of new ships at the Russian shipyards. In the current economic situation this is not a feasible option for bunker companies.


That is why our Association has taken the initiative to expand the range of existing state programs and extend them to include modernising the existing, ageing fleet. This would allow independent small and average size companies to take part in the modernisation process. Objectively, modernisation requires less investment than building of a new ship. Bunkering companies are able to find relevant funds. As an owner of a barging company I know it for sure. Moreover, this will bring orders to small ship enterprises, which are hunting for customers now.

How do you intend to act?

The task is really not simple. The procedure of making amendments to the government’s decisions is complex and long, and the lobbying possibilities for the average business are much lower than those of the large. We have started the search for allies. And after a number of meetings we realized that, unfortunately, the strongest enterprises and public associations of the Russian shipping industry are not interested in cooperation with us as we had hoped. All of them, the United Shipbuilding Corporation, the Association of Shipping Companies, the Russian Chamber of Shipping and others, are oriented by the state to radically replace the obsolete fleet for international shipping.


We must unite with businesses working for small technical vessels used in the interior waters. These are, first of all, ship repairing enterprises with which we have yet to find a common language.

Vitaly Kovalev, the President of the Russian Association of Marine and River suppliers
Vitaly Kovalev, the President of the Russian Association of Marine and River suppliers

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