New Major Port Planned in Leningrad Region

Courtesy of UST-LUGA Co.A view of the site at Ust-Luga in the Leningrad region, where an 800-hectare seaport and cargo terminal are to be constructed.
ST. PETERSBURG ? A Leningrad region company has launched a multimillion-dollar bid for a sizable share of the Baltic Sea cargo-handling business with the creation of a new, major seaport.

Development plans at Ust-Luga, located about 150 kilometers west of St. Petersburg on the southern coast of the Gulf of Finland, include the construction of a cargo transport terminal occupying more than 800 hectares.

The terminal is to include zones for the loading and unloading of coal, iron ore, oil, mineral fertilizers, cargo containers and lumber, as well as ferry services for cars, trucks and trains.

Valery Izrailit, chairman of the board of directors of the Ust-Luga Company, which is behind the plans for the port?s development, declined to reveal the total cost for the port project, but maritime information agency has estimated the cost at about $40 million.

?The terminal is in a very good location in a bay that is largely ice-free with an entrance channel that will be deepened to 14 meters,? Izrailit said in a company press release. ?All of this makes operations here cheaper and will make the site a serious competitor for other ports in the region.?

The company anticipates that the completed port will be able to handle about 35 million tons of cargo a year.

The St. Petersburg and Primorsk ports are currently Russia?s busiest on the Baltic. The St. Petersburg port handled 32.5 million tons of cargo in 2000, trailing only the 34.7 million tons handled by the Latvian port of Ventspils and ahead of the 29.3 million tons that passed through the port in Tallinn, Estonia.

The figure for St. Petersburg represented a 15 percent jump over that for 1999. Transport industry officials say the new terminal is unlikely to have a negative effect on cargo volumes passing through the St. Petersburg facility.

?In this year alone, the volume of cargo passing through the St. Petersburg port has risen by 20 percent or 30 percent,? said Karl Gofman, general director of Delta Shipping. ?The port here doesn?t have the capacity to handle the present volume, so both sides will profit from this.?

The city?s drivers also have something to look forward to in relation to the new facility.

?Another good thing about the new port is that it will ease the strain on the city?s transport system,? Gofman added. ?The location of the St. Petersburg port means that cargo has to be transported through the city center. The new port is far from the city.?

The Ust-Luga Company owns the site, presently consisting of a beach, an incomplete railway line, a road and a port without cargo-handling facilities. The company?s major shareholders are the State Property Committee of the Leningrad region, the Joint Financial-Industrial Company, the Social-Economic Science and Business Cooperation Association, Absolut Bank, Denton Industry Inc. and October Railways.

The Ust-Luga Company said the water depth at the facility will allow ships weighing up to 75,000 tons to use the port 250 days a year without the assistance of icebreakers.

The first section of the complex, where coal will be loaded for export, is slated to be opened by the end of the year and, once completed in late 2004 or early 2005, is to have a loading capacity of 35 million tons per year.

The company has set up a new subsidiary, MASKOUL, to operate its fleet of service vessels, including two tugboats to be used in the coal-shipping operations scheduled to begin in December. MASKOUL is a joint venture with MASKO, which operates the service vessels at the port in Murmansk.

The construction plan for the transport terminal was created by the Lenmorniiproyekt Institute, Russia?s largest port-design firm. The economic side was developed in conjunction with the U.S.-based National Ports and Waterways Institute.

The Ust-Luga Company is planning to set up a subsidiary company by the end of this year to handle negotiations for the construction of the various port facilities.

The facilities for the loading of mineral fertilizers, coal, lumber and oil have already attracted investors including mineral-fertilizer producers Akron and Silvinit, the Baltic Wood-Processing Holding and the St. Petersburg Oil Terminal.

The company?s press secretary, Olga Berdikova, said the other sections of the project have attracted the attention of a number of companies including local ferry-boat transport company Sea Express and Maersk Sealand, a part of the Danish A. P. Moller Group, which specializes in transporting containers.