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. Last Updated: 07/27/2016

Novorossiisk Port to Invest $100M to Ship More Oil

MTNew investment will help Novorossiisk remain Russia's No. 1 crude oil port.
LONDON -- Novorossiisk Trade Sea Port plans to spend $100 million so it can ship more oil and oil products and maintain its rank as the country's largest crude oil port.

The Black Sea port plans to expand its crude oil pier to increase loading to 65 million tons next year, Sergei Povolokin, a spokesman at Novorossiisk, said Monday. It loaded 54.5 million tons of crude and oil products last year.

Novorossiisk is competing for the rank of Russia's largest oil port with Primorsk on the Baltic Sea, which is being expanded by Transneft, the country's oil pipeline monopoly. The ports are expanding because they expect more exports as the price of oil rises.

"We expect higher profits on higher loading," Povolokin said. "We expect to stay the main port at least in Russia."

Novorossiisk handles about 30 percent of all Russian export-import cargoes. It exports about 30 percent of the nation's oil and imports 48 percent of its sugar, according to the company statement. It reported about 1.5 billion rubles ($52.2 million) of profit on 5.2 billion rubles of revenue last year.

The port will also modernize its fuel terminals so they can load more fuel oil and other oil products, the company said. Those loadings should increase by 5 million tons per year. The project will be completed by 2007.

The new pier will mirror the existing Sheskharis terminal, the port's biggest. The project will require about 1.5 billion rubles of investment.

Novorossiisk shareholders last month fired the general director, Vladimir Kovbasyuk, and named Igor Vilin to run the port, Povolokin said.

The state holds a 20 percent stake in the port, units of UralSib Financial Corp., a Moscow-based banking group, hold 33.1 percent of the port and Investsberbank holds a 34.5 percent share, according to Novorossiisk.