With the advent in the 1940s of the Vanino seaport and Komsomolsk-on-Amur – Sovetskaya Gavan railway line, Russia got its second strategic outlet to the Pacific Ocean.

Today, many manufacturers of the Far East and Siberia depend on the activity of Vanino transport hub. Its favorable geographical location and the availability of undeveloped shoreline determine the future prospects of the port zone as a fast-growing center.

shutterstock

For the enterprises of Khabarovsk Territory, Vanino transportation hub serves as entrance to broader markets. For instance, the terminal of JSC Daltransugol is used to export products of Urgalugol. At the end of 2015, the coal enterprise introduced in Chegdomyn a new coal processing plant with a capacity of 6 million tons of processed coal a year. New technologies made it possible to improve quality indicators of finished products – to reduce the ash content of coal and to increase its caloric content, said Alexander Dobrovolsky, Director General of OJSC Urgalugol. The enterprise plans to increase the volume of output by approximately 1 million tons per year.

For that purpose, there has been undertaken the reconstruction of the Severnaya mine and the Bureinsky open-cut mine; the construction of the Pravoberezhny open-cut mine is continuing, too. Thus, by 2021 the company plans to increase coal mining and production from 5 million to 12 million tons. “The increase in production volumes is necessary for selling prepared coal abroad. Russian domestic market is limited. As for supplies to the world market, there are endless possibilities, and first of all we are talking about exporting to Asia-Pacific countries,” Alexander Dobrovolsky pointed out.

Solid fuel is also shipped through Vanino from other regions of the Far East and Siberia, including from the production facilities of Mechel in Yakutia. “The world price of coal in 2015 dropped to new lows, and experts almost unanimously predicted that 2016 would be no less severe for the industry. When the third quarter was over, few remembered of such forecasts, as the spot price of premium coking coal had almost doubled by the end of the year. As a result, coal, quite on the contrary, was given the status of the most efficient commodity of the year,” said Oleg Korov, Director General of PJSC Mechel.

Vanino as an export channel is no less important today for timber exporters. This year, the commercial sea port is going to transship about 1 million tons of timber – it is almost two times more than in 2016. Such timber producers as LLC LAN, LLC Nanai Timber Trade, JSC Smena Trading, enterprises of Business Marketing holding company are planning to increase the transshipment of their timber cargo (round wood, as well as sawn lumber, fuel pellets, and chipboard) through the commercial port. In addition, there are new cargo owners, who declared additional volumes of timber products for transshipment, in particular, LLC Rimbunan Hidzhau, whose main assets are concentrated in Khabarovsk Territory.

“Over the past ten years, the volume of transportation of timber cargo through the port of Vanino declined. This trend has strengthened since 2008, after an increase in customs duties on round wood exports. In the past three years, the port has been making active efforts to restore the cargo base at the expense of timber cargo, but a weak pricing environment has kept it from achieving the desired results. Last year, the situation stabilized in the international markets: decline in prices virtually stopped, then a slight increase was recorded, which allowed us to increase the volume of timber transportation,” said Valery Balakin, Director General of OJSC Port Vanino.

It is from Vanino port that the products of the steel plant in the Far East, Amurmetal, are shipped. Although the volume of ferrous metals shipments have been subject to significant fluctuations due to, among other things, the problematic financial situation at the enterprise, a few years ago metal makers switched their shipments from Vladivostok to Vanino, which made it possible to save on rail transportation by the shortest distance. Revival of production, and, as a result, the growth in products shipment is also expected due to the appearance of a strategic investor in the plant – recently Amurmetal was acquired in the course of bidding by Toreks. “I am confident that tough times are behind us. We make every effort to ensure the long-term development of the plant,” Vyacheslav Shport, the governor of Khabarovsk Territory, said in this regard.

Vanino commercial port is also working with imports. The largest part of the imported goods is accounted for by alumina which is consumed by aluminum factories of Rusal in Siberia. In recent years, such shipments stayed at the level of 1.1-1.3 million tons per year. With the commercial port and the Far Eastern Railway, alternative alumina transportation technologies have been applied, thus enhancing the traffic capacity of infrastructure of the Baikal-Amur Mainline.

According to Tatyana Shengelia, director general of LLC Trans Vanino Cargo (freight forwarding company), a few years ago, instead of specialized mineral wagons used to carry raw materials, they started actively using gondola cars released after unloading. Today, for the delivery of cargo in open rolling stock, they utilize reusable containers made from moisture-proof polypropylene fabric. Another feature used in transportation is a water-tight insert – a large cloth sack spread inside the gondola car and bound when the loading is over. “Far Eastern Railway made it possible to organize a production site at Vanino station for preparing the cars. And aluminum factories have introduced the technology of discharging raw material from this type of container,” Tatiana Shengelia said.

To Rusal, such transportation means cost savings. Loading into a new kind of packaging affects the speed of handling vessels and enhances smooth and regular delivery of raw materials by rail. “Aluminum production is a continuous process, and the possibilities of keeping raw material stocks at the factories are limited. Therefore it is very important to ensure regular delivery of alumina in accordance with the claimed amounts,” said Director General of LLC Trans Vanino Cargo.

We must also keep in mind the role the port plays in short-sea shipping, first of all, to Sakhalin, which is connected to the mainland by Vanino – Kholmsk ferry line. Today, the line is serviced by three specialized vessels that take freight cars and semi-trailer trucks on board. Food, compound feed, fertilizers, petroleum products are delivered to the island this way. The ferry also takes cargo for large-scale infrastructure construction projects. For example, in previous years, a lot of pipes for oil and gas pipelines were transported through Vanino; now the port handles equipment for the construction of Sakhalin power plant GRES-2.

Harbor of Coal

Vanino port acquired utmost significance with the increase in Russian coal exports. According to the Far Eastern Railway, while in 2008 Vanino port handled 1.1 million tons of mining products, in 2015 this indicator reached already 21.7 million tons. This came as a result of creating new transshipment facilities. Eight years ago, a terminal of JSC Daltransugol (a part of JSC SUEK) started functioning in Muchke Bay. At that time it was the most modern specialized port in the Far East. The complex gradually reached the target volumes of transshipment – 12 million tons per year – after which SUEK began to invest in doubling its capacity.

In 2016 alone the terminal handled 19 million tons of coal, and it plans to increase the volume in 2017 to 22 million tons. In early January, Daltransugol daily unloaded 777 cars on average – it is almost by 50 cars, or by 6.7%, more than in the previous year. The company continues to develop its infrastructure. Last year, it started movement on a new 3.5 km long connecting route between the even neck of Toki railway yard (Vanino station) and the Terminal private station, part of the port transshipment complex. Later, the Terminal-2 station was commissioned. According to Vladimir Shapoval, Director General of Daltransugol, it will make it possible for part of freight trains to bypass Toki, making the station’s facilities available for other consignees of Vanino transport hub.

The reason for that is the emergence of new consignees. In 2017, the construction of the Far Eastern Vanino Port is expected to begin at Cape Burny. The terminal is expected to reach its design annual capacity of 15 million tons in 2021. The complex will be oriented towards export of the products from Elegest coal deposit (Tyva Republic) and other Russian open-cut mines to the countries of Southeast Asia.

A major port for the processing of coal and iron ore concentrate is currently being built in the vicinity of the railway station Dyuanka near Vanino by LLC Sahatrans. Such companies as Siberian Anthracite, SDS-Ugol, Sibuglemet are ready to export their products through the new terminal, but the bulk of the cargo turnover will be accounted for by shipments of Kolmar MC, which is developing two mining and processing complexes in Yakutia: Denisovsky and Inaglinsky. The company plans to ship around 5 million tons of coal in 2017 (so far the shipping is carried out through other terminals in the region) and 14.7 million tons in 2020.

The operating commercial port is actively working with coal products. In early 2017, it handled an average of 208 cars of coal a day as compared to 126 cars in 2016. However, the increase in the volumes of discharged cargo had negative impact on the environment of the settlement adjacent to the port. Locals have held several protest rallies, and the issue was brought to the attention of Rosprirodnadzor (Federal Service for Supervision of Natural Resources Usage), which is going to hold a large-scale check at the port in summer.

As to the officials of the stevedoring company, they assured that they are already taking measures to enhance environmental safety. Storage areas used to keep coal are being encircled with a reinforced concrete wall; a dust suppression system for working with bulk goods is going to be introduced. “The aggregate purchased for Vanino port was chosen taking into account the weather conditions in the region and the specific aspects of working in winter, when dusting gets worse due to the delivery of dry coal,” said Valery Balakin, Director General of OJSC Port Vanino. In 2017, the stevedore is planning to increase the amount of funds allocated for the environmental measures up to 70 million rubles.

“The strategy of developing the coal industry of our country is largely focused on trade relations with Asia. Meanwhile, coal cargo is difficult to process from the point of view of ensuring environmental control. We, as a stevedoring company which is engaged in the transshipment of coal, are going to perform a full range of environmental measures in order to reduce the impact of production processes on the settlement of Vanino and on the waters,” Valery Balakin promised.

The Fate of the Residents

It would be wrong to say that the future of Vanino transport hub is connected only with the export of coal. For example, JSC Prime intends to construct a specialized terminal for transshipment of liquefied petroleum gases (LPG). The complex will handle tank cars, and then ship the product by marine gas carriers in the direction of Asia-Pacific countries. The future stevedore has already reached agreements with major manufacturers of LPG on the carriage of goods through the future terminal. The volume of investments is estimated at 30.1 billion rubles.

Remstal company is planning to work with liquefied petroleum gases and light oil products in Sovetskaya Gavan neighboring to Vanino. According to the Far Eastern Territorial Center for Corporate Transport Service (a structural unit of JSC Russian Railways), it is planned to ship the products to the company from the enterprises of subsidiary companies of Gazprom and Sibur located in Siberia. The expected volume of the handled cargo will initially amount to 2 million tons per year, followed by an increase to 10 million tons.

Bunkering of vessels in Vanino is expected to be carried out by the company Forum DV. Its specialized facility is designed to handle 150 thousand tons per year. “The region has a shortage of capacity for loading oil products from the terminal to tanker ships. Our project is aimed primarily at solving this problem. Vanino seaport is one of the most dynamically developing ports in Russia and has the necessary infrastructure for the implementation of such a project,” said Nikolai Zvorygin, Director General of LLC Forum DV.

By the way, this company recently became the second resident of the free port in Vanino district. The first company to do so was the above-mentioned LLC Far Eastern Vanino Port. Investments in the creation of its capacity will amount to 23.6 billion rubles. “Preferential treatment of the free port on tax payments and contributions to social funds will save 7.5 billion rubles in ten years,” estimated Viktor Sohrannov, Director General of LLC Far Eastern Vanino Port.

Obtaining the status of a free port resident will accelerate the return on the project, said Nikolai Zvorygin. “In future, an important role will be played by the possibility of duty-free import of equipment necessary for the operation,” said the head of LLC Forum DV.

Requests for the status of a free port resident were also submitted by other investors. Among those who intend to be engaged in stevedoring, is LLC Berth (a subsidiary of Rusal State Corporation). The company plans to build an alumina terminal with a capacity of 1.5 million tons a year in the waters of Vanino Bay. The required amount of investment is more than 5 billion rubles.

In total, as of early 2017, 19 projects were preliminarily chosen on the territory of Vanino District to be implemented within the framework of the free port regime with investments of about 86 billion rubles. It is planned that such status may also be given to the neighboring Sovetskaya Gavan district. According to preliminary estimates, this will make it possible to attract no less than 37 projects with investments of about 111 billion rubles.

For example, the plans of LLC Sovetskaya Gavan Commercial Sea Port include building in the area a terminal for shipping about 7.1 million tons of iron ore. Sea Port of New Sovetskaya Gavan LLC plans to work with containers, fish products, and grain. The volumes will amount to 3.4 million tons with a subsequent increase to 6 million tons. LLC Terminal Black intends to create facilities for receiving fuel oil and diesel fuel (initially their capacity will amount to 0.4 million tons) in the vicinity of the cape, where Remstal is going to build its transshipment complex.

Growth Engine

Meanwhile, the dynamics of Vanino transport hub turnover depends on the development of main roads leading to it. This year will see the completion of the highway Lidoga – Vanino (length - 323 km) started in 1999. By now, there is only one stretch that hasn’t been asphalted, from the 148^th to the 155^th km. However, it is railway connection that increase in port transshipment depends on most of all. Currently, the annual carrying capacity of the single-track line Komsomolsk-on-Amur – Sovetskaya Gavan amounts to 33 million tons. In 2008, when the project of its development started (in 2013 it was included in the program of modernization of the Eastern polygon of Russian Railways), it did not exceed 12 million tons. Over this period, many stations were reconstructed and built, a second way was added on some spans, and a new Kuznetsovsky tunnel was constructed, which helped to eliminate the bottleneck in this direction of the railway.

According to Sergei Drokin, Deputy Chief Engineer of the Far Eastern Railway, due to modernization, the Railway since 2013 has been annually increasing the carrying capacity by 7-10 % on average, thus ensuring the growth of cargo flows to the seaports. When the implementation of Eastern polygon program is completed (by the year 2020) the infrastructure in the direction of Vanino hub will be ready to provide transportation at the level of 37.1 million tons. Works are under way at other sections of the railway, too. In particular, by the end of 2017, the carrying capacity is expected to increase on the following sections of          Baikal-Amur Mainline: Tynda – Novy Urgal – from 19 to 25 million tons, Novy Urgal – Komsomolsk-on-Amur – from 18 to 22 million tons, Volochaevka-2 – Komsomolsk-on-Amur – from 19 to 22 million tons.

However, the actual volume of cargo shipments to Vanino and Sovetskaya Gavan may exceed the target indicator of Eastern polygon program. Thanks to the current stevedores and the future residents of the free port, the potential turnover of the hub Vanino – Sovetskaya Gavan may amount to 83-86 million tons per year by 2025, and exceed 100 million tons in 2030.

According to the director of Dalgiprotrans institute, Aleksey Lobov, a while back the experts of the design organization worked out five phases of developing a single-track line Komsomolsk-on-Amur – Sovetskaya Gavan. The first two phases are being implemented at present in the framework of the Eastern polygon modernization program, to be completed by 2020. The third and the fourth phases include the construction of a continuous second track between Komsomolsk and Vanino. That will take no less than 185 billion rubles, but the result will be an increase in the carrying capacity of the line to 110 million tons. The fifth stage should be electrification, on which it is advisable to work simultaneously with the railway section Volochaevka-2 – Komsomolsk-on-Amur. Total costs in the prices of last year will amount to 55 billion rubles. As a result, the railway will provide transportation to Vanino – Sovetskaya Gavan hub at the rate of 140 million tons per year.

It should be noted that the second track has to be constructed on a new route. “The engineering and geological conditions in the places where the line passes are unique and difficult for the Russian Railways network. The difficulty is predetermined by the rugged terrain, the combination of rocky and soft ground at the bottom of the roadbed, very complicated tectonic conditions in the region, the presence of areas with high seismic activity,” said Sergey Kudryavtsev, Vice-Rector for Science and Research of Far Eastern State Transport University. Railway experts drew up and sent to Russian Railways an investment application for further development of the section Komsomolsk-on-Amur – Vanino, including the construction of the second track. The final decision is to be taken at the level of the Government of the Russian Federation.