HANSA 09-2019

Finanzierung | Financing

Finanzierung | Financing Into the wild North – from East to West Despite all trade policy challenges and sanctions, Russia continues to work intensively on its maritime infrastructure. Particularly in focus: the Arctic. Support is not only coming from China and the Middle East but from Europe, too Regardless of the angle you look at the Russian maritime industry, it is predominantly concerned with the tanker business, followed by bulk shipping, predominantly with smaller units. This observation is reflected in various areas such as fleet development and financing, ports, trade routes and commodity flow, infrastructure and politics. The second determining factor is international politics, a complicated mixture of trade policy, sanctions, energy policy, climate policy and geopolitics. Sovcomflot shipping group (SCF) is by far the most important shipping player for Russia. Accordingly, its name has rarely or never been missing in maritime news in recent months whenever the vast expanse with coasts on the Baltic Sea, the White and Black Sea, the Caspian Sea, the Pacific in the Far East and not least the Arctic Sea and the Northeast Passage is mentioned. The potential is enormous, especially since Russia has large deposits of raw materials on or below the seabed, e.g. gas fields need development and integration into comprehensive logistics chains. In addition, there are large quantities of crude oil that are exported – mainly by tankers. Despite various disputes between Russia and other countries, let alone the economic sanctions imposed as part of the annexation of the Crimean peninsula, oil transport has not collapsed in the long term. Increasing oil exports Exclusively for HANSA, Court Smith, Senior Analyst at Vessels- Value, took a close look at the shipments with the result that »total crude oil exports from Russia have continued to increase over the past several years. The distribution of exports has been mixed. Black Sea exports have increased the fastest and seen the steadiest movement upwards. Baltic exports slipped downwards in 2017 and 2018 but have since rebounded upwards.« The mix of ships which moved cargoes out of particular regions has shifted over time as well. Smith has made a side-by-side comparison of scale of crude tankers which loaded cargoes first half of 2019 versus the same time period of 2013. There is a marked shift towards Suezmax vessels, which offer favourable dollar per ton shipping costs in most rate environments. »A larger percentage of coated ships are being used to export cargoes as well, 16 HANSA International Maritime Journal 09 | 2019

Finanzierung | Financing Sovcomflot is heavily engaged in the oil and gas sector which is a reflection of the weak returns seen in the clean tanker markets in 2018 that encouraged owners of older units to enter the crude or dirty products trade«, the analyst explains. Clean tanker exports from Russia are trending upwards as well. There is a growth in the volume of exports from three of the four regions (see table »Clean Tanker Shipments by Region«). Nevertheless, Russian shipping also has to contend with market conditions, political and financial circumstances. However, Sovcomflot & Co. seem to be coping relatively well. After a slump in 2016, new building activities have risen continuously – at the same time second-hand purchase projects have shrunk – which also makes sense in view of the fleet age. A large proportion of the ships are more than 25 years old. In advance of the trade show »Neva« (see extra box), official sources said that 2018 saw »global markets realize Russia’s strategic LNG potential, with business booming in Russian-flagged vessel builds, energy exports, Arctic shipping volumes and Northern Sea Route infrastructure redevelopment investments.« Novatek’s Yamal LNG project shipped its 10 millionth tonne, attaining maximum output capacity one year early and projecting a further 10 % increase for 2019. Sovcomflot announced yet further expansion of its LNG-fuelled fleet. Japan’s Saibu Gas signed with Novatek to utilize the Hibiki LNG terminal while Mitsubishi Corp. showed interest to join LNG2 at the ground level. South Korea and Japan signed strategic energy agreements with Russia. In addition, Moscow announced investment plans for Northern Sea Route port development through 2024. Partners in the East and West Despite all state support by the government Putin/Medvedev, international partners are also needed to modernize fleets and infrastructure. These partners have been found, especially in the Far East and the Middle East, but also in Europe, including Germany. One of these partners is the Arab DP World Group. An agreement was concluded in June to improve the infrastructure on the Northeast Passage, which is often criticised for not being efficient enough. © ABB HANSA International Maritime Journal 09 | 2019 17