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Baltic exchanges on the up?

Expansion of bulk facilities around the Baltic Sea continues despite the geopolitics, commodity price shifts and environmental pressures.

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Poland has turned to the US, rather than Russia, to meet its recent demand for coal.
Poland has turned to the US, rather than Russia, to meet its recent demand for coal.
There is no escaping that tensions around the Baltic Sea have intensified, with knock-on effects for bulk commodity flows. As Russian and NATO military activity has increased, Kremlin rhetoric has become more menacing, and the region’s capitals – from Riga to Warsaw – more troubled. But bulk ports across the Baltic continue to invest to keep ahead of shifting trade patterns and opportunities.

Russia has made consistent moves to halt exports through Latvia, Lithuania and Estonia, and to use its own ports on the Baltic and Black seas. In May, Russian Railways, (RZD), the state monopoly, was reported to have refused requests to take cargo to Latvian ports. The move was seen as a backlash against Riga opposing Nord Stream 2, the Russian led gas pipeline project under the Baltic Sea to Germany.

Reuters reported RZD data that showed a 90% drop in volumes, including coal, transported by rail from Russia to Latvia. Riga and Ventspils reported declines earlier this year in Russian volumes. Swedbank, the Stockholm based banking group, has warned that economic growth is under threat from falls in Russian freight flows, which it said account for 80% of all rail transit in Latvia.

Meanwhile, Russian coal exports continue to increase via its Baltic ports. Rosterminalugol JSC, part of Russia’s Port Management Company, the coal facility at the port of Ust-Luga in the Leningrad region, exported 22 Mt of coal, mainly from Kuzbass, in the first 11 months of 2017. (In June, the coal port handled its largest bulk carrier, NAVIOS POLLUX, a 180,000 dwt Capesize).

Russia’s coal sector is facing its own pressure – from home-grown environmentalists. However, in July, lawmakers were persuaded to put a hold on plans to ban the open transport and storage of coal. Lobbyists argued it could take five years and US$2.5B to seal coal handling terminals and storage depots. Unions warned that 23 coal terminals could close.

A revised bill will oblige export coal terminals in populated areas to reduce emissions of harmful substances, using the best technologies available, official news sources reported. The Russian government will establish equipment criteria. The entry into law is scheduled for January 2018, with stevedores required to install the equipment before July 2019.

Dust settles

Russia’s Baltic Sea facilities would be among those better placed to cope with more stringent coal handling legislation. Rosterminalugol, the largest dedicated coal facility in the Baltic region, has undergone a three-phased development since it opened in 1996, with an emphasis on state-of-the-art automation, environmental safety, including dust suppression systems, and closed transhipment of coal.

The need to stay ahead of environmental demands has galvanised action in neighbouring Baltic States ports. In June, Freeport of Riga announced it would build a 20m-high wall to protect against coal dust pollution on its Krievu Sala development by 2019. Riga has been redeveloping the Riga Bulk Terminal (RBT) site to move its coal and bulk facilities away from the city, and closer to the Daugava River estuary.

Work on RBT began in 2012, with the first stage completed in 2014. The second stage includes two automated bulk warehouses, with the first 35,000t facility completed. A new shiploading system for Panamax bulkers is being installed, along with a further 25,000t capacity automated warehouse. Riga authorities believe RBT can become one of the largest grain handlers in the region.

Other innovations at the Latvian port include the introduction of containerised dry bulk handling by operator Riga Universal Terminals (RUT), presently for loading wood pellets on large dry bulk ships. Pellets are delivered from warehouse to pier in special-purpose open-top 20ft containers handled by RAM Revolver container tippler spreaders that empty the contents into ships’ holds.

Atis Šulte, director at RUT, says the new technology slashes the use of machinery and manpower resources by 50%. “We are able to load dry bulk and containers at the same pier, using one portalframe lift,” he adds. “It allows us to quickly organise our work in the terminal, and handle any type of ship.” Containerised dry bulk handling also reduces dust.

In the southern Baltic, Poland’s main bulk ports are focused on domestic coal-fired power plants, heavy industry and agriculture, rather than Russian transhipment. Gdansk and Swinoujscie can load Capesize vessels, with Poland’s hard coal exports totalling 9 Mt in 2016. One of Europe’s top coal producers, Poland relies on the fossil fuel for 90% of its electricity, according to the World Energy

As Poland pursues a policy of self-sufficiency and reduced ties with Russia, one unexpected development has been Warsaw taking up an offer made by Donald Trump on his visit there last summer. “Whenever you need energy, just give us a call,” the US President had said. In November, after national miner PGG failed to achieve production targets, Weglokoks, the state coal trader, turned to the US for coal, rather than to Russia.

The Panamax bulker NAVIOS HELIOS brought the 73,616t shipment from Baltimore to Gdansk in mid-November. Weglokoks said it needed to honour contracts with overseas buyers, with the coal going to the Czech Republic, Slovakia, Hungary, Germany and Austria, as well as domestic buyers. Analysts at ARP agency, the state-run agency, expect coal imports to exceed the 9 Mt in 2017.

Following the opening of Belgian owner SEA-Invest’s Dry Bulk Terminal at the deepwater Rudowy Pier in 2013, offering a coal export facility able to load 1,600 tph of coal from railcars onto ships, a universal deepwater terminal to the south of Rudowy is due to be completed in 2018, dredged and with renewed road and rail infrastructure.

In November, Gdansk’s authorities agreed with Krajowa Spólka Cukrowa (KSC), a Polish trader, to lease property for the construction of Poland’s first transhipment and shipping terminal for handling sugar. Adjacent to the Nabrzeze Wislane, the facility will include a 50,000t silo, a sugar-packing floor, and a 10,000t logistics warehouse for finished products.

Henryk Wnorowski, president of KSC, says the facility would make it possible to export 300,000 tpa of sugar outside the EU. The KSC terminal will enable the unloading of sugar in rail containers and silo trucks, and the packing of sugar in polypropylene bags that can be stacked in containers and cargo holds.

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