Dredging expands Ukraine grain transshipment capacities

Mariupol sea port to expand grain export capacities. Credit: Vladimir Vorotnikov

As of early December of 2019, Ukraine’s sea ports’ grain transshipment capacity has increased by 9% to 85 million tonnes compared with the previous year, and a further rise is on the horizon thanks to some important projects embarked on in this field, Ukraine Sea Ports Administration (USPA) said in a statement on its website.

USPA is putting a lot of effort to boost the export capacity on agricultural commodities even further and there are two important agreements that have been signed recently, Raivis Veckagans, director of USPA, said, speaking at a press conference in Kiev in late November.

“In September, the USPA signed an agreement with Kernel on the UAH3 billion (USD126 million) investment into the infrastructure development of the Port of Chernomorsk,” Veckagans said.

USPA took on an obligation to perform dredging in the Chernomorsk sea port, including along the berths through which Kernel’s agricultural cargo would be shipped, Veckagans explained. Kernel, in turn, would build a new grain terminal in the sea port and guarantee transshipment of no lower than 6 million tonnes of grain per year from 2021, possibly 7 million tonnes per year in the future, Veckagans said.

“Those volumes would secure a short payback period on the capital investments of the project,” Veckagans said, adding that the USPA was set to invest UAH 230 million.

In addition, in October of 2019 USPA signed a memorandum of understanding with the Beijing-based agribusiness platform COFCO to expand the transshipment capacities in the Port of Mariupol by a factor of 3.5 times to 2.3 million tonnes per year, Veckagans said. The investment cost of the project is estimated at UAH1.3 billion.

The project involves some dredging operations and a reconstruction of two berths, Veckagans said.

In addition, throughout 2019 Ukraine’s dredging fleet performed an unprecedented amount of dredging operations on the country’s main river Dnepr, connecting the main agricultural regions with the Black Sea ports. Thanks to those projects, the average weight of loaded barges went up from 520 tonnes to 960 tonnes in one voyage, Veckagans said.

The Ukraine is a major grain exporter and needs to increase transshipment capacities as export supplies have been seen gradually growing over the past several years. In 2018-19, the country exported 50.4 million tonnes of grain, an increase of 23% compared with the previous year, the State Statistics Service Gosstate estimated. The Ukraine is on the way to boost exports to 60 million tonnes per year by 2030, Ukraine’s Institute for Economic Research and Policy Consulting forecasted.