According to information obtained by IAA PortNews, contractors representing the Big Four dredging companies (Van Oord, Boskalis, Jan de Nul, DEME) which account for over 98% of dredging works in Russian ports withdrew from Russia’s Arctic infrastructure projects in February 2022.
As of today, Russian market of dredging depends on foreign companies. There are five companies in the world able to conduct the required scope of works within the limited period of navigation in the Arctic conditions — those are the Big Four dredging companies and Chinese company СССС.
Russian fleet of technical ships is inferior to that of the global leaders in terms of types of ships, performance, equipment and technologies. Thus, it cannot ensure implementation of tasks on port infrastructure development. Major operators of dredgers in Russia are FSUE Rosmorport (9 units) and Hydrostroy LLC (5 units). Besides, MRTS has two dredging ships with Baltdraga CJSC and OTEKO owning one dredger each.
According to the market players, total capacity of holds within the fleet of DEME Group (founder of Mordraga) is 210,000 cbm, that of the entire Russian fleet 39,000 cbm. Such a feet is not enough for any large-scale project on the Northern Sea Route by the deadlines.
Deployment of Chinese ships owned by СССС is not feasible as transition from Asia to the Arctic via the Suez Canal is too expensive. Besides, the prices offered by the Chinese company are several times as high as those foreseen by Russian projects in 2021.
Meanwhile, the decision on dredging under the current projects cannot be put on hold – NSR infrastructure is under a special control of the Government and the President. Capital dredging works under the key projects are to exceed 30 million cbm by 2025. The scope of works includes dredging under the project on reconstruction of Seaway Canal in the Gulf of Ob, dredging at oil terminal “Port Bukhta Sever”, development of “Utrenny” terminal, dredging for construction of a coal terminal based on the reserves of the Syradasayskoye field and a multifunctional terminal in the area of Cape Nagleynyn.
Maintenance dredging tasks are also crucial. In the Gulf of Ob alone (Seaway Canal, port Sabetta and terminal Utrenny) maintenance dredging will total 1 million cbm in 2022 and at least 3 million cbm in 2023 taking into account the completion of major dredging projects. After 2024, over 5 million cbm of material brought by underwater current should be dredged annually to ensure safe navigation in the Gulf of Ob.
Rosatom’s Hydrographic Company responsible for NSR infrastructure development is looking into creation its own dredging subdivision. Hydrographic Company has recently updated its potential investment programme adopted last year and requiring technical ships for implementing the company’s tasks on the Northern Sea Route. At the first phase, in 2023-2028, the company plans the construction of at least four auxiliary ships worth about EUR 40 million tonnes (estimations are based on European shipyards offer). In the future, the company’s technical fleet is to be expanded with total investments estimated at over EUR 200 million according to preliminary calculations.
Apart from construction of ships, the company is considering their purchase in the secondary market “We are studying the market. It is not only about the purchase of dredgers, — says Aleksandr Bengert, General Director of FSUE Hydrographic Company. — Issues related to the competence in construction and in operation of dredging ships should be addressed. Those are issues of training and simulation facilities. Most probably, it should be accumulated at the premises of Rosatom.”
In May 2022, the Arbitration Court of the Murmansk Region ordered to seize Russian-flagged ships owned by Boskalis LLC (Russian subsidiary of the Netherlands based Boskalis), Nordic Giant dredger and Arctic Scradeway pontoon. That measure was initiated by by Arctic LNG 2, LLC. According to the agreement signed by Arctic LNG 2 and Boskalis in 2018, the contractor undertook designing and manufacture of three gravity-based foundation structures for the Arctic LNG 2 project. But on 4 March 2022, Boskalis suspended its activities without any explanations or notifications. Having left its vessels in the port of Murmansk, the company gave a notice of unilateral termination of the agreement.
Experts are so far skeptical about the idea of creating a new dredging company by Hydrographic Company. According to Mikhail Grigoryev, Head of consulting company Gecon, “it is reasonable to attract foreign companies for dredging works when building terminals. Creation of the domestic dredging fleet is aimed at ensuring maintenance dredging. In that case, the capacity demands will be lower”.
However, if technical fleet is deployed for other Russian projects, its payback opportunities will be higher. “Expenses for the purchase and maintenance of dredging fleet pay back when it is in operation for over 300 days a year while dredging works in NSR ports are possible for only 60–70 days a year, in ice-free period from August till October. The rest of the year we are to look for additional orders to load the fleet,” says Aleksandr Bengert.
It should be reminded that, apart from Hydrographic Company, major customers of dredging works in water areas of the Russian Federation are FSUE Rosmorport, some shipbuilding companies and Gazprom.