Energy Ministry: No Problems At Ports If Russia Continues Selling Coal To Ukraine

First Deputy Minister of Energy & Coal Industry Yurii Ziukov has said in an interview with the Focus publication that Ukrainian seaports currently have no problem with transshipment of imported coal.

"There are no problems with transshipment. The capacity of the Azov and Black Sea ports is 700,000 tons per month. We are not yet carrying such volumes of coal that could cause some imbalances in the seaports. We may have problems unloading coal only if Russia completely blocks our ability to buy coal from it and all purchases are moved overseas. However, that problem can also be solved because nearby are the deep-water ports of Romania and Bulgaria, where coal can be unloaded and transported by coastal vessels via the Sea of Azov or rail. Therefore, the Russians are not yet even trying to block deliveries to us because they understand that we will find a way out," said Ziukov.

As the CFTS portal reported in September, Ukraine may need to import 2-2.4 million tons of coking coal and 5.1-5.9 million tons of steam coal by the end of the year if the level of production of steel and steam coal is maintained at the August level. Thus, coal imports in the entire 2014 are expected to total between 15 million tons (+5% compared with 2013 in the baseline scenario) and 16.2 million tons (+15% in the pessimistic scenario). If Ukraine does not buy coal from Russia, almost all of this increase in volume will have to be transshipped through seaports. "Since we exported coal last year and we are now importing it, the load on seaports will increase by about 3-3.2 million tons," said Yevhen Dubohryz, an analyst with CASE Ukraine.

This figure is critical for Ukrainian ports. "Given their current capacity utilization, seaports capable of receiving vessels of the Panamax and Capesize classes (deep-water ports) will be able to transship only an additional 2.8-3.2 million tons by the end of the year," said Andrii Isaiev, an analyst with CFTS Consulting. However, the capacity utilization of bulk facilities at the Yuzhny, Odessa, and Nikolayev ports exceeded 90% in 2013.