Global commodity price reporting agency Argus Media held its fourth Argus Caspian and Black Sea Transportation Corridor international conference on 14-15 September 2017 in Batumi, Georgia. Market participants discussed the current status and latest trends for oil and dry bulk transportation in the Caspian and Black Sea region as well as the future prospects for cargo traffic.
The event was supported by general partner GR Transit and strategic partner Petrocas Energy Group. The conference brought together key players in the transportation market, including representatives of transportation and logistics companies, terminals, oil companies, refiners as well as trading firms and buyers of oil and dry bulk cargoes. The event was sponsored by GR Transit Line, KazTransOil Group and Batumi Oil Terminal.
The conference was attended by over 120 delegates from 12 countries, including Georgia, Azerbaijan, Russia, Kazakhstan, Turkmenistan, Switzerland and others. The participants included key regional companies such as Batumi Sea Port, Socar, BF Tanker, Tengizchevroil, Tengiztransgaz, Turkmen Petroleum Trading, MRP Tanker, ОTEKO, Port of Poti, KTZ Express, Maddox, Rail Chem, RN-Bunker, Sberbank CIB and Mitsubishi, as well as representatives from government ministries and agencies.
The delegates were welcomed by the deputy minister of finance and economy of the Autonomous Republic of Adjara, Konstantin Megrelishvili, Batumi deputy mayor Bagrat Manvelidze, GR Transit director David Chiradze and the head of Argus Media in Russia and the FSU, Vyacheslav Mischenko. They stressed the importance of the Argus conference for the development of the region’s transit potential and extended their thanks to participants for their co-operation and dialogue amid a shrinking cargo transportation market.
Mamuka Bakhtadze, the director of Georgian Railway, who was one of the key speakers at the conference, noted that the launch of the Baku-Tbilisi-Kars railway would have a positive effect on the cargo transportation market as new cargoes would enter the region. “This is the shortest inland route connecting the countries of the region. Cargo throughput will amount to 6.5mn t/yr initially and is expected to rise in the near term. The official
Petrocas Energy Group’s managing director, Nugzar Katamadze, talked about the new goals and opportunities offered by the market. Specifically, the strong rise in EU import duties that occurred in 2015 and the development of alternative routes to Afghanistan have had an impact on trade through the regional transit corridor.
Argus analyst Evgeny Krishtalev spoke on the trends and prospects for the Caspian and Black Sea Transportation Corridor, providing the latest information on cargo flows and tariff policies in the countries that use the route.
Nurzhan Alpyspekov, head of multimodal transportation at KTZ Express, and Ezizmurad Annamuradov, a representative of TransCaspianLogistics in Turkmenistan, delivered detailed reports on the infrastructure and context of railway transit between Caspian and Black Sea region countries.
“Trade between the neighbouring regions will grow by one-and-a-half times to $1 trillion by 2020, creating transit potential in Kazakhstan,” Alpyspekov said.
Trans Logistic business development director Jaba Tarimanashvili gave an account of the barriers to cargo transportation in the Caspian region using the examples of Azerbaijan and Georgia. He presented his report at the session on oil and dry bulk transportation, arousing a lively discussion among the participants. “The current tax code, one-way tariff preferences, poor infrastructure and geopolitical interests are key barriers and problems for the development of cargo transportation in the region,” Tarimanashvili noted.
Tracia Trading chief executive Ion Nemerenco delivered a report on rail shipments of urea and sulphur from Azerbaijan. He expects these shipments to grow as new production facilities are launched in the Caspian countries.
Martin Voetmann, the commerce manager of Aktau International Commercial Sea Port, told the audience about the port’s role in infrastructure projects related to the creation of the New Silk Road and the development of the regional transportation and logistics infrastructure.
The first day of the conference closed with a traditional cocktail reception, which provided an opportunity for the speakers and delegates to follow up on the discussions in an informal atmosphere.
The second day was dedicated to discussing the development of container transportation in the region. Market participants believe that the current growth in container transportation may drive an increase in cargo traffic across the region in the near term.
The audience showed a particular interest in the report given by GR Logistics and Terminals chief executive Levan Sulaberidze, who provided an overview of infrastructure projects related to upgrading rail lines that provide access to port terminals. These upgrades will increase capacity at the ports to 100mn t/yr from 27mn t/yr, reduce operating costs and speed up cargo delivery. Georgia is upgrading a section of railway that is critical for the development of the Anaklia deepwater seaport, which will enable container transportation in the country. The project is scheduled to be completed in 2019. At the end of the session, Argus Media analyst Sandugash Akhmetulina gave an overview of the Kazakh market for railcar leasing.
Conference delegates also discussed the prospects for increasing cargo traffic in the Caspian and Black Sea Transportation Corridor and the benefits offered by the corridor compared with alternative routes from Asia to Europe. They identified key challenges faced by the project and mechanisms that would increase the corridor’s competitiveness and make it more attractive to shippers.
The next annual Argus Caspian and Black Sea Transportation Corridor conference will take place in 2018 in Tbilisi, Georgia.