China to develop a grain terminal in Russia

Port of Zarubino, Russian Far East

China’s Hebei Port Group Co., Ltd. intends to invest into development of the port infrastructure in the Russian Far East. The Group plans to construct a grain terminal in Primorsky Krai (Primorye region), informs TASS news agency.

The terminal will become part of the supply chain of grain transportation from Heilongjiang province in the North East of China via Russian ports to the southern Chinese provinces. The volumes are assessed at 6 to 10 mln tons annually.

The Chinese Group has been offered several alternatives, i.e. to find a land plot and develop its own green field project, to join a project which is currently under way, or to invest into the existing port. According to Hebei Port Group, the company will consider all of these.

The proposed route is called the Primorye-1 international transport corridor and is being actively developed by Russia to encourage trade and investment in its Far Eastern region. It is also considered attractive to the manufacturers of the landlocked Heilongjiang province, as its length from Chinese shipping centers to the Russian ports is about 500 km, whereas an alternative route to the nearest Chinese port of Dalian is about 1,300 km.

Primorye-1 will link Chinese city of Harbin with the Russian ports of Vladivostok, Nakhodka and Vostochny by rail via the border stations at Grodekovo in Russia and Suifenhe in China. In 2016, the route was successfully tested by transporting 250 TEU of timber from Heilongjiang to Vostochny for onward shipping to the Chinese ports of Shanghai and Huangpu.

There is also the Primorye-2 transport corridor, which is currently being upgraded too. It runs further south, closer to the border with North Korea, and links Hunchun with the ports of Posiet and Zarubino.

In July 2017, China and Russia signed a Memorandum of Co-operation on the two routes, which implies close collaboration for developing the transport infrastructure of Primorye-1 and Primorye-2, including railways, highways, ports, airports, border-crossing points and communication systems.

In the recent years, numerous projects of a grain terminal in the Russian Far East have been announced by various investors. The declared capacities varied from 2-5 mln tons up to 33.5 mln tons per year. The closest to reality is JSC “United Grain Company” (50% – 1 share owned by Summa Group) with its Far-Eastern Grain Terminal, a 10 mln tons facility at the port of Zarubino. Today, the scarce volumes of the local Siberian and Far Eastern grain are handled by Vladivostok Sea Commercial Port (controlled by Summa Group).

Hebei Port Group operates with 37 companies engaged in port construction, development, management, port equipment manufacturing, port logistics and services, mostly for bulk cargoes in the region of the Bohai Sea in the North China.

Julia Louppova:
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