Russia plans coal port in Barents Sea -Lavna head

Mon Oct 11, 2010 11:48am BST

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* Eyes shipments of 18 mln tonnes, 3-phase construction plan

* First phase to be completed in H2 2014

By Denis Pinchuk

ST PETERSBURG, Russia, Oct 11 (Reuters) - Russia is set to build a new export terminal worth $300-$500 million and capable of shipping 18 million tonnes of coal a year via the Barents Sea, the head of the Lavna Trading Port Company told Reuters.

The new port is expected to provide a cheaper path to Europe and beyond for Kuzbassrazrezugol (KZRUI.RTS), Russia's second-largest steam coal miner, commonly known as KRU.

"The Lavna sea trading port has all the documents required for the construction of the port," Sergey Kropotov said, adding that the new terminal would serve Europe, the United States and Canada.

Should there be a need in the future, Lavna could eventually increase shipments to 36 million tonnes per year, he added.

Construction of the three-phase project will start in 2012, and the first phase, shipping 6 million tonnes of coal, will be completed by the end of 2014, said Igor Rusu, head of state agency Rosmorport. He did not give a target date for the 18 million tonnes.

KRU and the Siberian Business Union, a transport-to-radio conglomerate, each hold 50 percent of the Lavna project.

The terminal will be built in the Kolskiy bay of the Barents Sea -- itself an arm of the Arctic Ocean, which lies to the north of Russia and Norway.

The bay is deep and does not freeze, meaning that there will be no restrictions on the size of ships, Kropotov said.

"Thus the terminal in Lavna will allow a saving of $2 to $4 dollar per tonne of coal on the shipments, compared with all other north-western ports in Russia and the former Soviet Union," he added.

Currently, the shipment of coal from Murmansk costs exporters around $11-14 per tonne, sources say. Murmansk currently works only with Russian companies SUEK and Mechel (MTL.N), as well as Italy's Coeclerici.

KRU, which has said it expects to export 24 million tonnes of coal this year, declined to comment on the port plans.

In 2009, KRU exported about 5.5 million tonnes of coal via Vostochny port on the Pacific, and another 12.6 million tonnes through the Baltic ports of Ust-Luga, Riga and Tallinn.

The company exported another 5.8 million tonnes of coal through the Black Sea ports of Taganarog, Tuapse and Yuzhny.

(Writing by Toni Vorobyova, editing by Jane Baird)