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Murmansk Shipping Company moves out of Varandey

Murmansk Shipping Company

Shipping major Murmansk Shipping Company this week announced that it will end all shipping operations from the Varandey terminal on the Barents Sea coast. The move could weaken the shipping company’s position in the Russian Arctic, analysts say.

Location

In close cooperation with Lukoil, the Murmansk Shipping company in 2000 opened its oil terminal in Varandey, north in the Nenets Autonomous Okrug. The terminal built about 3 km from the shore has had an annual capacity of one million ton oil. Now the terminal will be closed and dismantled, Seanews.ru reports.

The closure of Murmansk Shipping Company’s terminal comes as Lukoil subsidiary Naryanmarneftegaz opens its new terminal in the area. The terminal, which is located 22 km out at sea, has the annual capacity of 12 million tons of oil and will serve first of all the nearby Yuzhno-Khilchuyuskoe field.

Shipping operations to and from the new terminal will be conducted by the Sovkomflot, which thus replaces Murmansk Shipping Company in the area. The new terminal will open up for shipping with big-size tankers. Two pipelines will connect the terminal with a 325,000 land-based oil reservoir

A major part of the oil from Varandey will be shipped through the “Belokamenka” floating oil terminal in the Kola Bay operated by Rosneft.

The end of shipping to Varandey for the Murmansk Shipping Company comes as the company also is about to lose control over the state-owned fleet of icebreakers. Federal authorities have announced that the management of the nine vessels will be transferred to the state company Rosatom, thus leaving Murmansk Shipping Company without a core part of its business.

The latest developments could imply a weakening of Murmansk Shipping company’s role in the High North. At the same time, the number of shipping operations in the Arctic might in the years to come be abundant, which is likely to secure alternative assignments for the Murmansk company.