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Russia's LPG Exporters to Use Georgia's Poti Port

Maritime Activity Reports, Inc.

July 12, 2022

© k_samurkas / Adobe Stock

© k_samurkas / Adobe Stock

Russian exporters will start shipping supplies of liquefied petroleum gas (LPG) to Bulgaria via Georgia's Black Sea port of Poti in July as traditional export routes remain closed, according to traders and Refinitiv Eikon statistics.

Russia stopped supplying LPG to Ukraine on Feb. 24, when Russia sent troops into the country in what Moscow calls a "special military operation", and has also stopped LPG rail transit to Romania, Hungary and Moldova via Ukraine, obliging exporters look for new routes.

Finland, another large export route for Russia's LPG, has cut purchases sharply, according to Refinitiv data. Last year Russia exported 25% of its LPG to Ukraine and Finland.

This month some 3,000 tonnes of LPG from Surgut will be transported by rail to Georgia's Poti, and then via sea ferry to Bulgaria's Varna, according to Refinitiv Eikon rail data. Gazprom GAZP.MM and Surgutneftegaz supply their LPG from Surgut.

"LPG supplies via Poti are being considered due to limited sales opportunities through other main export routes," an industry source said.

Bulgaria consumes about 30,000-35,000 tonnes of LPG per month, according to traders' data. It produces about 10,000 tonnes of LPG monthly itself, and imports the rest from Romania and Russia.

Limited export possibilities resulted in a fall in Russian shipments of LPG abroad to 250,000 tonnes in May from some 370,000 tonnes per month in early 2022, according to Refinitiv Eikon data.

LPG rail shipments from Surgut via Georgia's Poti to Bulgaria are about 50% higher than supplies to the EU via Ukraine, with the rail route from Surgut to Poti costing about $260-280 per tonne, and the ferry service between Poti and Varna $130-150 per tonne, according to traders' estimates.

Nevertheless supplies sent via the route are still looking profitable comparing to domestic sales due to a fall in LPG prices in Russia, traders said.


(Reuters - Editing by Jan Harvey)

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