Why does Azerbaijan need to order construction of tankers in Russia?

Azerbaijani ship owners have started talks with Nizhgorod ship-building plant Krasnoye Sormovo to build two tankers, reported Russian media.

The draft contract with the sum and date of delivery of the ships has been submitted to the Azeri side.

These will be tankers RST-27, which are used for transportation of crude oil and oil products by sea and river.

According to Turan, RST-27 tankers have deadweight up to 7,000 tons with the length of 140 meters and width of 16.7 meters. The speed of the ships reached 11.7 knots (21,67 km/hour). The tanker crew includes 12 people.

It is obvious why Azerbaijan is willing to increase number of its tankers in the Caspian Sea: the volume of liquid cargo transportation (oil and oil products) from Turkmenistan and Kazakhstan has been growing. Last year 5.2 million tons of crude oil was pumped via the Baku-Tbilisi-Ceyhan oil pipeline from the right shore of the Caspian Sea. Another 3 million tons of Tengiz oil is transported via Azerbaijan by railway to the Georgian ports Batumi and Kulevi. Turkmen oil products are also transported through Azerbaijan. Azerbaijan’s oil fleet is able to transport over 10 million tons of liquid hydrocarbons a year.

However, it is not clear why Azerbaijan needs to order tankers in Russia. The country has  a moderm shipbuilding plant, which has been built by one of the leading foreign companies.

The ship building and ship repair plant Baku Shipyard Company (BSC) was put into operation near Baku in September 2013. Its shareholders include SOCAR with 65% jointly with Azerbaijan Investment Company (25%) and Singaporean Keppel Offhore & Marine (10%).

It has been announced during construction that the new plant will be able to manufacture 4 tankers with deadweight of 15,000 tons or two tankers with deadweight of 70,000 tons a year. The plant can manufacture four vessels for offshore service and towing as well as repair 80-100 various vessels a year. It can also manufacture military vessels. Later on the frontier troops have built a separate plant for themselves. SOCAR’s plant has received only one order as  a part of the Shah Deniz 2 project.

The country has spent $470 million to build the ship-building plant. After launching of the plant in 2014-2015 SOCAR spent about $70 million to build two passenger vessels for oilmen abroad. The orders have been fulfilled by the Australian ship-building plants.

Cost of construction of RST-27 tanker at the Russian ship-building plant is about $12-15 million depending on the tanker’s specifications. Krasnoye Sormovo plant can put into operaion two tankers during a year. BSC has not put this process on track yet. On the other hand, construction of the vessels is expensive. It is more important to save money during the crisis.—0—