New grain terminal at Yuzhnyi

A computer generated impression of the terminal A computer generated impression of the terminal

The Ukrainian Sea Ports Authority (USPA) and American company Cargill have formed a joint venture to develop a new grain terminal at the Ukrainian port of Yuzhny on the Black Sea coast.

The joint venture is known as MV Cargo LLC, which a specially formed company for the Yuzhny port project.

Under the terms of the agreement MV Cargo will undertake the construction of a specialized grain terminal at berth No.25 in the port of Yuzhny. In the first phase of the project the capacity of the terminal will be up to 5 million tonnes per annum and there is a second phase that will expand the terminal capacity by another 2.4 million tonnes.

To facilitate the handling of larger grain ships the USPA will be responsible for the dredging of the area around the new berth as well as the approach channel to the terminal to a depth of 16 meters. This new channel depth is 2 metres more than the current available depth in the channel and it should facilitate the handling of larger ships at other facilities in the port as well. These include a wide variety of chemical plants and bulk cargoes as well as a proposed LNG plant. The new channel depth is designed to allow ships of up to 100,000 dwt to use the new terminal.

The estimated investment in the construction of the grain terminal will be US$ 104 million. In addition USPA is investing US$ 50 million for dredging works in the port. A feasibility study of the project for advanced depths in the port of Yuzhny has already been submitted for endorsement by the necessary authorities USPA indicated.

The terminal will be majority-owned by US agriculture giant Cargill Inc. through a joint venture company. The signing comes on the back of an agreement signed on 24 February 2016, when

Cargill and MV Cargo penned the construction deal for the new grain terminal in Yuzhny sea port.

"A key component of the agreement for us is the terms under which Cargill will ensure the loading of the terminal with the required volumes of grain cargo. This is a good example of an idea to assign the cargo owner with certain berth, which creates a comfortable and clear condition for public-private partnership", said the CEO of USPA, Andrey Amelin. "We expect the project to generate over UAH 300 million in tax payments annually and to create employment for around 350 people," said a director of MV Cargo LLC, Alexander Primak.

The construction of the grain terminal is scheduled for completion by the 1st. September 2018. As part of the agreement USPA has agreed to finish the dredging of the channel and the berth by the 1st.February 2018. Yuzhny is a relatively new port in Ukraine with development of the port starting in 1973.

By Dag Pike

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