THE SEA, A BOTTOMLESS WORLD...

Owing 42 tankers, 35 dry cargo ships and 10 auxiliary vessels, the Azerbaijani State Caspian Shipping Company (CASPAR) is the largest shipping company on the Caspian Sea.  In order to remain competitive, Caspar continually renews its fleet, ordering vessels of different types.  The main emphasis is placed on development of the tanker fleet, which transports oil from the Central Asian states.  However, the company's plans envisage the acquisition of new ferries and dry cargo carriers.  In years to come, work on modernization of the fleet will take place within the framework of the National Programme to develop the country's sea transport from 2008-2012, which was adopted a year ago.

Developed by the Azerbaijani State Maritime Administration (ASMA), the national programme plans the modernization of the cargo and passenger fleet and specifies the implementation of a number of strategically important measures to develop sea transport.  These measures include moving the Baku International Merchant Seaport to the village of Alat in the Qaradag District and building a Caspian Shipyard.  The fleet modernization programme envisages the purchasing of four ferries and 10 tankers with displacements of 13,000 tons or more.  The question of acquiring new dry cargo carriers and vessels of the RORO [roll-on/roll-off] type has not been decided yet, because the company seems to favour the idea of upgrading available vessels, which should extend their service life by another decade.

Caspar's oil tanker advantage

In order to remain competitive, Caspart is always increasing its tanker potential:  six 13,000-ton-displacement tankers have been bought in recent years.  The first order for the Caspian Sea's largest oil tankers of the river-sea class was placed by Caspar with the Krasnoye Sormovo shipyard in Russia.  The capacity and draft of this type of vessel are optimal for free operation in all the seaports of the Caspian and obviate the need for the remodelling of seaport terminals or dredging the bottoms.  Six oil tanker vessels of the 19619 project have been floated off by the Russian shipyard since 2004 - the President Heydar Aliyev, the Babak, the Sax Ismayil Xatai, the Koroglu, the Dada Qorqud and, late last year, the Zangazur crude oil carrier was launched.  All the vessels of this project are equipped with 12 tank sections for the simultaneous transportation of different types of oil products and have dual sides and bilges to provide greater safety when transporting liquid cargoes.  The seventh oil tanker of the same series, called the Susa, has already been released from the ways and is currently undergoing sea and dockside trials; its arrival in Baku is scheduled for July 2009.

There are plans to order new Project 19619 oil tankers in addition to the 42 oil tankers of the Caspian Shipping Company, and vessels of even greater capacity might be added to the fleet too.  The global economic crisis caused minor changes to the dates of placement of these orders, however, the terms of their implementation has not come into question.

Our country needs a powerful oil carrier fleet to successfully implement, together with Kazakhstan, the project to transport oil from the Tengiz, Kashagan and Karacha-ganak deposits to the western shore of the Caspian Sea.  At the initial stage, these projects will make it possible (after 2013) to transport 25 million tons of oil per year via the Baku-Tbilisi-Ceyhan oil pipeline (BTC), with an eventual increase to 38 million tons.  Back in November 2008, Azerbaijan and Kazakhstan signed an agreement to create the Transcaspian hydrocarbon transportation system.  In preliminary estimates, the project will require about investments of $3 billion.  The Transcaspian system project envisages the construction of a seaport and an oil terminal in the village of Kuryk on the Kazakh shore and at the Sangacal-Qaradag oil and gas terminal on the Azerbaijani shore and the expansion of the oil carrier fleet to deliver oil to the BTC oil pipeline.

It is notable that the Caspian Shipping Company has no serious rivals for now in the implementation of the plans for maritime transportation of "big-time" oil from Central Asia.  For example, today Kazakh-stan has only five oil carriers; three more oil carriers were commissioned from the Krasnoye Sormovo shipyard in Russia, and the first of these will be completed by the end of this year.  Kazakhstan has periodically voiced plans to build three largest-capacity tankers on the Caspian Sea with deadweights of 60,000 tons.  They are to be used to transfer oil from the deep seaport of Kuryk.  However, the building of these giant oil tankers might encounter technical difficulties - the need to dredge the bottom on the western shore of the Caspian and the re-equipment of seaport terminals.

To avoid lagging behind the Caspian leader, Turkmenistan has also announced new plans to build an oil carrier fleet.  However, the Turkmen River and Sea Shipping Company has so far confined itself to placing an order for two tankers with deadweights of about 7,000 tons each.  The total sum of the contract exceeds $31 million and the tankers are expected to be built by the same Krasnoye Sormovo shipyard this year.  As for Russia, its presence on the Caspian Sea is limited to four 7,000-ton river-and-sea class crude carriers, which belong to the Palmali shipping company, the operator for the LUKoil company.

So, Caspar's powerful tanker fleet can handle three quarters of raw materials and oil products in the Caspian Sea.  "Last year the shipping company's vessels transported 13 million tons of cargo, and most was oil cargo.  This year, the company plans to increase the amount of cargo it transports:  the amount of transit oil from Tengiz will increase and will amount to 4 million tons this year," said Aydin Basirov, head of the Caspian Shipping Company.

Ro-Ro is obsolete

In contrast to Caspar's tanker fleet, which is entirely employed in cargo operations on the Caspian Sea, the majority of the 35-vessel-strong dry cargo carrier fleet of the shipping company is used in neighbouring seas.  Today, some 25 of the available dry cargo carriers transport cargo in the Black, Mediterranean and, partly, Marmara seas.  These dry cargo carriers and roro vessels have no permanent routes, and they mostly transport one-off cargo loads to the seaports of Europe, the Near East and North Africa.  In the Caspian, ferries are generally used.

The forced "emigration" of Caspar's dry cargo carriers stems from the fact that, today, the majority of dry and container cargoes are transported between the seaports of the Caspian by Russian vessels.  They also deliver most of the cargo from the Black, Mediterranean and Baltic seas to the Caspian sea basin.  This situation has arisen because of limitations on the freedom of passage through the system of Russian channels to the Black and Baltic seas.  And, protecting the commercial interests of its fleet, Russia is unlikely to agree to abolish the system of permissions or lower the high tariffs on the passage of foreign vessels through its territorial waters in the near future.  And the Russian authorities recently introduced a ban on the entry of vessels which have been in operation for over 30 years into its inland waters.  This is a very alarming fact, because today 80% of Azerbaijani dry cargo carriers have been in operation for 25-30 years.  All these limitations force the Azerbaijani dry cargo carriers which operate in the Black and Mediterranean seas to enter their home port of Baku very seldom; they usually only do so when capital repairs are necessary.  This is why more than three quarters of the dry cargo handled by Caspar are on foreign routes.

The situation which has evolved has long prevented the growth of Caspar's dry cargo carrier fleet:  the latest acquisition was the purchase of the Maestro Niyazi dry cargo carrier with a deadweight of 5,885 tons in 2002.  However, the dry cargo carrier fleet of Azerbaijan is gradually aging, so Caspar has been considering the possibility of modernization.  By all accounts, they do not plan to buy new dry cargo carriers, but simply to upgrade existing ones.  "The majority of our dry cargo carriers have been in operation for more than a quarter of a century, and these vessels are no longer allowed into the domestic waters of other countries.  We plan to upgrade the oldest vessels and thereby extend their service lives by another 10 years," said the head of Caspar, Aydin Basirov.

"The ferry goes and the water whispers something..."

The situation in ferry transport is somewhat different.  At present, Caspar's assets include seven ferries, five of which were built back in the Soviet period and carry no more than 28 rail wagons each.  The two new ferries were bought from the Croatian shipyard in the town of Pula in the last couple of years.  The new ferries are 154.5 metres long and can take 52 rail wagons or tank wagons.  Caspar's plans for the next few years the acquisition of four more large-capacity ferries, but where they will be built and under what terms are for now the subject of negotiations between the company and several shipbuilding companies.

The purchase of new ferries is a step towards increasing cargo traffic across the maritime section of the Great Silk Road (TRACECA [Transport Corridor Europe-Caucasus-Asia]) - vessels of this type ply the Baku-Turkmenbashi-Aktau route, on which ferry transport is developing at a high rate.  In Caspar's assessment, ferry cargo turnover is expected to double this year.  While in the second half of 2008, 2,000 tons of rail wagon cargoes were carried, this year 4,000 tons will be transported.  And after 2011, when the Baku-Tbilisi-Kars railway is put into operation, the workload of the ferries will increase: our country alone will increase its cargo turnover by 7-10 million tons a year, by the most modest estimates, not to mention the possibility of increased transit (container) cargo turnover between Europe and Southeast Asian countries.  This is estimated to stand at more than 20 million tons a year today.

Yet another promising direction for operations of the non-oil fleet of the Caspar in the Caspian Sea could be the implementation of a joint project with Russia.  Roro vessels will be used on the Baku-Astrakhan route.  The transport authorities of Russia and Azerbaijan have long been considering the possibility of increasing cargo turnover between the countries by increasing the shipping component.  This problem becomes particularly pressing in the spring and summer periods, when our country's exports of fruit and vegetables to neighbouring markets increase.  Furthermore, from May 2007, the truck ferry system which used two roro vessels, the Azerbaijani Bastakar Qara Qarayev and a Russian vessel of the same class, has been put into operation.  In particular, the vessel which belongs to Caspar can take onboard 60 KamAZ trucks or 40 heavy trailer trucks simultaneously.  However, the pilot project is temporary.  Given the seasonal demand for maritime transportation of fruit and vegetables, the traffic slows down in the autumn and winter and resumes when demand increases in spring and summer.

Overall, it seems that the Azerbaijani shipping company is not only overcoming the difficult period of crisis and maintaining cargo turnover at a high level, but also plans to develop its potential in the Caspian region.