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Russia Restarts LPG Exports via Crimea’s Kerch Port -Traders

FILE PHOTO: A cargo ship sails next to the Crimea bridge in the Kerch Strait, Crimea, March 14, 2023. REUTERS/Alexey Pavlishak/File Photo

Russia Restarts LPG Exports via Crimea’s Kerch Port -Traders

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September 26, 2023

MOSCOW, Sept 26 (Reuters) – Russian producers of liquefied petroleum gas (LPG) have restarted regular exports of propane and butane via the port of Kerch in Crimea after an eight-year hiatus, industry sources said, despite security threats.

Regular LPG exports from Kerch were suspended in 2015 following broader international sanctions against Russian companies and producers over Moscow’s annexation of Crimea in 2014. 

The resumption of exports highlights Russia’s ability to manage international sanctions and continue its sea-borne energy exports. 

According to the sources, who spoke on condition of anonymity, regular supplies of LPG, or propane and butane, from Russian plants to Kerch for further exports, started in the second half of June.

“Supplies are going via the railways to the port of Kavkaz (in the Azov Sea), and then by ferry to Kerch as LPG transportation via the Crimean bridge is prohibited,” a source familiar with the trade flows said.

The 12-mile (19 km) road and rail bridge, which was personally opened by President Vladimir Putin in 2018, was bombed in October 2022 in an attack Russia said was carried out by Ukraine. The bridge spans the Kerch Strait linking the Black Sea with the smaller Azov sea.

LPG, which is mainly used as fuel for cars, heating and to produce other petrochemicals, has been exempt from sweeping Western sanctions. 

However, Russian companies, which are under sanctions, have redirected significant volumes of LPG away from Europe to the east, mainly to China, as well as to Russia’s Black Sea terminals for further exports to Turkey, Northern Africa and the Balkan countries.

A trader said that there were sporadic supplies of LPG from Kerch by tankers in spring, while now the exports, mainly to Turkey, have been on a regular basis. 

According to traders, around 6,000 metric tons of LPG were supplied to Kerch from Sept. 1-20. In July – August, deliveries totalled 5,800 tons. 

Traders said supplies via Kerch and Russia’s southern ports are quite attractive thanks to pricing, although exports via the route are still curbed by security threats and the availability of tankers.

Russian LPG exports rose by 10% in the first half of the year from the same period in 2022 to 1.911 million tons, while sea ports accounted for around a third of total overseas supplies. 

Some 34% of Russian total LPG exports were directed to Poland, 10% to Latvia, 6% to China and 5% to Afghanistan. 

(Reporting by Reuters; editing by Guy Faulconbridge and Sharon Singleton)

(c) Copyright Thomson Reuters 2023.

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