Development of the port of Poti by strategic investor in the post-crisis world

by Andrii Kuzmenko

Poti Sea Port Corp. – an APM Terminals company

Gateway to The Caucasus and Central Asia

Statistics

3

2004 2005 2006 2007 2008 2009 2010 2011 2012

6,124 6,127 6,6867,734 8,082

6,0817,292 7,163 7,456

Export17%

Import37%

Transit46%

Break bulk10%

Bulk36%

Liquid16%

Containers27%

Ro-Ro&Ferry11%

Cargo composition(2011)

‘000 tons

4

● Water area – 65.34 ha;

● Length of approach channel – 1.6 km;

● Length of breakwater – 1.8 km;

● Operating area – 30.0 ha;

● Present capacity – 9 million ton;

● After CAPEX capacity – 16-19 million ton;

● Total length of berth’s – 2.9 km;

● Total length of railway - 17.0 km;

● Direct access to hinterland ways;

● 100 hectare of port development area.

● 250 ha of free industrial zone nearby.

● Abundant and skilled workforce

APM Terminals acquired 80% ofPoti Sea Port Corporation in May 2011

No depth inside (6-10 m) or on approach (12,5)

No turning circle inside (max LOA 160 m)

No long berths (150-250 m max)

No land beyond the quaywall (60-150 m max)

Present Poti: first look

Capacity – 8-9 mio mt PA with little reserves

Modern port requirementsRegional port Present Poti International port

Turning circle diameter, m 550 200 700

LOA at berths, m 230-270 170-200 310-330

Depth at berth, m 13,5 6,0-12,5 16,0

Depth at approach channel, m 14,5 12,5? 17,0

Land beyond quaywall, m 250-300 m 60-150 m 500 m

Rail connection upto 30 mio 25 mio? upto 40-50 mio

Road connection simplified restricted unrestricted

Conclusions:

1. Within current boundaries, Poti risks to stagnate.

2. However, thanks to the rail capacity, Poti does have future

3. To remain the major regional port, complete port overhaul is needed, creating at least panamax capacity on the nautical and land-side.

Guesstimate of hinterland traffic forecast after 2020Major commodities Volume, mio mt Relevant capacity Notes

Crude oil 9,7 12,0 Export

Oil products 1,5 2,0 In and out

Containers 5,8 (1 mio TEU) 7,0 (1,2 mio) Domestic and transit

Non-food bulk 4,2 5,0 Coal, ore, cement, fertilizers

Food bulk 2,5 3,0 Grain, sugar, etc

Gencargo 2,8 3,5 Including reefer cargo

Rolling stock 0,6 0,8 Trucks, wagons and cars

TOTAL 27,1 33,3

Conclusions:

1. Above volumes do justify development of specialized terminals.2. Specialized terminals will allow for highest efficiency within limited area thus

reducing the investments and payback period.

What would it take to handle?Liquid bulk Bulk Bulk

foodGC+roro+

contCont. Cold

storeFertilizers

Berth # D1 D2 D3 D4 D5 D6 10 12

Expected vessel DW, mt

150 000 80 000 60 000-80 000

50 000-60 000

60 000 80 000 15 60-70

Berth length, m 300(see 1)

300 300(see 2)

280 250(see 3)

280 200 270

Capacity per berth, mio mt

8,0 4,5 2,3 2 3,2 5,0 0,2 1,5

Estimated terminal area, sq.ms (see 4)

130 000 170 000 153 000 112 000 95 000 16 800(see 6)

52 100

Desirable terminal area sq.ms (see 5)

155 000 200 000 159 000 134 000 135 200(see 7)

10 000 82 000

Required installed capacity – 26,7 mio mt

Ideal Poti: how could it lookNew approach

channel -17 m +2000 m

New terminals

ICT

Breakwater extension

+500 m

-16 mdredging

New breakwater

+ 360 m

-13,5 mdredging

Old port area

ICT external access road

Berth D1Oil

DW 150 000300x50x16

Berth D3Oil/Bulk

DW 80 000270x46x13

Berth D6 ContainersDW 80 000270x32x13

Cold store0,2 mio

17 000 m2Berth 12 Fertilizers

DW 70 000210x32x12,5

Fertilizers 1,5 mio

52 000 m2

Berth D2 Oil/Bulk

DW 80 000270x46x13

Berth D4Food bulk

DW 60 000200x32x13

Berth D5 Containers/

GC/ro-roDW 80 000230x46x13

Containers/GC/ro-ro3,2 mio

112 000 m2

Bulk2,3 mio

170 000 m2

Liquid bulk12,5 mio

130 000 m2

Containers5,0 mio

95 000 m2

325 mquaywall13,5 m

805 mquaywall13,5 m

D 3/4 212 mquaywall13,5 m

980 mquaywall13,5 m

Food bulk2,0 mio

15 300 m2

Poti NG look: berths & terminals

Poti NG: pros and cons of the proposed layoutPros Cons

Suggests minimum possible terminals/berth construction for a given cargo base

Subject to expansion to the non-available areas

Keeps minimal internal basin area Requires rehabilitation of the breakwater to allow 16 m dredging within

Focuses deep-water dredging next to port entrance, thus minimizing the cost

Seemingly tight on land available for terminals to reach required capacities, will require a deeper study and further prioritization/optimization of terminals borders and available land.

Wherever possible allows for overlaps of the vessels on adjacent berths

Some old berths may be out of operations due to navigational or operational constraints (lack of storage space)

Utilizes available basin and berths layout to the maximum possible

Calls for major investments commitment

Keeps old harbor for coastal trade, not wasting money on its rehab as no storage space available anyway

Has certain extra reserves of old berths to assist neighboring terminals or to handle some opportunity cargo

Utilizes all land available (main bottleneck)

Keeps open bulk handling away of residential areas

Utilizes ICT resources for container terminal

Significant investments a

re

required

Poti NG: how much could it cost?Liquid bulk Bulk Bulk

foodGC+roro

+contCont. Idle GEO

navyTotal

Berth # D1 D2 D3 D4 D5 D6 D0 D3/4

Berth length, m 300 300 300 280 250 280 185 270

Est. quaywall, mio USD(60 000 USD/r.m.)

1,2(piles)

18 18 16,8 15,0 16,8 11,1 16,2 113,1

Est. reclamation, mio m3

0 0,81 0,9 0 0 0 0 0

Est. reclamation, mio USD (8 USD/m3)

0 6,5(0,8 mio m3)

7,2(0,9 mio m3)

0 0 0 0 0 13,7

Est. dredging volume,mio m3

1,5(-16m)

2,5(-13,5 m)

Est. dredging, mio USD (8 USD/m3)

12,0 20 32,0

Breakwater extension, mio USD (85 000 USD/r.m.)

73,1(860 m total)

73,1

Approach channel, mio USD (8 USD/m3)

11,2(1,4 mio m3: 160 m wide with 2x42 ms slopes )

11,2

Est. total for marine infrastructure, mio USD

243,1

Total new quay wall: 2165 m. Total dredging: 3,7 mio m3. Total reclamation: 1,7 mio cu.ms.

Is it feasible?

While catering for:

1. Bigger ships2. Bigger/on-dock CY.3. Good productivity

4. Blocktrain container service

Something more realistic is required

Realistic approach: berth 12 and ICT

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• Construction starts in 2013;

• Construction to be completed: end of 2014;

• Planned length – 285 m;

Poti: realistic approach #1Reconstruction of berth 12

• Planned depth – 13.4 m;

• 3 X LHC 550 LIEBHERR harbor cranes;

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• Construction starts in 2013;

• Construction to be completed: end of 2014;

• Planned length – 270 m;

• Planned depth – 12.5 m;

• 3xMHC

Poti: realistic approach #2Reconstruction of berth 12

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Poti: nautical considerations

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Poti: nautical considerations

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ICT parameters

● Distance – 1,7 km

● Available square - 10 ha;

● Expansion in 2013 – 9 ha;

● Bonded road

● Public road;

● Rail link for full train;

● Direct access to hinterland ways;

● 100 ha of development area.

Poti: realistic approachExpansion and connection of ICT

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• To be completed in March 2014;• Planned area – 10.37 ha;• New rail line – 975m;• Customs road – 1688.2 m• Public road – 1700 m• Parking Area – 5000 m² • Full train handling

Background1. Poti had never had a proper container yard due to lack of storage space in the port2. That led to the usage of the external off-docks with negative effect on traffic and safety3. Now 12 ha of container yard will be added which is equal to the 40% of the whole existing port area (29.7 ha)4. Equipped with modern machinery it will ensure safe and efficient operation 5. New bonded road for port transport, public road and rail connection will be built.

Poti: realistic approachExpansion and connection of ICT

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Poti: realistic approachICT and future berth compatibility

Realistic approach: new gate, berth 15, new cranes, reefer racks

Berth 14Multipurpose terminal

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● Length – 253 m;

● Depth – 8.4 m;

● Storage area – 13 200 sq. m;

● Equipment – 2 LHM (100 ton each);

● Handling capacity – 250 000 TEU/year;

Berth 7Container terminal

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● Berth 7;

● Length – 221 m;

● Depth – 8.2 m;

● Storage area – 16 300 sq. m;

● Equipment – 3 portal crane (40 ton each);

● Handling capacity – 200 000 TEU/year;

Inland Container Terminal(ICT)

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● Total area – 8.97 ha;

● Car parking – 654 slots (15 500 sq.m);

● Stripping area – 240 TEU (12 900 sq.m);

● Empty storage – 1700 TEU (5 high, 18 880 sq.m);

● Full storage – 432 TEU (3 high, 15 630 sq.m);

Main points:

1. Complete overhaul of the old port requires enormous investments2. Commercial reality does not support reasonable payback

3. Nevertheless, port’s key problems must be attended4. Thus focused investments and improvements are required 5. All of above shall be based on the regional growth picture

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