Novorossiysk Shipyard may become shiprepair base

The yard, part of Russia’s largest sea port, would service the national Black Sea Fleet and some commercial ships. The plans are in accord with a recent order of President Vladimir Putin, and will initially focus on warship and submarine repair, with various merchant ship types at a later date.

Russia currently has a severe shortage of ship repair facilities, with only two – the 5th Shipyard in Temryuk and Tuapse Shipyard – on the Black Sea coast, both of which are outdated in need of modernisation.

As part of USC’s plans, the Novorossiysk Shipyard site, with total area of around 30 hectares, and which is mostly used for trans-shipment of metal cargo at present, will be re-equipped for ship repair, hopefully returning the Novorossiysk Shipyard to profit.

The Russian government supports the new yard which will significantly improve the domestic shiprepair industry, particularly in the merchant sector, which currently relies on foreign repair yards. Official estimates say that up to 80% of Russian commercial ships are currently built and repaired abroad, which, according to Mr Putin, is unacceptable. The situation with repair of warships is much better.

The project could be thwarted because the current owners of Novorossiysk Sea Port and Novorossiysk Shipyard, Russian financial conglomerate Summa Group and Transneft, a Russian state-controlled business responsible for national oil pipelines, have no plans to sign an agreement with USC (which owns a 30% stake in the shipyard) about its reorientation. The current cargo operations contribute 90% of the yard’s revenue, and the owners could still block USC’s initiative. USC plans to start negotiations to buy the Transneft and Summa Group stakes in the yard, possibly in the next few weeks.

Russian analysts believe that, despite the unwillingness of both Transneft and Summa Group to sell its stakes in the Novorossiysk Shipyard, the deal may be closed by the end of the current year. The project is expected to receive full support from the Russian government, which earlier this year declared the development of civil shipbuilding and repair as one of the most important state goals for the future.