February 20, 2013 / 8:57 AM / 5 years ago

Railway logjam hits Russia Far East oil product exports

* Railway says halted 34 trans to Vanino

* Experts say Russia needs investments into infrastructure

MOSCOW, Feb 20 (Reuters) - Hundreds of rail cars loaded with oil products have been blocked for days on their way to Russia’s Pacific port of Vanino due to bad weather and traffic bottlenecks, highlighting the need for investment in the country’s creaking infrastructure.

Industry officials and experts have long been complaining about the high costs of state-controlled transport, saying years of underinvestment were taking a toll on shipping and rail links, which span thousands of kilometres across the world’s largest state.

According to the government’s estimates, Russia will need to invest $1 trillion, almost a half of its gross domestic product, into infrastructure by 2020.

Andrey Rumyantsev, a spokesman for oil producer Alliance which operates the Khabarovsk refinery in Russia’s far east, told Reuters on Wednesday that some 260 Vanino-bound rail cars carrying naphtha and fuel oil had been held up for several days.

A spokeswoman for Russian Railways said the operator had halted 34 trains bound for the Pacific ports due to “poor technical equipment of cargo off-takers”.

According to Russian Railways’ statistics, the country’s far eastern ports, such as Vanino, Nakhodka and Slavyanka, saw oil product exports fall by 16.3 percent to 518,940 tonnes in January from December.

Last year, refined product exports from the Transbunker Vanino terminal, a part of the port, amounted to 2.8 million tonnes.

The logjam is exacerbated by the necessity to de-frost coal, which arrives by rail to the port.

According to the administration of Vanino port, the shipping traffic can only be unblocked using the "Krasin" icebreaker. r.reuters.com/gud26t

A spokesman for Vanino port said the weather remained unfavourable, with traffic at the port hampered by thick ice.

“The weather is not enjoyable. And the wind is blowing at the wrong side, to the shore,” Zakir Vagapov said. (Reporting by Vladimir Soldatkin; Editing by Mark Potter)

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