Sibur, Russia’s largest producer and exporter of liquefied petroleum gas (LPG), resumed LPG shipments through the Black Sea port of Taman in February after a break since March 2019 amid rising efficiency of the route, three market sources said.

Export netbacks – the sale price minus the costs associated with getting the product to market – for LPG shipments through Taman doubled compared to rail exports to Poland and 6-7 times better compared to supplies to Russia’s domestic market due rising FOB quotations in Black Sea ports in recent weeks.

Early in February Sibur has send by rail from Tobolsk to Taman some 6,900 tonnes of LPG, while state-owned monopoly Russian Railways (RZD) has agreed to ship up to 7,400 tonnes of LPG via the route this month, the sources said.

In March Sibur plans to ship from Tobolsk to Taman some 19,100 tonnes of LPG, they added.

Sibur will be able to save about $80-$100 per tonne on freight costs, when sending LPG to Turkish ports from Taman compared with Ust-Luga, traders estimates show.

“The freight component is very high, tankers from Ust-Luga to Turkey sail two-three weeks one way, while in the case of shipments from Taman it will be from three to seven days,” one of the traders said.

Sibur didn’t immediately reply to Reuters request for comment.

Sibur increased LPG exports through Ust-Luga in 2022 by 27% compared with 2021 to 746,200 tonnes. The company had to redirect LPG volumes from Scandinavia and northwest Europe to North Africa, Turkey and the Asia-Pacific. Sibur exports LPG directly as well as via ship-to-ship (STS) points in the ARA region and the Estonian port of Paldiski.

In 2022 Sibur send some 112,000 tonnes of LPG from Ust-Luga directly to Turkey, Refinitiv shipping data showed.

LPG supplies to Ust-Luga accounted for about 53% of Sibur’s total exports in 2022, while overland supplies to Poland reached 43%, or 614,000 tonnes.
Source: Reuters (Editing by Louise Heavens)