The 4-Year Long Project

Four years of planning, engineering and execution. Construction of a custom-built jetty to handle weights up to 2,000 tons. A multinational team of engineers and logistics experts to execute all of these transports in the most demanding time frame. Our today’s story is about deugro’s logistics solution in one of the most complex and challenging environments.

The Destination

Russia. A territory almost twice the size of the United States, or four times as big as the European Union. A huge country with far-from-ordinary challenges and mega-projects requiring logistics solutions that are both complex and unique.

For countries around the world, infrastructure is both an asset and a liability: an asset because it is the basis of all economic activity; a liability because it must be maintained, updated, modernized and expanded. This is no different in Russia, but infrastructure here is also subject to a number of additional challenges, such as the nation’s sheer geographical size as the world’s largest country and temperature variations in some regions of up to 60 °C between summer and wintertime.

The Project

In May 2009, Tatarstan President Rustam Minnikhanov visited Japan and signed a memorandum of intent to construct a methanol, urea and ammonia production plant. Next year, Ammoni awarded the engineering, procurement and construction (EPC) contracts for the plant, establishing a new fertilizer complex in the town of Mendeleevsk. The contract was awarded at the Asia-Pacific Economic Cooperation (APEC) summit in Tokyo.

The integrated fertilizer complex will produce ammonia, granulated urea and methanol using natural gas as feedstock. It became one of the world’s largest plants to simultaneously produce methanol and ammonia and is the largest project of this kind in Russia in the past 20 years. The complex is being built in response to Russia’s plans to improve its agricultural and industrial developments. The rise in food production necessitated by a growing global population will increase the demand for fertilizers.

The works were performed in 2011-2013 by deugro under the Contract concluded with support of the Russian Federation Government and the Republic of Tatarstan Government between Ammoni and a consortium of Mitsubishi Heavy Industries, the Sojitz Corporation and China National Chemical Engineering (CNCEC).

Mitsubishi Heavy Industries was leading the consortium and was responsible for the overall construction of the plant. Sojitz undertook all of the logistics requirements and transport coordination for the project within Russia. The Chinese CNCEC was responsible for the construction of the plant.

The natural gas feedstock for the Tatarstan complex will be supplied by ZAO Tatgazinvest, a subsidiary of Gazprom. Annually, the company will supply about 800 million cubic meters of gas for fertilizer and methanol production. The plant became operational in 2015. The cost of construction is estimated to exceed USD 1.6 billion. The payback period for the project will be about seven years.

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The Team

deugro Moscow / Has its own transport and engineering resources and was responsible for jetty construction, cargo operation and all inland transportation to site, as well as client consultancy services for customs issues.

deugro Japan / Responsible for the offshore shipping scope to the logistics hub in Antwerp and contracting party of MHI for jetty construction.

Dachser Germany / Responsible for the overall transportation contract with the Sojitz Corporation, direct truck transport from Antwerp to the job site, rail transport and sea freight from Antwerp to Ust-Luga, including all Russian port operations.

deugro Germany / The communications and coordination hub between the teams in Russia, Japan and Germany.

The Concept

Starting in 2010, deugro Moscow conducted its first studies, aiming to create a technically sound and commercially feasible logistics solution. Given the expected weights of up to 500 tons and dimensions of up to 70 meters, we had to think completely outside the box. It was obvious that we would have to get as close as possible to the final site destination through the Russian river system. Because the Kama river water levels had extreme seasonal variation, barge transport and Ro-Ro operations would not be feasible. We therefore developed the concept of a permanent jetty construction to ensure safe unloading from river sea vessels throughout the navigation period, generally limited to May to October of each year. According to this plan, a jetty for two powerful crawler cranes (Demag CC-2600 with the lifting capacity of 600 tons and a 750-ton Liebherr LR-1750) was designed and built on the Kama river right bank in the shortest amount of time.

The deugro experts developed a general concept of transporting general, abnormal-sized (up to 60 meters long and more than 7 meters in diameter), and heavy loads (up to 500 tons). Also the following efforts were taken: engineering and construction of infrastructure in Tatarstan to ensure smooth transport, development of technical documentation on reloading and transport technology, obtainment of required approvals of all concerned parties (owners of motor roads, man-made structures and service lines, land plots), GIBDD (State Traffic Safety Inspectorate), etc.

Furthermore, this project included the range of services to prepare the route and arrange the transportation itself, namely:
– selection and approval of the haulage route, development of specifications to prepare the highway for the carriage in compliance with all requirements to heavy and oversize freight;
– conduction of necessary surveys and development of design documentation, in accordance with which temporary bypasses of three bridges were built, motor road repaired, more than 60 overhead communication and power lines reconstructed, gas and heat pipelines crossing the shipment route – rearranged;
– working out of transport measures approved by GIBDD of the Republic of Tatarstan, and haul rigs timetable indicating the route sections to be temporarily closed with consideration of public transport schedule and working hours of Elabuga businesses.

Road transport from jetty to site required partial passage through a National Reserve Park. Environmental studies, which required close cooperation with local and state authorities for final permit approval, were carried out accordingly. In order to consolidate all cargoes from worldwide origins for final shipment into Russia, the deugro team was looking for the ideal hub in Europe. The Antwerp port was chosen because almost all major liner services and parcel operators from Asia and other origins call at this port, thus avoiding extra costs for minimum inducement. Moreover, the facilities would provide all necessary crane and handling equipment.

The Scope

Arrangement of logistics from different suppliers (mainly from the Far East and Europe) to Tatarstan was awarded to the newly established Dachser-deugro tandem, reinforced with Watson Global Logistics for coordination of transit cargo in Antwerp. Zuidnatie terminal was selected for transhipment and handling of loads.

The overall scope consisted of ocean freight to Antwerp, interim storage and respective consolidation for on-carriage to the job site in Tatarstan, involving all types of cargo, from container to overdimensional cargo, and heavy lifts up to 462 tons. Various modes of transport were used, including ocean freight, air freight, road, rail and river sea vessel transport.

Starting from November 2011 until May 2014, the cargoes arriving at Antwerp by sea, railway or trucks were given intermediate storage in Zuidnatie and progressively sent to Tatarstan whenever a batch was ready. The shipment passed through the Port of Ust-Luga and along the inland waterways by vessels of Volgo-Balt and Rusich types.

– Total of 154 heavy lifts
– Investment in jetty construction, route improvements and infrastructure: USD 15.5 million
– deugro and Dachser moved a total volume of 110,000 FRT

Most of design and transport preparations were accomplished by deugro’s own efforts. Subcontractors were involved to carry out the main scope of engineering, construction and transport activities.

In particular, in July 2013, Mammoet Rus was participating in moving 110 items of process equipment from the river jetty in Elabuga to Ammoni site. The whole equipment lot was split for six ships. The average duration of vessel’s discharging and delivery of cargo units to site, considering that the crawler cranes were busy with the plant construction, was about six days, i.e. four items per day on average. Equipment used: crawler crane Demag CC-2600, seven haulage trucks Mercedes Benz, 42 Goldhofer axle lines, three Noteboom semi-trailers.

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Key milestones
– Project request for information: Winter 2010
– Evaluation and construction: 2011 – first transports on road in November 2011
– First shipment to jetty in 2012
– Six shipments to jetty in summer 2013: 30,000 FRT, heaviest piece 462 tons
– Final transports of equipment in the middle of 2015

The Challenges

Several site inspections and route surveys were necessary to evaluate an ideal location for a material offloading jetty. The company surveyed more than 200 kilometers of the Kama riverside and more than 500 kilometers of the road network in the area nearby plant construction, scouted six locations, and finally decided on Elabuga. At the time, Elabuga had the best connection to the backcountry and the distance to the final job site was only 38 kilometers. Elabuga is located next to a nature reserve, so it was deugro’s responsibility to not only design a jetty, but also to ensure it would preserve the nature surrounding the port area.

Because everyone involved in the project was highly experienced and talented, deugro was able to achieve this ambitious goal without any significant further issues. The company’s engineers designed the jetty in cooperation with local experts and construction began in January 2012.

All this ensured high level of jetty and motor road readiness to proceed with transportation as well as provided for its successful completion. Just so, in 2013 the jetty in Elabuga accommodated eight motor vessels during 1.5 months with 122 oversize pieces of cargo transported. Total weight reached 8,842 tons with the maximum unit weight – 430 tons. Keystone Logistics was responsible for river shipment.

Obstacles to Overcome

The continental weather in Russia implied another obstacle to overcome: river sea vessels have a limited navigation period (mainly from May to October), depending on the weather and ice conditions. Deugro had to unload six vessels in 2013 during this time period.

Furthermore, the company faced the challenge of having to construct the jetty within a national park. This effort required extensive negotiations with local authorities.

The on-carriage of goods was likewise complicated with regards to the technical demands. As known, Russian infrastructure allows warm water pipes to be above ground. However, when these pipes intersect with a road, they create an overhead obstacle. Therefore the pipes had to be disassembled for the period of transport, but reassembled in time for the arrival of cold weather – a strict deadline, dated middle of August, was imposed by the authorities. Again, the company was acting under pressure, with the knowledge that all of Elabuga would be without access to hot water in the cold autumn and winter months if it would be unable to achieve the ambitious goal of unloading six ships in six weeks. But with excellent cooperation between deugro teams in Russia and the local authorities, they were able to achieve this goal six days earlier than expected.

The Execution

Thorough preparation of transports, well-coordinated teamwork of all deugro subdivisions with the consignee and Elabuga municipal services, close cooperation with the GIBDD of Tatarstan which was invaluably helpful in arrangement of transport and provided for high-professional convoying of haul rigs – all these efforts allowed the most complicated transport task to be fulfilled as soon as practically possible and the equipment to reach Ammoni site as per the construction schedule.

Not a single emergency or accident were recorded in the course of handling and transport activities, as the matter of work safety is always a priority for deugro. Compliance with safety regulations is given particular attention starting from engineering and planning stages in regard to transportation.

More than 100,000 freight tons of various cargoes were delivered by deugro to Mendeleevsk by motor and rail transport from different ports of Europe and Russia.