Russia approves $1.6bn Caspian seaport to increase trade with Iran, India and China

Russia is planning to build a port on the Caspian Sea near the city of Lagan to increase trade in the Caspian region and beyond.

Plans to build the port have been included in official Russian Federation plans for the region, issued on 29 July.

It will combine a container terminal with facilities for storing and loading a range of agricultural products, including a grain elevator with a storage capacity of 300,000 tonnes. Other terminals will handle vegetables, fruit and cooking oil.  

The grain and container terminals will each have a 5 million tonne capacity, and the liquid cargo terminal will have a capacity of 500,000 tonnes.

Altogether, the port will have a transshipment capacity of 12.5 million tonnes; at present all Russian ports on the Caspian have a capacity of 7.5 million tonnes.

Dredging will also be carried out to deepen the existing port’s seaway to 13m.

Much of the cargo carried on the Caspian is not containerised, so its adoption is seen as a way of increasing Russia’s trade with the Gulf countries and India, via Iran. In the reverse direction, the port may improve communications for Chinese goods bound for Europe.

The port will be built in the relatively underdeveloped Buddhist Republic of Kalmykia that has long lobbied for Russian investment in a seaport. Moscow is now more responsive, owing in part to the silting up of its main Caspian port at Astrakhan, which recently forced the Russian navy to abandon it as a base.

The Kremlin is also considering the possibility of building a ship canal between the Caspian and the Sea of Azov, on the north of the Black Sea to provide a shorter route than the existing Volga-Don Canal.

Vitaly Daginov, general director of the Port of Lagan, said during a press conference in March that the expected cost of the port, together with its road and rail links, was $1.6bn.

A group of Iranian companies have expressed their interest in investing in the Port of Lagan, as well as China’s Poly Group, which specialises in the sale of artworks and defence systems, and China Energy Engineering Group International.

Image: Plans to expand the port have been discussed since 2007 (Port of Lagan)

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