Novorossiysk is a major Russian oil transshipment port in the Black Sea

Novorossiysk Commercial Sea Port Group (NCSP), a Russian port operator, has announced the acquisition of "additional land plots" for construction of a fuel oil terminal with four million tonnes per year capacity.

According to a statement issued via the London Stock Exchange this week, the North-Caucasus Rail Road, a branch of OAO Russian Railways, and Novorossiysk Fuel Oil Terminal LLC, the project operator 50% owned by PJSC NCSP, signed the agreement on May 21.

It will give Novorossiysk Fuel Oil Terminal LLC the rights of usage and ownership of the land plots, located within the cargo yard of the Novorossiysk train station, for deploying and operating the fuel oil terminal for a term of over 40 years.

Commenting on the signature on the agreement, PJSC NCSP Chairman of the Board Alexander Ponomarenko said construction of the fuel oil terminal "is one of the top priority projects for NCSP Group," which signed the general contract and started land development works to prepare for construction in April this year.

"As of today Novorossiysk Fuel Oil Terminal LLC is in possession of sufficient land to deploy all elements of the new terminal's infrastructure. The general contractor starts the ground-work cycle on major construction sites in the nearest future, which allows us to say that this massive project has entered into active investment phase," Ponomarenko said.

Total investments in the project are estimated at 5 billion rubles ($163 million), to be financed on a par basis by the Novorossiysk Fuel Oil Terminal LLC and the other founding partner.

The fuel oil terminal project envisages the construction of a tank farm with 82,000 cubic meters capacity, two railway discharge areas, as well as pipelines and other units of infrastructure.

To facilitate loading of oil products from the terminal to tanker ships PJSC NCSP is reconstructing and modernising liquid cargo berths at Pier #4.

"Implementation of state of the art technologies for rail-to-tank and tank-to-ship transshipment and storage of fuel oil precludes any possibility of the oil's watering and guarantees the highest level of environmental and industrial safety," the statement said.