Russia Resumes LPG Exports via Kerch Port Despite Security Concerns

In a noteworthy move, Russian producers of liquefied petroleum gas (LPG) have reinstated regular exports of propane and butane through the port of Kerch in Crimea, ending an eight-year hiatus, industry sources have revealed. This decision comes despite lingering security threats and challenges.

Regular LPG exports from Kerch had been halted in 2015 following broader international sanctions against Russian companies and producers in response to Moscow’s annexation of Crimea in 2014.

The resumption of these exports underscores Russia’s ability to navigate international sanctions and sustain its sea-borne energy exports. According to sources who requested anonymity, the flow of LPG supplies from Russian plants to Kerch for further exports recommenced in the second half of June.

These supplies are currently being transported via railways to the port of Kavkaz in the Azov Sea, and from there, they travel by ferry to Kerch. This route is chosen because LPG transportation across the Crimean Bridge is prohibited.

The 12-mile (19 km) road and rail bridge, inaugurated by President Vladimir Putin in 2018, suffered an attack in October 2022, which Russia attributed to Ukraine. The bridge connects the Kerch Strait, linking the Black Sea with the smaller Azov Sea.

It’s worth noting that LPG, primarily used as a fuel for vehicles, heating, and the production of petrochemicals, has remained exempt from sweeping Western sanctions. However, Russian firms under sanctions have redirected significant LPG volumes away from Europe to the east, primarily to China, and to Russia’s Black Sea terminals for further exports to Turkey, Northern Africa, and the Balkan countries.

Traders have reported sporadic supplies of LPG from Kerch by tankers during the spring, while exports, primarily to Turkey, have become regular. According to traders, approximately 6,000 metric tons of LPG were supplied to Kerch from September 1-20. In July and August, deliveries totaled 5,800 tons.

Despite security concerns and limited tanker availability, supplies through Kerch and Russia’s southern ports remain attractive due to lower pricing. Russian LPG exports surged by 10 percent in the first half of the year compared to the same period in 2022, reaching 1.911 million tons, with seaports accounting for about a third of total overseas supplies. Notably, 34 percent of Russian LPG exports were directed to Poland, 10 percent to Latvia, 6 percent to China, and 5 percent to Afghanistan.