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Railway Jam Prevents Oil Products Reaching Russia's Eastern Ports

The Russian government has been given a sharp reminder of the necessity to invest heavily in the nation’s tired infrastructure, especially if it intends to increase exports to Asia, after hundreds of rail cars carrying fossil fuels have been blocked for several days on their way to the Pacific port of Vanino.

The cargo has hit the jam due to poor infrastructure which is struggling to cope with the volume of traffic during periods of unfavourable weather.

Andrey Rumyantsev, a spokesman for Alliance, the operator of the Khabarovsk refinery in Russia’s far east, told Reuters that around 260 rail cars bound for the port of Vanino with their cargoes of naphtha and fuel oil had been stuck for several days as off-loaders at the port had to break apart and defrost coal which had also arrived by rail.

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As the bad weather continues, with wind blowing in from the sea, the flow of traffic in the port is not expected to increase much as it remains hampered by thick ice.

Industry officials have been lobbying for improvements to be made to the state-controlled transport system, and complaining of the high costs they incur whilst transporting fossil fuels across thousands of kilometres via the inefficient rail network.

The Russian government has estimated that in order to make repairs and improvements it will need to spend around $1 trillion by 2020.

By. Charles Kennedy of Oilprice.com



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