Manych Ship Canal - History - 21st Century

21st Century

The Volga-Don Shipping Canal no longer meets present needs of carriers of countries of the Caspian region and completion of construction of the Manych Ship Canal would favour further growth of cargo traffic between the Caspian and Azov-Black Sea basins. Economic development of southern Russia requires completion of the Canal. Construction of additional processing capacity for oil and gas fields on the Russian Caspian territory will produce 15 million tons of cargo per year by 2020. Processed oil products will reach 25 million tons annually if Kazakhstan, Azerbaijan and Turkmenistan processing capacities expand as planned. That amount could be carried to Western Europe by waterways rather than by railway. Oil from the Caspian shelf oilfield could be directly transported by tankers to processing capacities of Lukoil and Kazmunaigaz on the Black Sea shore without trans-shipments. Modernization of the existing "Volga-Don" navigation canal can meet only the requirements of Russian companies. In the absence of improved Russian transportation routes by 2020, alternative transport corridors may be constructed through Azerbaijan to the Georgian seaports in the Black Sea or through Iran to the Persian Gulf. The Manych Ship Canal could be a Russian route satisfying all requirements of the economically developing Caspian countries. Russia may be unable to provide competitive cargo tariffs without the Manych Ship Canal, and may lose a considerable part of profits from the transit of cargo of expanding economies in the Caspian region. Construction of the Canal can become a key factor of formation of industrial clusters adjacent to the shipping route within the republics of Kalmykia and Dagestan, the territories of Stavropol and Krasnodar Krai, and the Rostov and Astrakhan regions of southern Russia. Construction of the Manych Ship Canal will link the Caspian and Azov Seas and provide an outlet to world oceans for southern Russia, Kazakhstan, Turkmenistan, Azerbaijan and northern Iran. the canal would be an important factor for the development of the whole Southern Federal District.