Zvezda shipyard needs steel mill, but mill also needs other customers - ministry
MOSCOW. Nov 27 (Interfax) - A new steel mill in Russia's Far East is needed to supply the Zvezda shipyard, but further thought needs to be given to additional utilization of the mill's capacity given the dim prospects for exporting steel plate to Asia and limited demand in Primorye, the Industry and Trade Ministry said.
"Considering the low prospects of exporting the products of the planned production facility to countries in the Asia-Pacific region and the limited capacity of metal consumption in the Far East, the issue of additional utilization of the mill to make products for railcar manufacturing, machine building and large-diameter pipe needs further study," the ministry told Interfax.
"Resource support for the production facility and power supplies will be an important challenge. After studying the business plan, the Industry and Trade Ministry will be able to comment on the prospects of the project in greater detail," the ministry said.
Rosneft's decision to build the new steel mill to meet the shipyard's needs seems to make sense "given the remoteness of the Zvezda Shipbuilding Complex from the main producers of ship steel and profiled metal, and difficulties with delivery of sheet by railway through the Eastern area of operations," the ministry said.
Rosneft CEO Igor Sechin said at a meeting with President Vladimir Putin on Wednesday that a decision has been made to build a new steel mill with capacity of 1.5 million tonnes of steel plate and tubular products per year in Russia's Far East for the needs of the Zvezda Shipbuilding Complex. The tentative cost of the project, the feasibility study for which has already been completed, is about $2.2 billion.
Rosneft is part of the consortium building the shipyard and is providing orders for its pilot operation.