China Announces Massive Cross-Border Logistics and Energy Hub Project In Russian Far East
By Chris Devonshire-Ellis
In increasing signs of Chinese Belt & Road Initiative infrastructure projects being directed to Russia, China’s Xuanyuan Group Industrial Development company plans to build a huge energy logistics hub in Russia’s Far Eastern Amur region, close to the Chinese border with Heilongjiang Province.
The hub will be located between the city of Tongjiang in China’s Heilongjiang province and the town of Nizhneleninskoye and is designed to facilitate Russia-China cargo transfers.
Russia-China bilateral freight has doubled over the past twelve months.
The group’s CEO, Hailong Xue, confirmed the project would go ahead after Xuanyuan Group clinched the deal with Russian investors on the sidelines of the recent Far Eastern Economic Forum in Vladivostok. The project will have both Russian and Chinese participation, apparently on a 50-50% equity basis.
Xue stated that “The location of this hub is very important as it will be right between our borders. There is a narrow stretch between our frontiers which makes cargo transfer rather problematic. But, with our project, we estimate that freight transportation will reach 10 million tons annually.”
He expects cargo traffic between Russia and China to increase fourfold in the next few years. The facility is being built close to the Amur River Freight Bridge which opened earlier this year and was co-funded by the Russian Sovereign Wealth Fund and Chinese investment.
A large fuel storage terminal will be part of the project. According to Xue, the agreement envisages the construction of a terminal for storage and transportation of hazardous and non-hazardous goods, such as liquefied natural gas (LNG), liquefied petroleum gas (LPG), aviation fuel, helium, and other technological goods. The estimated cost of the project will be between ¥4.3 to ¥5 billion (₽58 to 72 billion, or US$600 and US$700 million), with the launch of the cargo terminal scheduled for 2027.