Developers push a grand plan for a Pechenga Bay port

But the effort to build a major port at Liinakhamari has not yet won the support of Russian President Vladimir Putin.

By Atle Staalesen, The Independent Barents Observer - February 20, 2020
The harbor at Liinakhamari could house a major new Russian Arctic port — if its promoters can get the government backing they need. (Fastboy / CC BY-SA 3.0 via Wikimedia Commons)

Backers of an ambitious plan for a Russian Arctic port at Liinakhamari near the Norwegian border say the infrastructure could be in place in just a few years.

Pechenga Bay, located only few kilometers from the border to Norway and Finland has long been considered a strategically highly important spot in the Russian North.

However, since Soviet times, there has been little activity in the deep and ice-free fjord, either by commercial shippers or by the military. Only aquaculture developers have been active there.

That silence of the Pechenga waters could soon come to an end. At least if the Liinakhamari Port Company succeeds with its grand development plans in the area.

In this week’s Arktika-2020 conference in Moscow, representatives of the company maintained that a major new port complex will stand ready on site by mid-2024. In the course of 2020, a project memorandum of understanding will be signed and approved along with other necessary project documentation. At the same time, engineering preparations will be started, Project Manager Yevegeny Sychev told PortNews.

The proposed new Liinakhamari Port will include a container terminal with capacity to handle 500,000 TEU per year, aimed primarily on transit goods, as well as facilities for reloading of up to a million tons of various supply goods, Sychev said.

Free Trade Zone 

The Liinakhamari Port Company was established in August 2019, at the same time as regional Governor Andrey Chibis prepared his major flagship project on the development of a free trade zone in the Kola Peninsula. The company has a shareholder capital of 50 million rubles and is registered in Moscow, company information shows.

The plans for Liinakhamari build on several previous projects. Ever since the early 1990s there has been plans for a major seaport development in the area. Until recently, a group of developers have worked with plans for a 34 million tons capacity seaport on site. Investments would total 113.6 billion rubles and the number of new jobs would amount to 10,000.

Among the proponents of the project has been Mikhail Shmakov, who early last year approached President Vladimir Putin with a request for support.

Militarized area

According to newspaper Kommersant, investors from China, as well as Oman and South Korea, have expressed interest in the project.

The Liinakhamari initiative has however not yet won the support of the president. According to the newspaper, the Russian Security Council and its Secretary Nikolay Patrushev has warned against the project because of its close vicinity to the national border and troublesome security implications.

It is too close to the border, Patrushev says in a comment to the Kremlin.

He also underlines that the project is still only on a concept level and that there has not been made any evaluation of economic aspects and needed investments. Furthermore, none of the major companies operating in the Arctic, like Novatek, Rosneft, Gazprom Neft and Gazprom, have expressed any interest, Patrushev argues.

In addition, the Northern Fleet is actively operating in the Pechenga Bay and adjacent waters, the Security Council secretary underlines.

Competition with Kirkenes

The lack of interest in the Kremlin has not made Shmakov and his associated give up their plans. We will keep on working with the project, he says to Kommersant.

project presentation paints a picture of a major facility that “will be able to compete with seaports in the USA, Europe and Southeast Asia.” It will be the only Arctic port that can handle ships with a deadweight up to 300,000 tons, it reads. Included in the plan is the building of a railway that will connect with the nearby line between Nikel and Murmansk.

If the Liinakhamari port is built, it would be a major slap in the face of nearby Norwegian town Kirkenes where similar plans are on the table. The Kirkenes developers eye the building of a new major seaport connected by railway to the Finnish town of Rovaniemi.

Powerful history

The Pechenga Bay is deep and does not freeze in winter. When the area belonged to Finland in the inter-war period, there was hectic activity in the port of Liinakhamari as Finnish industry in the area used the fjord for export of ores from the nearby rich nickel mines.

During the war, Nazi occupiers built large fortification facilities in the fjord and depended on those same terminal facilities in Liinakhamari for nickel shipments to war factories in Germany.

When the Soviet Union annexed the area after World War II, the fjord was used by the Northern Fleet, which established a submarine base on site. Later, Liinakhamari housed a fleet of Coast Guard vessels.