Russia wants to upgrade the port of Makhachkala

Russia plans to develop the infrastructure of the port of Makhachkala to transform the Dagestani capital in a logistic hub in the Caspian Sea and the Caucasus region and boost the socio-economic development.  Moscow’s desire to upgrade Makhachkala’s seaport and airport challenges the city of Baku and the Azerbaijani aim to become the Caspian interconnection.

Last week the First Deputy Minister of Economic Development of the Russian Federation, Mikhail Babich, visited the city of Makhachkala to discuss with local authorities the possibilities of enhancing the activities of the only ice-free port of Russia in the Caspian Sea. According to Babich, the task of the Ministry of Economic Development of the Russian Federation is to understand which are the necessary steps to attract additional volumes of oil, grain, and fish and improve the Dagestani economy.

According to the General Director of the Makhachkala Sea Trade Port Murad Khidirov, the port can receive oil tankers with a carrying capacity of 13 thousand tons but, because of the insufficiency depth of canals, the ships can transport only 8.5 thousand tons. The port of Makhachkala needs to be upgraded through dredging operations that will increase the volume of oil and oil products transhipment by 2 million tons annually without creating additional capacities. Moreover, the head of Dagestan, Vladimir Vasilyev, stressed that dredging should not be very costly and they will partially financially supported by the sale of sand that will rise from the bottom.

The volume of cargo transhipment in the Makhachkala Sea Commercial Port for the first six months of this year increased by 20.4% compared to the corresponding period of 2019.

The map shows how the Caspian Sea is divided among Russia, Azerbaijan, Iran, Kazakhstan, and Uzbekistan and the location of oil and natural gas fields and pipelines. (Source: Geopolitical Intelligence Services)

Why this matters? Because the Makhachkala Sea Commercial Port is the only non-freezing and deep-water port of Russia in the Caspian Sea which accepts ships up to 150 meters in length and up to 4.5 meters draft. The port infrastructure includes a dry cargo harbour with a transhipment complex with a capacity of 3 million tons per year, berths for general, bulk cargo and containers with a capacity of up to 1.2 million tons per year, railway and car ferry terminals with a capacity of 1.3 million tons, a grain terminal with a capacity of 0.5 million tons per year.

According to the Russian socioeconomic strategy in the North Caucasus, Makhachkala will become a logistic hub in the Caspian Sea able to connect the Russian Federation with Iran (recently Moscow and Tehran have improved their bilateral relations and cooperation agreements in different fields. Read more: Iran enhances scientific cooperation with Russia), the Central Asian republics,  and the Belt and Road Initiative. The rise of Makhachkala threatens the near city of Baku, the capital of the Republic of Azerbaijan, where the local authorities have invested huge amounts of financial funds to develop the city port and the local infrastructures to transform Baku and entire Azerbaijan in the Eurasian logistic hub.

Furthermore, the Caspian Sea is the epicentre of several energy pipelines and projects which link Central Asian and Caucasian oil and gas fields to Europe. In the face of EU – Russia confrontation and the EU Energy Security Strategy to decrease Brussels’ dependence on Russian energy exports, if the Russian Federation will be able to improve the activities and centrality of the port of Makhachkala overshadowing the near Azerbaijan,  the impact on Brussels-Moscow relations and energy market will be noticeable in favour of the Kremlin.