corporate profile | LEV LIMITED
LEV LIMITED RELIABLE BUNKER SUPPLIER
 VASILIY HEILO managing director of Lev Ltd |
Lev Ltd was founded in 1996 for the supply of bunker fuel in the dynamic and fast-developing Azov Sea basin. For the past 12 years a committed team of professionals have enabled the company to succeed in creating a reliable and high quality bunkering service, meeting requirements of the most exacting clients and becoming a leader in the bunkering market of South Russia. Now LEV Ltd is a modern group of companies, providing bunker services also in the Black Sea basin. We talk to Vasiliy Heilo, managing director of Lev Ltd, about developments in the Russian bunkering market.
How do you see the current market developing in the South of Russia?
The total amount of the bunkering fuel sold in the Azov sea basin is almost one million tonnes per year (mmty). By the estimations of experts, it will gradually increase proportionally to match future growth of ships. At the same time, the geographical position of our ports means that the area will never become a bunkering centre, such as Singapore (a market capacity 20 mmty) or Rotterdam (14 mmty); firstly, because of Rostov-on-Don is not a large transit entity, and secondly, the restrictions on the maximum submersion of vessels and the fact that the port is more focused on export. The shipowner has to constantly make decisions regarding what it is economically more favourable: to take cargo or fuel?
What are the main factors influencing the current markets at Azov and Rostov?
Bunkering is an extremely complex business. It includes elements of manufacture, export, navigation, shipbuilding, storage and transportation of mineral oil. The difference between bunkering and working a gas station or other stationary objects is that gas station operations are reasonably predictable, whereas sea plans are often broken by factors such as an environment. For example, a set of unpleasant surprises is brought by winter.
Quite often in our region in January the temperature drops sharply, and ice forms in the Azov basin. Last winter, because of the shortage of ice breakers, vessels were frequently held up several days, and each bunker operation extended by 36 hours. I remember when we bunkered ice breakers for transferring fuel to the vessels, which were captive in ice. Because of a strong wind and ice mooring could be carried using a towing hawser. And of course these factors raised the cost of services. Frost and storms aren’t a rarity in our climate, therefore experience and the high qualifications of the personnel are an important condition for normal work of bunkering companies.
 Lev Limited suply quick, reliable barging services |
How many companies work in this market?
There are a lot of companies, their quantity varies and until recently constantly grew. There are organisations that are focused only on bunkering, and other companies rendering complex vessel services, including supply of fuel, food and potable water, equipment and specialised stock, overalls, documentation, etc. Our company also provides complex ship chandlers services.
Are there mergers or absorption in this market?
There are both mergers, and absorption of small companies by larger players. Basically, none of this is bad; it means that bunker business for large companies provides good opportunities for promotion of own brand, and the realisation of significant volumes.
Last year you began to bunker vessels by black oil. How successful was this innovation?
In Rostov it is hardly profitable because tankers working in black oil do not go to water areas of Don. The majority of black oil is sold in our sea ports Yeysk, Kavkaz and Temruk. Even now, black oil only amounts to sales of 20% of the total as opposed to the 80% represented by diesel fuel. I think that the black oil business will continue for another 10-15 years, and then vessels will begin to use cheaper fuel. Already now there are several enthusiasts who are going to convert the vessels for gas.
 Competition betwen bunker suplies has increased |
Do you plan to develop other directions in bunkering?
This month, I think, we will buy a ship with a capacity of 60 tonnes which will bunker yachts and boats by gasoline and diesel fuel. The need for the floating gas station is now felt in the market. Recently many plans for the construction of stationary refuellings on water were born, but I have calculated that similar projects will be unprofitable because of short navigation. But mobile ships can be profitable because the quantity of yachts that Russians own is growing.
How do you envisage the situation in the South Russian bunker market developing?
Russia is an enormous country and we don’t just have sea ports, but also river ports which are continuously increasing in size and importance. But bunker business on the river has some differences from the same business on the sea – mainly because of longer routes and complicated navigation. However, over time the competition between bunker suppliers has increased. The development of our bunker market essentially differs from the rest of the world; there is the issue of rapprochement regarding the general rules and procedures. It is even more unpredictable regarding economic policy and there are the constant restrictions inherent in our country.
 there is a god prospect to produce significant volumes in the bunker market |
Yeysk
E-mail: azov_tranzit@mail.ru
Tel: + 7 86132 260 02
Temruk/Kavkaz
Email: ubs-ka@mail.ru
Tel: + 7 86148 607 31
Rostov/Azov
E-mail: levltd@ya.ru
Tel: + 7863 263 8002
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