Future Prospects of
the Northern Sea Route
as an International Trade Route
Dr. Bjørn Gunnarsson
Managing Director
Suez Canal Global Conference (Challenges & Opportunities) 22-24 Feb. 2016 - JW Marriott, Cairo, Egypt
The Northern Sea Route (NSR)
Suez Canal Global Conference (Challenges & Opportunities) 22-24 Feb. 2016 - JW Marriott, Cairo, Egypt
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1. NSR’s Economic and
Strategic Significance for Russia
Suez Canal Global Conference (Challenges & Opportunities) 22-24 Feb. 2016 - JW Marriott, Cairo, Egypt
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Source: Nordregio at www.nordregio.se
Map showing gas, oil and mining resources in the Arctic
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Oil & Gas Development Transport
Yamal LNG - Port Sabetta 17.6 million tons LNG per year (2021- )
Year-round operations
16 LNG tankers (172 600 m3)
240 port calls per year (1 tanker/36 h)
Novy Port Oil Field - Novy Port 8.5 million tons per year (2017- )
Year-round operations
New tankers of 36 000 dwt
Monthly export 700 000 tons
Payakha Oil Field – Tanalau 7,3 million tons per year (2024- )
Year-round operations
4-8 Arc7 tankers of 40 000 dwt
220 port calls per year (1 tanker/40 h)
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Russia’s New Ice-Class LNG Tanker
Veliky Novogorod
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Source: Yamal, Total 2014
Yamal’s LNG Shipping Options
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Growth of NSR’s Cargo Traffic as a Result of
Development of Russian Arctic Hydrocarbon Projects
Millions
of tons
Source: Atomflot 2015
Suez Canal Global Conference (Challenges & Opportunities) 22-24 Feb. 2016 - JW Marriott, Cairo, Egypt
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Estimates of Potential Traffic through NSR by 2030
Hydrocarbons Dry Bulk &
Project Cargo
Container
Cargo
50 million tons
5 million tons ?
Including cargo from
Norilsk Nickel currently
about 1.1 million tons per
year; iron ore from
Scandinavia; deliveries to
Arctic communities
Current container traffic
between North European
ports and Asia is now
about 15 million TEUs
per year
Export of hydrocarbon
products from several
energy projects in coastal
and offshore areas of the
Barents and Kara Seas
Source: Far East Development Fund 2015
Suez Canal Global Conference (Challenges & Opportunities) 22-24 Feb. 2016 - JW Marriott, Cairo, Egypt
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Russia’s Integrated Development Plan
for the NSR 2015-2030
Increase NSR’s total cargo volume up to 80 million tons
per year by 2030; or 20-times compared to 2014
The plan has six main focus areas to promote safer and more
reliable navigation on NSR; and strategic importance
Most of the planned cargos are oil and gas resources from the
Russian Arctic coast and continental shelf; mineral resources
Increasing cargo transport on NSR by foreign flag ships
between European and Asian markets; partnerships with
Asian countries, mainly China
Suez Canal Global Conference (Challenges & Opportunities) 22-24 Feb. 2016 - JW Marriott, Cairo, Egypt
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Source: VSEGEI/Rosnedra
Natural Resources of the Eurasian Arctic
Suez Canal Global Conference (Challenges & Opportunities) 22-24 Feb. 2016 - JW Marriott, Cairo, Egypt
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Lena
River Yenisey
River
Ob
River
Kolyma
River
NSR will Unlock the Resource Potential of the Eurasian Arctic
Murmansk
Kandalaksha Vitino
Onega Arkhangelsk
Mezen
Naryan Mar
Varandey
Amdema Sabetta
Dikson
Dudinka
Igarka
Khatanga Tiksi
Pevek
Provideniya
NSR Water Area Anadyr
Petropavlovsk-
Kamchatskiy
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2. NSR as Alternative Trade
Route NW Europe - NE Asia
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Suezmax Tanker
Vladimir Tikhonov
162 360 dwt
LNG Tanker
“ArcticAurora”
84 600 dwt
LNGC Arctic Aurora
84 604 dwt
LNGC Ob River
84 682 dwt
NSR’s Demonstration Voyages 2010-2013
Tanker Propontis
117 055 dwt
Tanker SCF Baltica
117 153 dwt
Bulk Carrier Nordic Orion
Bulk Carrier Nordic Odyssey
75 603 dwt
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Large Vessels with Cargo in 2011
Perseverance Russia to China 59 981 t gas condensate
STI Heritage Russia to Thailand 60 944 t gas condensate
Marilee Russia to China 60 098 t gas condensate
Vladimir Tikhonov Norway to Thailand 120 843 t gas condensate
Stena Poseidon Russia to Korea 57 814 t gas condensate
Perserverance Korea to France 64 400 t kerosene
Palva Russia to China 59 313 t gas condensate
Mariann Russia to Korea 61 259 t gas condensate
Affinity Russia to China 59 079 t gas condensate
Perserverance Russia to China 61 275 t gas condensate
Sanko Odyssey Russia to China 66 344 t iron-ore
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Shipments on NSR Between Ports
Located Outside the Arctic 2012-2013
Vessel Cargo Loading Port Destination Port
Stena Poseidon Jet Fuel Yosu, South Korea Porvoo, Finland
Marika Jet Fuel Yosu, South Korea Porvoo, Finland
Palva Jet Fuel Yosu, South Korea Porvoo, Finland
Nordic Odyssey Coal Vancouver, Canada Hamburg, Germany
Propontis Diesel Ulsan, South Korea Rotterdam, Holland
Mari Ugland Naphtha Zeeland, Holland Mailiao, Taiwan
Zaliv Amurskiy Diesel Onsan, South Korea Rotterdam, Holland
Nordic Bothnia General Xingang, China Amsterdam, Holland
Viktor Bakaev Jet Fuel Yosu, South Korea Rotterdam, Holland
Nordic Odyssey Coal Vancouver, Canada Pori, Finland
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NSR as an International
Trade Route?
Transport Safety
Russian nuclear icebreaker escort; Russian ice pilots; transport by ice-class vessels (Arc4); NSR admittance criteria and Polar Code requirements. Additional support infrastructure needed
Predictability & Punctuality
Attractiveness of NSR for transits is low due to the lack of predictability. Regularity of a year-round supply of goods is no less important than the cost of transportation
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Suez Canal Global Conference (Challenges & Opportunities) 22-24 Feb. 2016 - JW Marriott, Cairo, Egypt
NSR as an International
Trade Route?
Cargo Transport Westward & Eastward
Prerequisite for increased growth of transit shipping on the NSR is the availability of cargo transport in both east and west directions
Economy of Scale
Limited number of vessels with adequate ice class represent a limitation on the utilization of the NSR; makes NSR vulnerable to competition from much larger vessels going via the Suez or Cape
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Suez Canal Global Conference (Challenges & Opportunities) 22-24 Feb. 2016 - JW Marriott, Cairo, Egypt
3. NSR’s Sustainability Plan
Administration
& Management
Transport
Services
Maritime Infrastructure System
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Suez Canal Global Conference (Challenges & Opportunities) 22-24 Feb. 2016 - JW Marriott, Cairo, Egypt
NSR’s Administration
& Management
Minimize the risk of sailing delays due
to sea ice
A single organization needs to oversee
all NSR’s activities, services and
marketing
Tariff system needs to be user-friendly
and fees competitive to fees on southerly
routes
NSR «Authority»
Risk of Delays
Transport
Fees
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NSR’s Transport Services
Availability and readiness of icebreaking
services; optimization of icebreaking
capacity
Modernization of Russian Arctic ports;
refuge and salvage operations
Development of SAR and oil spill
response services
Major improvements in navigational
aids and communication system
Icebreakers
Port
Operations
SAR &
Oil Spill Response
Navigation &
Communication
Suez Canal Global Conference (Challenges & Opportunities) 22-24 Feb. 2016 - JW Marriott, Cairo, Egypt
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NSR’s Infrastructure System
Design a new integraded transportation
and logistics system for reliable and safe
cargo transport
Estimating the costs of the various
infrastructure components
Assessment of different funding
mechanism in financing long-term
capital-intensive infrastructure projects
New Integrated
Transport System
Cost Estimates
Fanancing
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Concluding Remarks
NSR’s Strategic & Economic Importance – NSR has
the potential of unlocking the natural resource
potential of the Russian Arctic
NSR as International Trade Route – A supplimentary
route for certain types of cargos serviced by a fleet of
specialized ice-class vessels on a year-round basis
NSR’s Sustainability of Usage – A number of
administrative, managment, service oriented and
infrastructure issues need to be addressed
Future NSR’s Transportation & Logistics System –
We need to understand what kind of maritime
transport infrastructure is needed for safer and more
reliable transport on a year-round basis
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