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2018 January 10

LNG to drive Arctic shipping development

Liquefied natural gas is becoming the key driver for the development of the Arctic and Arctic shipping, both in Russia and in the USA. With the Alaska LNG project the two countries obtain an opportunity to settle the issue of shipping in the Bering Strait, which is essential for the functioning of the Northern Sea Route and for LNG exports from Alaska.

All flags are welcome

The USA is going to boost LNG production. For that purpose regasification terminals are being converted for gas liquefaction. On the one hand, that will create a competition with the Russian LNG, on the other hand - will let settle the issue of shipping across the Bering Strait.

In the end of 2017, Alaska authorities approved the expansion of the Point Thomson project (LNG production, Point Thomson reservoir, Alaska's North Slope). According to analysts, annual LNG production under the project will reach about 20 mln t by 2020-ies. Just like Russia’s project Yamal LNG, the Alaska LNG project involves Chinese capital.

Liquefied gas is supposed to be transported to the Asia-Pacific region. For example, it will take about 7 days to deliver gas from the Point Thomson to Japan. The route will run across the Chukchee Sea and the Bering Strait, eastern gate of the Northern Sea Route and a border area between Russia and the USA.

The problem resides in the following fact: maritime boundary between the USA and Russia runs along the Bering Strait under a treaty on delimitation line of maritime spaces signed by the United States and the USSR on 1 June 1990. The agreement has not yet been ratified by the Russian Parliament. Besides, the Bering Strait is recognized as waters open for international shipping and covered by the UN Convention on the Law of the Sea (1982) while the USA is not a party to UNCLOS 1982.

Meanwhile, Russia also has its plans on LNG exports by eastern route. The year of 2017 saw the first commercial voyage of the Christophe de Margerie tanker (owned by Sovcomflot), which delivered a batch of LNG by the Northern Sea Route, from Norway to S. Korea. In order to develop the eastern route there is a plan to build the most powerful leader type icebreakers. Besides, Russia is interested in short-sea and transit cargo transportation along this route.

As long as the Bering Strait was not in intense use there were no special problems. However, with the development of the Arctic shipping unsettled issues can hinder the development of both countries.

To settle the situation, the Russian Federation and the USA filed a joint note to the International Maritime Organization (IMO) in December 2017. The two countries suggest designating in the Bering Strait and at the approaches two-way shipping lanes open for free passage of vessels flying the flag of any state. In particular, it is suggested to arrange the traffic of ships sailing in the Bering Strait and between the coasts of Russia and the USA in the Bering Sea so that to decrease the risk of collision by separating opposite-direction flows and to prevent/reduce the risk of pollution or other damage to marine environment.

The designation of two-way routes will ensure availability of free, internationally recognized corridors for vessels sailing across the Bering Strait in the interests of the Russian Federation despite any shifts in foreign policy of the USA.

“According to preliminary estimates, shipping lanes in the Bering Strait can obtain a legal status before the end of 2018”, Vitaly Klyuyev, Director of RF Transport Ministry's Department of State Policy for Maritime and River Transport, told IAA PortNews.

So, the growth of LNG production in the USA will contribute to cooperation of the two countries in the sphere of Arctic shipping despite sanctions.

Vitaly Chernov