We are northward bound…
Russia is trying to revive an old idea, known since Soviet era, about the opening of the regular navigation along the Northern Sea Route (NSR) to Asia-Pacific region, instead of the usual southern shipping lane via the Suez Canal. First of all, the idea is interesting for the Russian gas companies. Thus, Novatek has already shipped on the NSR 70,000 tons of gas condensate to the port of destination Ningbo (China).
...shipping our cargo
Novatek’s cargo has been successfully carried by the Sofcomflot’s Baltica tanker to an intermediate destination at the port of Pevek in Russia’s Chukotka.
...shipping our cargo
Novatek’s cargo has been successfully carried by the Sofcomflot’s Baltica tanker to an intermediate destination at the port of Pevek in Russia’s Chukotka.
Thus, the 100,000DWT tanker has completed the most difficult part of the route. The SCF Baltica tanker was escorted by the Atomflot’s three tankers, Taimyr, Russia and 50 Years of Victory.
According to Sergei Frank, CEO and President of Sovkomflot, the tanker called at the port of Pevek ahead of schedule, indicating the efficiency of cargo transportation by the Northern Sea Route (MSP). "This part of the route, up to Pevek, the tanker covered in 1.5 days, faster than we planned. In general, the idea to use here large vessels, make the economy of energy supply shipments from the Barents and Kara Sea to the markets in the Asia-Pacific region viable, and the cruise has demonstrated it," Sergey Frank said. The SCF Baltica is expected reach the port of destination in China in the first quarter of September, 2010.
According to Sergei Frank, CEO and President of Sovkomflot, the tanker called at the port of Pevek ahead of schedule, indicating the efficiency of cargo transportation by the Northern Sea Route (MSP). "This part of the route, up to Pevek, the tanker covered in 1.5 days, faster than we planned. In general, the idea to use here large vessels, make the economy of energy supply shipments from the Barents and Kara Sea to the markets in the Asia-Pacific region viable, and the cruise has demonstrated it," Sergey Frank said. The SCF Baltica is expected reach the port of destination in China in the first quarter of September, 2010.
Novatek’s Board Chairman Leonid Michelson said the company was pleased with the result and intends to equip next year 6-8 cruises along the NSR. After completion of the Yamal LNG project, that means construction on the Yamal Peninsula production capacities for liquefied natural gas, the NSR annual cargo turnover, of Novatek’s freight shipment only, might be about 16 million tons. "We have no doubt that the Baltic tanker will deliver our cargo to the customer. And with the launch of capacities on the Yamal Peninsula cargo delivery to the Asia-Pacific region along the northern shipping lane will become a very important opportunity for us ", said Mr. Michelson. In 2011, the Northern Sea Route will also be kept busy delivering Novatek’s gas condensate exports to China and Korea. "Next year we are going to work out a program - and it will not be just one, but several cruises," the Novatek’s Chairman said.
In addition, the development program of the Yamal Peninsula, where GazpromNeft has been developing new oil fields, might also bring in future more freight traffic on the NSR.
For its part, Sovkomflot intends to expand a "window of opportunities" for freight shipments along the NSR. Next year the shipping company plans to launch on the route to the north of the New Siberian Islands the Suezmax class tanker Alexei Kosygin, of 163,000 dwt (capable to carry 1 million barrels of oil), as well as the Panamax size tanker to sail along the southern lane of NSR.
Noteworthy, the nuclear-powered icebreaker 50 Years of Victory managed to cover the distance from Murmansk to Pevek in just five days, which is a record time. The icebreaker was conducting survey of the routes for piloting ships next year. "During the voyage we have accumulated unique technical, engineering, scientific material that will enable us to refine our understanding of the ideal types of ships that could provide transportation services for Yamal projects to ensure a stable year-round navigation westward and use the east direction, at least during the 5-6 months... We, jointly with Novatek, Rosatomflot and the relevant ministries and agencies, will be analyzing the obtained information so we could have in hands the best technical solutions at the moment the Yamal projects in the Kara and Barents seas are launched," said the head of Sovkomflot.
For its part, Sovkomflot intends to expand a "window of opportunities" for freight shipments along the NSR. Next year the shipping company plans to launch on the route to the north of the New Siberian Islands the Suezmax class tanker Alexei Kosygin, of 163,000 dwt (capable to carry 1 million barrels of oil), as well as the Panamax size tanker to sail along the southern lane of NSR.
Noteworthy, the nuclear-powered icebreaker 50 Years of Victory managed to cover the distance from Murmansk to Pevek in just five days, which is a record time. The icebreaker was conducting survey of the routes for piloting ships next year. "During the voyage we have accumulated unique technical, engineering, scientific material that will enable us to refine our understanding of the ideal types of ships that could provide transportation services for Yamal projects to ensure a stable year-round navigation westward and use the east direction, at least during the 5-6 months... We, jointly with Novatek, Rosatomflot and the relevant ministries and agencies, will be analyzing the obtained information so we could have in hands the best technical solutions at the moment the Yamal projects in the Kara and Barents seas are launched," said the head of Sovkomflot.
As Rosatomflot’s General Director Vyacheslav Ruksha said, the operation of the NSR will benefit the economy of the company, because, part of Atomflot’s ships are lying idle during the summer, so, the more voyages along the Northern Sea Route, the lower the price for ice-breakers service, Mr. Ruksha said, adding that the icebreaker 50 Years of Victory alone can escort more than one tanker at a time through the NSR.
Speaking at the press conference in Pevek, CEO and President of Sovcomflot Sergey Frank said that one tanker cruise along the Northern Sea Route saves about 45% of the time as compared with the alternative southern route via the Suez Canal. According to the Novatek’s Board Chairman Leonid Michelson, the total cost of transportation of seaborne cargo from the White Sea to the Asia-Pacific Region (APR) along the southern shipping lane via the Suez Canal costs about $50 a ton. He said, “in 2011 Novatek expects to save at least 10-15% on transportation via the Northern Sea Route to Asia-Pacific regional markets”.
That nasty Nordic nature
Actually, the north shipping lane has a number of evident advantages, as compared with the classical route through the Suez Canal. First, the time saving that according to Sovkomflot reaches 45%. Secondly, the southern route passes through the Gulf of Aden, swarming with Somali pirates. Besides, the transit through the Suez Canal costs money.
Nevertheless, it is hard to expect some sort of massive shipping on the NSR. The northern lane are unpredictable because of changing weather condition and very complicated in terms of navigation, they require years of experience of the ship masters and crews, as well as increased requirements to the vessels. So, the route will hardly be of interest to foreign shipping companies, although the movement of foreign-flagged vessels is allowed here since the 80's, and this year a Norwegian bulk carrier is expected to sail via the shipping lane.
"Anyone who wants to go here should have the appropriate equipment, competent personnel. Many people in the world can build such ships, but few can properly steer them along the NSR. Icebreakers masters of Atomflot have been experienced in such conditions, at least 20 years. The main thing in the Arctic is not iron, but the people", PortNews correspondent quoted Sovcomflot’s CEO Sergei Frank as saying.
Development of Russian offshore deposits could revive freight traffic via the NSR, but the projects are still a long-term perspective.
The Novatek’s Yamal LNG project that would bring major freight flows via the NSR is still at the stage of conceptual design, and the project investment decisions is expected to be made in 2013. So, this turns to be a long-term perspective, not earlier than 2015-2016.
Actually, the north shipping lane has a number of evident advantages, as compared with the classical route through the Suez Canal. First, the time saving that according to Sovkomflot reaches 45%. Secondly, the southern route passes through the Gulf of Aden, swarming with Somali pirates. Besides, the transit through the Suez Canal costs money.
Nevertheless, it is hard to expect some sort of massive shipping on the NSR. The northern lane are unpredictable because of changing weather condition and very complicated in terms of navigation, they require years of experience of the ship masters and crews, as well as increased requirements to the vessels. So, the route will hardly be of interest to foreign shipping companies, although the movement of foreign-flagged vessels is allowed here since the 80's, and this year a Norwegian bulk carrier is expected to sail via the shipping lane.
"Anyone who wants to go here should have the appropriate equipment, competent personnel. Many people in the world can build such ships, but few can properly steer them along the NSR. Icebreakers masters of Atomflot have been experienced in such conditions, at least 20 years. The main thing in the Arctic is not iron, but the people", PortNews correspondent quoted Sovcomflot’s CEO Sergei Frank as saying.
Development of Russian offshore deposits could revive freight traffic via the NSR, but the projects are still a long-term perspective.
The Novatek’s Yamal LNG project that would bring major freight flows via the NSR is still at the stage of conceptual design, and the project investment decisions is expected to be made in 2013. So, this turns to be a long-term perspective, not earlier than 2015-2016.
On the other hand, Russian needs the Northern Sea Route not only as an economically viable lane for energy exports to the Asia-Pacific region, where the dynamics of the commodities consumption is growing faster than in Western countries, but in order to consolidate the geopolitical position of Russia in the Arctic, as well as for the social development of areas of the Russian Far North. In addition, the exploitation of the NSR is likely to affect other areas, optimizing the work load of ships of Sovcomflot and Atomflot and reducing the cost of their services.
Vitaly Chernov.