Northern consolidation

Russian Government is set to centralize the development of the Arctic through overcoming the lack of cooperation between different agencies. For that purpose the Northern Sea Route Administration is to be converted from a purely technical authority into an ‘arctic ministry’. Principal decisions on state regulation of Arctic activities are expected to be made by RF President in March 2017.

Beyond the Arctic horizon

The key challenge which Russian Government is facing in the field of Arctic development is the lack of cooperation between different agencies, Dmitry Rogozin, Deputy Prime Minister, Chairman of the Arctic State Commission, told journalists following the meeting of the Commission. During the meeting he was criticizing the activities of most ministries charged with Arctic issues for sluggishness. Neither the concept of arctic transport development till 2030, nor the state programme for the social-economic development of the Arctic or the dedicated legislation were developed.

Yet, it is explainable –for most ministries Arctic is one of many issues, not among the today’s priorities. Perhaps, that is one the reasons to establish other centers for regulation of Arctic issues. As for seaborne transport, it should be coordinated by the Northern Sea Route Administration, Dmitry Rogozin says. Today, it is a purely technical authority issuing permissions for vessels to use the Arctic route. Now it is to be converted into a sort of ‘Arctic transport ministry’. "The NSR Administration has to be not just a service that finds certain freight flows, but the service that must organize, work to attract to the Northern Sea Route the world's leading carriers," said Dmitry Rogozin. He also added that this work should be synchronized with shipbuilding programme of the Arctic vessels, including the shipbuilding complex "Zvezda" in Primorsky Krai intended for construction of large capacity Arctic ships.

The volume of seaborne cargo shipped in transit along the Northern Sea Route, as of December 1, 2016 reached 6.9 mln t (according to the Ministry of Economic Development of the Russian Federation). The Ministry said that was a record figure. In the nearest future the Northern Sea Route traffic is expected to grow to 30 mln t due to the development of hydrocarbon deposits in the Arctic.

General development of the Arctic is to be based on anchor zones created in the framework of large scale projects including those in the transport sector.

Cold calculations

Meanwhile the project on comprehensive development of the Northern Sea Route approved by RF Government in 2015 is being implemented as well as a package of measures on navigation & hydrography, emergency & rescue and hydrometeorological support of the NSR shipping as well as on development of Arctic seaports.

Apart from the well known Sabetta and Novy Port projects, the list of ambitious transport projects includes the reconstruction of Naryan Mar port and construction of transshipment facilities in the Bay of Indiga. Investments into the above projects are estimated at RUB 3.7 bln. Nenets Oil Company OJSC has already embarked on design works.

NNK-Taimyrneftegazdobycha OJSC is the investor of a project on construction of an oil terminal at Cape Tanalau for shipments of oil produced at Payakhsky and Severo-Payakhsky fields. Total investments into the project are estimated at RUB 8.9 bln. NNK-Taimyrneftegazdobycha is currently developing the project documentation.

The construction of a deepwater district Severny at the port of Arkhangelsk is in the phase of the pre-project development. The project provides for creation of a new cargo district consisting of four dedicated transshipment facilities with total capacity of 28 mln t. Dmitry Rogozin says this project and the related project known as Belkomur are among the priorities in the Arctic.

We should also mention the project on construction of a fuel and energy facility at Tiksi seaport (Arctic Uglesintez LLC) and a dedicated coal terminal at Beringovsky seaport with annual capacity of 10 mln t (Beringtransugol LLC).

Besides, there is a project on construction of a facility for production, storage and shipment of LNG and gas condensate at Salmanovsky (Utrenny) oil and gas condensate field. The terminal which is to be built under the project is to have a capacity of 16.5 mln t per year. The project investor is Arctic LNG-2 (NOVATEK) is about to complete the construction of a berth for shipments of construction materials, fuel and equipment needed for the field development.

New icebreakers are also required for successful development of the Arctic. Five nuclear-powered icebreakers that are in operation today are to be decommissioned between 2017 and 2025. Decommissioning of the nuclear-powered icebreaker Taimyr is scheduled for 2018, the Vaygach – for 2020. Most of Rosmorport’s diesel-electric icebreakers are to be decommissioned between 2017–2019.

Saint-Petersburg based shipyard Baltiysky Zavod – Sudostrojenije is building three 60MW icebreakers of project 22220 (Arktika, Sibir, Ural) scheduled for delivery in 2017 – 2020.

However, this is not enough. To ensure smooth passage of large capacity vessels along both high and low latitude lanes Russia needs a principally new icebreaker, a Leader-class ship, able to make a canal of at least 50 meters wide and ensure a commercial speed of 10 knots for vessels in the ice convoy.  Krylov State Research Center and Iceberg Central Design Bureau are working on the icebreaker design (Read more >>>> ). Such vessels are supposed to be built in Saint-Petersburg, at one of USC shipyards, Baltiysky Zavod or Severnaya Verf. Modernization of the shipyards is needed to embark on the project.

In this context it is necessary to ensure gradual localization of technologies and equipment. This process is already showing positive dynamics. Dmitry Rogozin says a unified e-catalogue of products and technologies for Arctic application will be issued by mid-2017. It will provide information on production volumes, technical characteristics and contacts of the manufacturers. State order for Arctic equipment will be based on that catalogue with the contracts to be awarded to domestic manufacturers.

In late March 2017 Arkhangelsk will host the Arctic: Territory of Dialogue Forum and the meeting of the State Commission for Arctic Development traditionally attended by Vladimir Putin. Most probably, crucial decisions will be made then. Arctic development is proceeding from the preliminary works to the practical activities requiring prompt decision making and setting of precise goals and objectives.

Vitaly Chernov