• 2021 July 29

    Arctic prospects

    New LK-60 icebreakers. Photo by IAA PortNews

    The Northern Sea Route development foresees the construction of special transport ships of arctic class including dry bulk and container carriers. Among promising projects Rosatom considers the development of coal exports and establishment of container transit lines on the northern route.

    State Atomic Energy Corporation “Rosatom” responsible for the infrastructure development of the Northern Sea Route expects the transit cargo flow along the Northern Sea Route to grow with the increase of exports and container cargo transit. Those issues were discussed at the Arctic Day conference held recently by Rosatom in Saint-Petersburg.

    By 2030, annual capacity of ports in the Arctic basin is to be increased to 115 million tonnes, cargo flow on the Northern Sea Route – to 110 million tonnes. By 2035, annual cargo flow on the Northern Sea Route is expected to reach 160 million tonnes.

    The above mentioned results are to be achieved with implementation of the Novatek’s projects and oil exports as well as with the growth of Nornickel’s product transportation, development of the Syradasayskoye coal deposit, construction of the Baimsky GOK and development of transit shipping.

    Export

    Nornickel is set to undertake a large-scale reconstruction and expansion of Dudinka port and to build a fleet of icebreakers.

    As Sergey Dubovitsky, Senior Vice President for Strategy, Strategic Projects, Logistics & Procurement, Nornickel, said at the Arctic Day conference in Saint-Petersburg, the company is going to invest up to RUB 14 billion in the port infrastructure expansion including RUB 8 earmarked for construction of two marine and two river berths, RUB 3.5 billion – for acquisition of five cranes and other handling equipment, RUB 3 billion – for the development of storage infrastructure and utilities.

    Besides, there is a plan to build up the port’s capacity for handling the company’s own cargoes by 0.7-1 million tonnes per year including 0.3-0.5 million tonnes of seaborne freight which will require more additional investments of up to RUB 26 billion.

    RUB 14 billion is to be invested into fast replacement of 35 portal cranes by 2027, RUB 5 billion – into development of rear yards and special port equipment, RUB 2.5 billion into accelerated reconstruction of two marine terminals. RUB 4.5 billion is to be invested in replacement 10 mobile and one portal crane, overhaul of equipment and infrastructure, container fleet etc.

    “We consider essential investments in this port without parallel in soviet times. Investments under our basic programme for our own needs alone are estimated at up to RUB 26 billion with building up this port’s capacity by about one third”, said Sergey Dubovitsky.

    Moreover, the company intends to built its own duel-fuel icebreaker running on diesel fuel and LNG and able to break through ice of up to 2 meters thick. The icebreaker is to be further handed over to Rosatom for operation. Together with Rosatom, the company is ready to take part in construction of an icebreaker to replace the nuclear-powered icebreaker as well as ships to replace Nornickel’s harbor icebreaker Dudinka.

    Under the framework agreement, the company has outlined several vectors of fleet development. “It is a long-term chartering of an icebreaker and construction of several new icebreakers. The construction of one icebreaker will be initiated and financed by our own resources. We will cooperate with Rosatom on its operation. The construction of two more icebreakers to replace the Taimyr and Vaigach that are coming out will be discussed to decide on joint implementation of the project. Besides, we are about to renew our harbor icebreakers in Dudinka”, said Sergey Dubovitsky.

    Large-scale investments are planned for the development of the Syradasay coal deposit project on the Taymyr Peninsula. It is associated with the construction of the Severnaya Zvezda terminal.

    As Roman Trotsenko, head of Aeon Corporation, said at the Arctic Day Conference, total investments in the terminal is estimated at RUB 100 billion for a period through 2025 with investments into the first phase estimated at RUB 45 billion. The project foresees the construction of a dam, the longest in the Arctic covered conveyor for coal delivery to the port, a power station with pulverized coal combustion and a ship loading machine of 3,000 tonnes per hour in capacity.

    A new design of a dry bulk cargo carrier, ArcticMax, is to be developed for coal shipments from the Severnaya Zvezda terminal. It will have a capacity of 105,000 tonnes, ice class Arc5, load draft of 15 meters, width of up to 40 meters for being able to follow an icebreaker along the channel.

    Another project in the Arctic is being implemented by GDK Baimskaya – a project for the construction of a mining and processing facility for the Baimskaya ore zone development. The Baimskaya resources are estimated at 23 million tonnes of copper 2,000 tonnes of gold (64.3 million ounces). GDK Baimskaya holds a license till 2033.

    Rosatom is going to build four floating power units for the Baimskaya zone.

    According to Aleksey Likhachev, General Director of Rosatom, the designing works have already begun. “As soon as essential legal agreements on production and energy consumption are signed we will proceed to placing orders. The orders will be awarded to Baltiysky Zavod”, he said.

    LK-60 icebreakers Sibir and Ural under construction. Photo by IAA PortNews

    Transit

    Transit is a separate topic. Before the mid-2020s transit on the Northern Sea Route is not expected to play any significant role but it can reach 20-30 million tonnes per year by 2030.

    As Rosatom General Director Aleksey Likhachev told journalists, “the key change to feature the second half of 2020-ies is the multiplied transit. In this respect, we understand that 80 million tonnes of cargo mostly exported from Russia will be supplemented with 30 to 40 million tonnes of transit cargo carried annually due to the focus on the eastward lanes of the Northern Sea Route and its year-round operation. That requires the development of additional conditions related to navigation, safe shipping ... The bulk of transit will be ensured by transportation of containers. Therefore, there should be transport and logistic hubs built at the entry to the Northern Sea Route and at the exit of it to ensure the change of ships and transshipment of containers. A container ship of special class, Acrtic6/Arctic7, should be also created by that time, of course”.

    The first step towards the development of transit cargo shipping was assigning of an agreement between DP World and Rosatom.

    Under the agreement, the parties will join efforts in developing pilot container shipping between Northwest Europe and East Asia using the Arctic support transport infrastructure. 

    The national infrastructure operator of the Northern Sea Route (NSR) and the international global logistics leader believe that their cooperation in developing and testing the integrated Arctic-based cargo transport infrastructure services will give the market an opportunity to pilot an optional cargo transportation route that will improve the sustainability of the Eurasian exchange of goods and the world trade as a whole.

    DP World has already committed to invest $2 billion with the Russian Direct Investment Fund.

    Signing of agreement by DP World and Rosatom. Photo by IAA PortNews

    As Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World, told IAA PortNews, the recent surge of freight rates increased the cost of container shipping five-six times. Besides, enormous volumes of cargo waiting for shipping have accumulated due to the pandemic.

    “In fact, the cost of container shipping from the Far East to Europe and the USA has surged five-six times. The Northern Sea Route is shorter and there are not so many ships there, so it will certainly be cheaper”, said DP World representative.

    When commenting on the prospects of loading for a return voyage, Sultan Ahmed Bin Sulayem said there would be enough cargo. “We have a terminal in London and we ship cargoes from London to China but transportation by the Northern Sea Route will be lower. There is cargo to be carried”, he said.

    Meanwhile, Rosatom is looking into construction of four ice-class container ships running on LNG by 2025. Head of Business Development of Rosatom Ekaterina Lyakhova says the concept design for those ships is ready. Their capacity will be 6,000 TEUs, power - 52.5 MW, icebreaking capacity – 2.76 meters. The ships are to be powered by liquefied natural gas (LNG). Shipyard potentially able to build such container ships have already been determined. The newbuilds are to operate on the Arctic container line.

    Icebreakers

    Ice is not going to disappear in the Arctic but multi-year ice can become seasonal, Dmitry Zaitsev, Deputy Head of Roshydromet, said at the Arctic Day conference. In view of this forecast, a powerful fleet of icebreakers is needed to support the growing cargo transportation in the Arctic.

    LK-60 icebreaker Ural under construction. Photo by IAA PortNews

    When speaking at the conference, Vyacheslav Ruksha, Rosatom Deputy Director General and Director of the Northern Sea Route Directorate, said the Taimyr, Vaigach and Yamal icebreakers would reach the end of their lifespan by 2030. By that time Russia will have seen nuclear-powered icebreakers with the service life of the 50 Let Pobedy icebreaker to be extended in 2025.

    A programme on service life extension for the Taimyr, Vaigach and Yamal icebreakers till 2027 has been developed by Rosatom.

    It should be reminded that construction of the lead 120-MW icebreaker of Leader type is underway. A decision on serial production of such icebreaker is to be taken in 2023-24.

    “When making the decision to build the lead icebreaker, Rossija, at Zvezda we used to stress that it is the lead ship and in 2023-24 we will make the decision on serial production of Leader type icebreakers. Today we are conducting analysis to understand hown many 120-MW icebreakers will be needed in 2030s”, said General Director of Rosatom.

    Besides, by the end of 2021 Rosatom is to make a decision on construction of up to four mid-size icebreakers. 

    “Through cooperation with the business we will build lighter icebreakers of 30, 35, 40 MW for operation in slight ice, in estuaries. We agree on building icebreakers running on liquefied natural gas (LNG) and their payback period will be shorter”, said Aleksey Likhachev adding that basing on the finding of the analysis involving scientists “a decision on possible construction of up to four small (mid-size) icebreakers is to be made before the end of the year”.

    Frozen logistics

    For a long time ahead, the Northern Sea Route will obviously develop as a way for transportation of resources extracted in the Arctic zone. Nevertheless, expectations of the transit growth in the long-term are still quite promising. The market volatility is obvious today in the container segment: the surge of prices for seaborne transportation of containers has already resulted in updating of logistic schemes and particularly to taking over some transit cargoes by railway transport. In this situation, the Northern Sea Route can occupy its niche although it cannot count on becoming a new Suez Canal. Anyway, strong icebreaking and infrastructure support is needed to ensure successful development of the Northern Sea Route.

    Take part in conferences focused on construction of icebreakers, support ships and vessels powered by alternative fuels:

    4th international conference “Development of Icebreaking and Support Fleet” >>>>

    5th Conference “LNG Fleet, LNG Bunkering and alternatives” >>>>

    By Vitaly Chernov

    news@portnews.ru

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