Russia will struggle to meet its strategic goal of more than quadrupling Arctic sea shipments by the end of the decade as the nation cannot increase and upgrade its small, aging ice fleet fast enough, according to the Northern Sea Route operator Rosatom.
(Bloomberg) — Russia will struggle to meet its strategic goal of more than quadrupling Arctic sea shipments by the end of the decade as the nation cannot increase and upgrade its small, aging ice fleet fast enough, according to the Northern Sea Route operator Rosatom.
The Arctic route, stretching more than 3,000 nautical miles (5,556 kilometers) between the Barents Sea and the Bering Strait, is the shortest passage between Europe and Asia. Global warming has made the icebound waters increasingly more navigable, creating opportunities for Russian commodity exporters that are focusing on Asian markets amid the Kremlin’s standoff with the West over its invasion of Ukraine.
Russia aims to send at least 150 million tons of crude oil, liquefied natural gas, coal and other cargoes via its Northern Sea Route every year from 2030, a more than fourfold jump on the volumes shipped in 2022, according to the Northern Sea Route development plan approved by the nation’s government.
Yet this goal requires construction of a whole new commercial Arctic fleet, according to Vyacheslav Ruksha, head of the Northern Sea Route Directorate at state nuclear corporation Rosatom.
In the next seven years, the number of Russia’s Arctic cargo vessels — from oil and LNG tankers to bulkers carriers and container ships — will need to grow to 160 from just 30 now, according to the presentation Ruksha made at the St. Petersburg International Economic Forum on Thursday. Currently, only 33 more vessels are under construction.
“I am afraid, we are underestimating technological issues here,” the Rosatom official said. “We cannot bring in such capacities within this timeframe.”
Russia’s fleet of ice-class supply vessels, used for safe navigation in Arctic waters, is aging, Ruksha added. Over 40% of the fleet is more than 30 years old now, and that proportion will grow to 75% by 2030, according to his presentation.
“To increase the navigation timeframe and reduce the shortage of supply vessels, a new universal supply vessel” of a higher ice-class needs to be designed, according to the presentation.
Russia has been successfully raising shipments via the Arctic Sea route in the past several years, bringing them to over 34 million tons in 2022 compared to just 7.5 million tons in 2016. The additional cargoes mainly came from the Novatek PJSC-led Yamal LNG plant, with the producer of super-chilled fuel relying on South Korea to supply new tankers.
Higher cargo volumes would become available with the launch of several major hydrocarbon projects, including the Arctic LNG 2 plant led by Novatek and Rosneft PJSC’s Vostok Oil developed.
Relations between Russia and many of its former trade partners have been strained by the invasion in Ukraine. Korean shipyards will supply only five out of 15 contracted LNG carriers to Russia, Viktor Evtukhov, Russia’s Deputy Industry and Trade Minister, said at the forum.
The nation’s commodity producers will rely on domestic shipyards to grow their commercial Arctic fleet and are holding talks with Chinese shipbuilders to replace Korean partners, Evtukhov said.
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