Novatek readies for all-year use of the Northern Sea Route

Russian gas producer Novatek has outlined plans to get LNG exports moving through the Northern Sea Route (NSR) all-year round, something that has environmental groups on edge.

Novatek operates the Yamal LNG facilities in Russia’s Arctic north, which has seen huge volumes shipped to Asia in its fist year of operations.

“Our plan is to keep the Northern Sea Route open twelve months a year in 2023 to 25 with 100-megawatt-hour nuclear icebreakers,” Novatek chief financial officer Mark Gyetvay told delegates at an energy conference attended by Reuters yesterday.

Russian yards have started building a series of giant nuclear-powered icebreakers, which are mean to deliver in four years’ time, although they could experience delays in construction, experts have told Splash.

Commenting on the Novatek news, Malte Humpert, founder of the Arctic Institute, a think tank, cautioned that the NSR opening all year round would still remain a niche trade, very much focused on energy exports.

“The Arctic will not change the flow of global goods. The reason why Russia and Novatek are interested in developing the NSR is to export its natural resources to markets in Europe and Asia. The NSR will remain a niche trade route and will primarily be used to export Russian oil and gas,” Humpert told Splash.

As it stands the route is open for ice-class ships for eight months of the year.

Mikaa Mered, a professor at French business school NEOMA, said Novatek’s plans were very likely to go ahead.

“With the technology now at Novatek’s disposal on the market and climate change helping their plans, it is feasible indeed,” Mered said.

The route has been open all-year in the past. During the Cold War the NSR was open all the time to supply military bases even during winter.

The Arctic saw 400,000 tons of transit traffic on 28 vessels in 2018. By comparison, the Suez Canal saw 18,000 ships and 525m tons. Russian president vowed in March last year to increase traffic along the Arctic route tenfold by 2025.

Alexey Knizhnikov from WWF Russia told Splash the wildlife NGO was worried about the growing maritime traffic in the region.

“We have already seen a huge increase in gas tanker traffic in the Russian Arctic. Every day and a half, a tanker with LNG leaves the port of Sabbeta. In three to five years it will be one a day,” Knizhnikov told Splash today. “One of our concerns is the that huge increase in shipping traffic will cause a direct impact on marine mammals. There is still a huge gap in Russian regulation. There is no marine spatial planning legislation,” he added.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
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