Russia seeks new sea routes to Asia

A Russian gas tanker completed a pioneering voyage this week through the Northern Sea route, with the new journey expected to transform global trade.

Russia is keen to open up the Northern Sea Route from Europe to Asia, with the passage possible to cut 10,000 kilometers or more compared to journeys that go via the Suez Canal and the Indian Ocean.

Russia's biggest private gas producer, Novatek, is acting as a pathfinder, as it wants to open up a direct route to export its liquefied natural gas to Asia. The arrival of the tanker Baltika, with 70,000 tonnes of gas condensate aboard, in the Eastern Russian port of Pevek signified a new milestone in that ambition.

The most difficult part of the route between Russia’s city of Murmansk and China ends in the port of Pevek. The cargo ship, supported by nuclear icebreakers, completed its journey within 11 days, which was even quicker than expected.

Novatek says shipment through the Suez Canal costs up to $3.5 million for one cargo, and that going via the Northern route knocks about half a million dollars off that figure, let alone the time saved and the fact there are no pirates along the way. Given this, Leonid Mikhelson, CEO at Novatek, says the company will try actively to develop the route.

“We are very pleased with the result of the journey. I think we’ll try to ship several cargoes, maybe up to six next year, and we’ll try to make this route usable for our LNG projects. Now it is only working in summer when the ice is thin, but we hope to make it navigable year around.”

The effort to make the route commercial is being undertaken with the help of Russia’s nuclear company AtomFlot, which provides the nuclear icebreakers, and SovComFlot, which leases the tankers and offers other maritime support.

Vakentin Dadayants, an icebreaker captain, said time was needed to get accustomed to the new game-plan.

“For us, it is very new to work in tandem with tankers. This journey showed what is possible. The aim is, of course, to make the route commercial and it will take a bit of time to get used to working together.”

Novatek's primary motivation for opening the route is access to the gas fields in the Yamal Peninsula. It is the biggest investor in the project.

The liquefied natural gas plant is scheduled to start operating in 2015 and will have a capacity of around 15 million tonnes annually, which compares with 9.6 million tonnes produced at Sakhalin-2, the only LNG facility in Russia. The company hopes that, by the time Yamal is up and running, so will the Northern Route be.

Although the North-East Passage considerably shortens the journey to Asian markets, the route is difficult to navigate due to climatic conditions, which make the help of expensive icebreakers necessary.

The successful passage of this cargo ship raises the prospects that many more will follow.