FAR EAST FOCUS: Northern Sea Route heats up between Europe, East Asia

August 21, 2012

THE ASAHI SHIMBUN

My handheld global positioning system (GPS) device showed a reading of 68 degrees 58 minutes north latitude. The Arctic Circle sits at 66 degrees 33 minutes north latitude.

It was July 6 in the Russian port of Murmansk, the largest city in the Arctic. The MV Nordic Odyssey, an ice-resistant bulk tanker with a deadweight capacity of 75,000 tons, was preparing to leave port in four days, loading up with iron ore from a freight train. The daylight reflected off gray powder pouring from a crane with a dull gleam. This time of year, the sun shines 24 hours a day in the Arctic.

The MV Nordic Odyssey would follow an eastward course plowed by a Russian nuclear-powered icebreaker along the Arctic coast, then turn south at the Bering Strait and head for northern China. It would be a 20-day journey. The tanker, owned by a Danish shipping company, Nordic Bulk Carriers AS, was built two years ago in Japan, where it was outfitted with an optimal ice-resistant design needed to navigate the Arctic Ocean.

A crew of 23 operates the MV Nordic Odyssey. This journey would be 44-year-old Master Igor Shkrebko's first time to traverse the Northern Sea Route shipping lane. "We'll be fine," he said. "We have an icebreaker helping us."

Compared to the conventional route passing through the Suez Canal in Egypt, the Northern Sea Route reduces the distance between Europe and East Asia by about 40 percent.

The Arctic ice has been rapidly receding in recent years, and according to Rosatomflot, a Russian state-run corporation that guides ships through the Arctic with nuclear-powered icebreakers, the number of cargo ships taking the Northern Sea Route has jumped from only four in 2010 to 34 last year. The September-October period during which the route is navigable has expanded from late June through November.

Much more cargo is expected to be shipped this year because there is little ice, thus allowing large vessels to take routes in Arctic waters deep enough for them to navigate.

Ironically, just how active trade becomes on the Northern Sea Route will depend on how severe global warming gets. These changes are also leading to ideas about exploiting the Arctic's natural resources.

We were required to wait at the entrance to Bolshoy Kamen, a port city of 40,000 people in the coastal region of the Russian Far East. The entire city is closed to everyone, except residents and those with special permission, due to the defense industry's presence there.

We were led to the Zvezda Shipyard, where nuclear-powered submarines of Russia's Pacific Fleet undergo repairs. Large-scale upgrades to the shipyard began this year.

Hoping to exploit private sector demand along the Northern Sea Route, the upgrades are meant to turn the shipyard into a facility that can construct large, Russian-made, ice-resistant tankers by 2018. In the final phase, a joint venture with South Korean company Daewoo Shipbuilding & Marine Engineering Co. will build an enormous dry dock.

In 2007, by order of President Vladimir Putin, the Russian government established United Shipbuilding Corp. (OSK) to bring the entire country's shipbuilding industry under one roof.

Yuriy A. Filchenok, deputy general director of the Far Eastern Shipbuilding and Shiprepairing Center, OSK's regional headquarters, said, "With conventional tankers and cargo ships, I don't think we can compete with South Korea and Japan, who lead the world in shipbuilding technology." OSK wants to find a way to get into building ice-resistant ships, demand for which will grow as activity along the Northern Sea Route ramps up.

I could hear the sound of construction work on the expansive site's new building, where work had begun on building a small ice-resistant tanker.

Arctech Helsinki Shipyard Inc. is based in Helsinki, the Finnish capital. The company is in the final phase of constructing the 7,100-ton Vitus Bering, a multi-functional icebreaking transportation vessel, in a covered dry dock. The ship has a length of 99.9 meters. Circling around to the stern, one can see two giant propellers built into the screws, forming single components. Each one can rotate 360 degrees, providing the vessel with full maneuverability on the seas.

An icebreaker splits the ice to open a path, whereas an ice-resistant vessel is merely strong enough to navigate through frozen waters. Tankers and other ice-resistant vessels proceed along paths through the ice plowed by Russian nuclear-powered icebreakers.

The bow of an icebreaker is shaped to split the ice, but it creates significant drag in normal waters. The Vitus Bering has a bow for non-polar seas and a stern suited to breaking the ice. It is a "double acting" ship that "is ice-resistant moving forward and an icebreaker moving backward." The vessel will be used to carry out tasks such as transporting materials for the Sakhalin-1 project to produce oil in the Far East.

Helsinki has a cluster of firms involved in the construction and technical development of ships that navigate icy waters. Although the Soviet Union monopolized access to the Northern Sea Route along the Russian coast until the end of the 1980s, orders drastically dropped in the 1990s when the Soviet Union collapsed. However, things turned around in the late-2000s due to the exploitation of natural resources around the Arctic and in the Russian Far East.

Foreign companies from Asia and Europe are interested in using the route. In 2009, Arctech Helsinki Shipyard's predecessor was brought under the umbrella of major South Korean shipbuilding group STX. Last year, the company started as a joint venture firm set up with United Shipbuilding Corp. (OSK), a Russian company. STX is also a principal shareholder of the design firm that developed the "double acting" technology.

As global warming progresses, gas exploration companies will exploit resources around the Arctic region, which is said to contain 30 percent of the Earth's undiscovered natural gas reserves. These will then be carried to growing Asia-Pacific markets via the Northern Sea Route.

Last year Novatek, an independent Russian company developing natural gas fields on the Yamal Peninsula, which juts out into the Arctic Ocean from northwestern Siberia, sent tankers on eight trips along the Northern Sea Route to China, South Korea, Thailand and Singapore.

The company will begin operating a liquefied natural gas (LNG) plant with an annual production capacity of 15 million tons in 2018. Mikhail V. Popov, first deputy chairman of the Management Board and commercial director at Novatek, says that "this project wouldn't have gotten anywhere without using the Northern Sea Route." Novatek is now designing a double acting, ice-resistant LNG tanker that can pass through ice as thick as 2.5 meters or more so that the company can export gas through the Northern Sea Route year-round.

Japanese firms are also taking substantial steps in anticipation of future shipping along the route. Weathernews Inc., based in Minato Ward, Tokyo, has begun analyzing satellite data and providing vessels with information on sea ice along the Northern Sea Route. In September, the meteorological information company will launch its own ultra-small satellite on a Russian rocket.

ICEBREAKER "ESCORT FEES" POSE OBSTACLE

"If a cargo ship with a maximum load capacity of 40,000 tons can pass through the Northern Sea Route, that will shorten the journey by 22 days and cost $839,000 (65.8 million yen) less than going through the Suez Canal."

This was the "breakdown" given by Felix H. Tschudi, the 52-year-old chairman of Tschudi Shipping Co. AS, based in Norway. However, the shipping industry is not just looking at the Northern Sea Route with rose-tinted glasses.

The company that owns the MV Nordic Odyssey, an ice-resistant bulk tanker, estimates that when the vessel uses the Northern Sea Route it uses 1,000 tons less fuel and costs around $650,000 less than when it travels via the Suez Canal. Yet while the toll to pass through the Suez Canal is $250,000 or so, the cost of an icebreaker escort is around $400,000--not to mention the additional insurance premiums. A company executive said, "It's not worth it if the ship gets stuck in heavy ice for two weeks."

Russia currently manages the icy patches of the route near its coastline. Using the route requires the country's permission and a nuclear-powered icebreaker escort.

Liu Miaojia, 35, chief education officer at the Baltic and International Maritime Council (BIMCO), points out that in addition to how many days a journey takes, other key points are the costs of an icebreaker escort and fuel.

"I don't think (the route) will be economical so long as Russia doesn't do anything to cut costs."

With record low ice extent last year, some agree with the opinion that "icebreaker escorts might become unnecessary in the summers."

However, it is rare to hear this from foreign shipping companies that use the Northern Sea Route. As things currently stand, Russia's cooperation is indispensable when passing along its coast. Another thing is that there are very few ports along there, so many traders believe they need icebreakers to guide their vessels in the event of an accident.

Stanislav A. Golovinsky, deputy general director of Rosatomflot, a company that guides ships through the Arctic with nuclear-powered icebreakers, indicates that the company is considering simplifying procedures. He said it "would like to conclude long-term contracts with vessels once they get permission." While national governments are vying for access to the Arctic Ocean's natural resources, making the Northern Sea Route a "viable" shipping lane is one issue that is in the interest of all parties.

In 2007 Artur N. Chilingarov, a member of the Duma's upper house and a polar region researcher, used a deep-submergence vehicle to plant a Russian flag on the seabed below the North Pole, causing an international uproar. Even so, he has said that "it is to Russia's economic benefit" for many foreign vessels to travel along the Northern Sea Route.

CONCERNS OVER ENVIRONMENTAL IMPACT

Ships made 17,799 trips through the Suez Canal in 2011. The mere 34 journeys along the Northern Sea Route are modest by comparison.

Charles Emmerson is a 35-year-old senior research fellow for the Energy, Environment and Development Program at the Royal Institute of International Affairs (also known as Chatham House). At the request of Lloyd's, a London-based organization that sells insurance to the shipping industry, he compiled a report on the risks of developing the Arctic. He thinks it will become a key region for the transport of natural resources, but it could take 30 to 50 years.

The Bellona Foundation, a European environmental group, argues that the "true cost" of development should include the impact on the environment.

If an oil spill or other such accidents were to occur in the frigid Arctic, the sea ice would be an extremely troublesome impediment to the cleanup effort and microbes would be slow to break down the pollutants.

The Bellona Foundation's Russian-born project coordinator, Igor Kudrik, says the region is "a more sensitive environment than regular places. We should abstain from developing the Arctic." According to Kudrik, the European Parliament in Brussels is expected to hold a public hearing on the issue this fall.

(This article was written by Ichiro Matsuo and Takashi Kida.)

THE ASAHI SHIMBUN
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The Vitus Bering under construction on June 20 at Arctech Helsinki Shipyard in Helsinki (Ichiro Matsuo)

The Vitus Bering under construction on June 20 at Arctech Helsinki Shipyard in Helsinki (Ichiro Matsuo)

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  • The Vitus Bering under construction on June 20 at Arctech Helsinki Shipyard in Helsinki (Ichiro Matsuo)
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