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Jan 19, 2022
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Suez-2 Russia will not pull: “Northern Sea Route” failed Putin

Suez-2 Russia will not pull:

Photo: Lev Fedoseev/TASS

Head of Rosatom Alexey Likhachev said that 20 ships were blocked in the ice of the Arctic at the end of 2021 due to inconsistency with the Ministry of Transport, so the administration of the Northern Sea Route (NSR) should be completely transferred to the state corporation.

Rosatom became the infrastructure operator of the NSR in 2018. It was assumed that the state corporation would take a number of functions from the Ministry of Transport and would be responsible for shipping, navigation, ports and energy, but the Ministry of Transport opposed the reduction of its powers. The department managed to retain the right to issue permits for the passage of ships along the Northern Sea Route, and the functions of developing infrastructure along this route were transferred to the nuclear monopoly.

In practice, it turned out that such a separation of duties sometimes leads to unpleasant consequences. On November 19, it became known that a “traffic jam” had formed on the NSR – a convoy of ships with northern deliveries was sent without icebreaking escort and was blocked in severe ice conditions. As Likhachev said in an interview with RBC, Rosatom learned about this almost from the media. After the emergency, three icebreakers had to be sent urgently to get the ships out of the jam, and for this they were removed from other work agreed with private companies, for example, NOVATEK and Norilsk Nickel. As a result, the caravan was withdrawn only on December 7th.

Despite this incident, which demonstrated the complexity of using the Northern Sea Route, Rosatom is convinced that by 2035 it will be able to become a full-fledged national and international transport corridor that will compete with the route through the Suez Canal. Transit from Europe to Asia via the NSR, according to experts of the state corporation, will be 19 days faster and 20-25% cheaper.

By 2024, cargo traffic along this highway should more than double, to 80 million tons per year, according to the May decree Vladimir Putin from 2018. In 2021, cargo traffic amounted to 34.85 million tons. It can be increased due to NOVATEK’s projects for the production of liquefied natural gas (LNG), Vostokugol Roman Trotsenko and the new megaproject of Rosneft, Vostok Oil.

The Free Press also wrote about the company’s construction Trotsenko the new port “Indiga” on the Barents Sea, which will be designed for 80 million tons of cargo per year, and the construction of a railway to it.

Foreign experts assess the prospects for the Northern Sea Route less optimistically. Director and Scientific Supervisor of the Institute for Shipping Economics and Logistics in Bremen Burkhard Lemper believes that production costs on the northern route are significantly higher than on the southern route. Icebreaking cargo escort significantly increases the cost of transit, in addition, the speed of container ships decreases, so that although the length of the route is reduced, the time spent on the road increases, and each day of work of such vessels is very expensive.

Associate Professor of the Department of Oil and Gas Trading and Logistics at Gubkin University and the Department of Legal and Customs Regulation of Transport at the MADI, Ph.D. Andrey Golubchik believes that the development of the Northern Sea Route is promising, but it is necessary to realistically assess its potential.

— The Northern Sea Route is our political fetish, our national fixed idea. In addition to the fact that in the Soviet years we traditionally provided this way for the small population that lived there, about 15-20 years ago we began to talk about the fact that this is a transit route that could compete with the Suez Canal.

Of course, in fact, there can be no talk of any competition, but about the transportation of goods – quite. We see that traffic volumes are regularly growing. But the transit that our transport theorists dream about is impossible, because it is illogical to drive expensive cargo along the heavy, very complex and not always predictable northern route. To do this, you need to be either a very big optimist, or not be friends with your head.

Nevertheless, the volume of cargo transportation in this region is. It is increasing, especially with the NOVATEK story, the development of the Yamal LNG project and the port in Sabetta. If the Indiga port begins to function, this is another plus in this piggy bank. So the route is quite working.

Technologically, the work of the Northern Sea Route is provided by the icebreakers of Rosatomflot. They are the most powerful, there are simply no others like them. Rosatom orders the construction of new icebreakers for these projects, this is a serious procedure. And for a very long time, it was they who completely administered all traffic along the NSR.

But a few years ago, the Ministry of Transport suddenly remembered its regulatory functions, stamped its foot and wanted to also participate in this story. Now issuing permits for passage along the Northern Sea Route is the prerogative of the Ministry of Transport. What happened in November is a consequence of this division of responsibility.

I’m not afraid to say that there are very few professionals in the Ministry of Transport. Their number steadily tends to zero. But there are many managers and other ambitious comrades. No wonder, because the issuance of permits is a serious and important job, and there are many who want to do it. In the end, we got what we got.

All this should definitely be in the same hands. Whose exactly, I’m not ready to say. But I would like to note that Rosatomflot is currently carrying out all the technological work, this is a structure of Rosatom.

“SP”: – But the development of the Northern Sea Route has prospects?

– Undoubtedly. True, we must understand that escort by icebreakers is very expensive. But the more ships move along this route, the cheaper the passage of one ship will cost.

Today, shipowners, especially foreign ones, are scared off by the fact that we have few icebreakers and it is not clear whether they will be able to ensure the passage of the route. To which we reply that we will build icebreakers, but we need cargo traffic. This is a vicious circle, and it can be broken only by demonstrating a real desire to work in this direction.

Rosatomflot is doing this work today. You can go to the company’s website and see information about existing icebreakers, about plans to upgrade the icebreaker fleet.

The fuel and energy complex has a serious interest in creating a transshipment hub for liquefied gas in Kamchatka. Then the logistics for the export of LNG from Sabetta will be simplified. A lot of interesting things are planned there, but all this is closely connected with the functioning of the NSR.

Therefore, the Northern Sea Route is a promising topic. It has the right to both political and commercial existence. But there will be no unambiguous Suez Canal even by 10% here.

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