23 Oct 2023 11:00

Russian ministry drafts three forecasts for Northern Sea Route shipping, incl. conservative one - paper

MOSCOW. Oct 23 (Interfax) - Russia's Far East Development Ministry has drawn up three scenarios for the development of cargo shipping along the Northern Sea Route (NSR) to 2030, with an outlook to 2035 and the draft report to the government is now going through the approval process at other ministries.

The baseline scenario assumes that the key anticipated cargo shippers - Rosneft's Vostok Oil project and Novatek's Arctic LNG 2, Arctic LNG 1 and Obsky LNG projects - will carry out their plans and will not face a shortage of icebreakers and infrastructure capacity, national daily Kommersant reported on Monday. In this case, cargo traffic along the NSR will grow to 74 million tonnes in 2024, 224 million tonnes in 2030 and 230 million tonnes in 2035, and oil and liquefied natural gas (LNG) will account for up to 75% of this traffic.

In this scenario, traffic figures will be most affected by Vostok Oil, which is supposed to start shipping 30 million tonnes of oil per year in 2024 and increase this figure to 100 million tonnes by 2030. This scenario also anticipates 30 million tonnes of transit cargo traffic along the NSR by 2030.

The optimistic scenario sees traffic along the NSR growing to 81 million tonnes by 2024, 244 million tonnes by 2030 and 288 million tonnes by 2035. The additional growth would be generated by Novatek's future Arctic LNG 1 and Arctic LNG 3, 12.3 million tonnes of LNG from the Yurkharovneftegaz project, and the projects to develop the Syradaiskoye deposit and Taimyr coal basin of tycoon Roman Trotsenko's Aeon. It also takes into account Gazprom's cancelled project to produce LNG at the Shtokman fields in the Barents Sea, traffic from which is projected at 17 million tonnes in 2028 and 50 million tonnes in 2035.

Gazprom refrained from commenting on this, while Novatek did not respond to questions, Kommersant said.

The conservative scenario assumes that Novatek will abandon the Obsky Gas Chemical Complex and Arctic LNG 1 projects due to sanctions, while a number of other projects, including Vostok Oil, will be postponed or reduced in scale. In this case, cargo traffic along the NSR is expected to grow to 117 million tonnes in 2030 and to 131 million tonnes by 2035, with transit traffic totalling 38 million tonnes per year.

Transit traffic along the NSR is expected to total 4 million tonnes this year and grow to 7 million tonnes in 2024 thanks to the rerouting of coal shipments through the Lavna terminal in Murmansk Region.

The report also cites Rosatom, which believes that transit traffic along the NSR can be increased by 2030 through bilateral agreements with foreign partners to ship up to 50 million tonnes of cargo to China, 10 million tonnes to South Korea, 5 million tonnes each to Japan, Vietnam and India, and up to 3 million tonnes to Thailand. The icebreaker fleet for escorting vessels through the NSR is expected to consist of eight nuclear and three non-nuclear icebreakers in 2024, and respectively nine and five in both 2030 and 2035.

By 2035, the eastern sector of the NSR might need an additional three LK-60 icebreakers and one more Leader-class icebreaker, the report said. "Thus, the shortage of icebreakers by 2035 will be at least four units," Kommersant said, citing the document.

However, budget funding for construction of icebreakers in 2024-2026 has been cut by 6.26 billion rubles for the Leader and by 4.64 billion rubles for the three LK-60 icebreakers. This will prevent the icebreakers from being put into operation within the contractual timeframe and might also lead to the "failure to achieve the goals of the Year-round Northern Sea Route initiative," the report said.

The paper reported Rosatom as saying that the delivery deadlines for the icebreakers are governed by government regulations and state contracts and that "no changes to these documents" have been made.