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<\/figure>\n<\/div>\n\n\nNikita Dobroslavsky<\/strong> is expert at the SKOLKOVO Moscow School of Management<\/em><\/p>\n\n\n\n Recently, after the development of the Arctic zone was officially defined as one of the most important strategic priorities \u2014 in the words of President Putin, this century Russia will build on Arctic \u2014 the government has started to put more emphasis on the issue. In particular, a corresponding strategy and a program for the integrated development of the Arctic zone until 2035 were developed and adopted. At the same time, the work on the development of the Northern Sea Route (NSR), as one of the key elements for the implementation of this plan, was intensified.<\/p>\n\n\n\n The interest in developing this transport route is understandable. The NSR ensures national security and the strengthening of Russia’s geopolitical presence in the Arctic. At the same time, it is also an important transport corridor, the key link in the entire infrastructure. The NSR is the shortest sea route from Asia to Europe.<\/p>\n\n\n\n Since 2014, the traffic volume on the NSR, with Atomflot and Rosatom assigned as its single operator, has been growing rapidly. During this time, it has grown around 5.5 times larger, reaching 33 million tons by the end of 2020; and according to the plan, it should grow to 80 million tons by 2024. The volume of transit last year increased to almost 1.2 million tons.<\/p>\n\n\n\n Such dynamics of cargo transportation along the NSR has so far been primarily associated with the implementation of major projects for the extraction of oil and gas, metals, ore, as well as with LNG production in the Arctic. So far, in the current conditions of navigation in the seas of the Arctic Ocean, the transport route is only cost-effective when it concerns the export of hydrocarbons.<\/p>\n\n\n\n At the same time, the high potential of the NSR is of great interest to all participants in the cargo transportation market. Leading transport companies are already carrying out test voyages and pilotage of ships, and are exploring opportunities for infrastructure development in the region. The increasing intensity of shipping adds to the attractiveness of the NSR as a transit route.<\/p>\n\n\n\n With this in mind, it is already strategically justified to develop the NSR not only exclusively for exporting natural resources from the Arctic zone or in order to allow for Severny Zavoz (Northern Supply Haul), but also for container transportation. This is especially promising, since due to the intensifying global climate change, the conditions of navigation on the NSR are likely to improve. It is expected that already after 2050, this route will become available for year-round navigation of ships without ice strengthening.<\/p>\n\n\n\n Already now, improvement of ice conditions in the Arctic allows an increasing number of vessels to complete transit along the NSR in summer and autumn. Navigation in 2019 showed that the increase in transit is due to the use of low ice class ships. This indicates that seasonal transit on the NSR is developing.<\/p>\n\n\n\n The second important factor in shipping was the reduction in the average duration of the passage through the NSR from 15 days in 2014 to 9.7 days in 2018. Based on the statistics for shipping in 2019, the average duration decreased to 9.5 days. The latter figure corresponds to an average speed of 13 mph, which is the recommended maximum speed of ships in open pack ice. Thus, as a result of development of navigation on the NSR, the passage time has come close to the optimal values and is to stay between nine and 10 days.<\/p>\n\n\n\n If we study the breakdown of transit, it is still mostly compiled of raw materials including oil, iron ore and fertilizer. However, the volume of transportation of finished goods is also gradually increasing. In particular, for three consecutive years, the NSR has been used to supply towers and equipment for wind farms in Europe.<\/p>\n\n\n\n It is planned to achieve the nearest target of cargo turnover for the NSR \u2014 which, according to the state programme, amounts to up to 80 million tons by 2024 \u2013 primarily by increasing the transportation volume of products from new mining enterprises. In particular, this is expected to happen due to the launch of the 4th line of the Yamal LNG project, which will add more than 1 million tons (NGLs, LNG) to the cargo base. Cargo traffic in the period until 2030 will be defined by the projects launched to produce LNG, by the supply of oil from the Novoportovskoye field and delivery of cargo for implementing the second wave of Arctic megaprojects. These projects include LNG production at Arctic LNG-2 and Ob LNG, as well as production of oil by Vostok Oil. At the same time, there is little certainty regarding coal projects. They are not expected to be launched in the near future without having carried out large-scale exploration works first.<\/p>\n\n\n\n When conducting assessments in accordance with the protocols of the commissions for the development of major deposits in the Arctic and interviewing subsoil users, the experts of the SKOLKOVO Moscow School of Management determined an alternative schedule for carrying out transportation through the NSR \u2013 the volume amounted to about 50 million tons per year by 2024, which is around 30 million tons below the official targets of the state program.<\/p>\n\n\n\n Such a significant difference in official and expert estimates is explained by the high risks faced by projects of industrial development of deposits and processing of raw materials in the Arctic region. On the one hand, projects in the Arctic rely on a high-quality resource base, while on the other, they are implemented in difficult climatic conditions and in remote areas with poorly developed infrastructure. They are subject to sanctions, as well as to a stricter climate regulation, and are also sensitive to fluctuations in prices on final products. Given the ambitious production plans stated, the volume of confirmed reserves is in some cases too low to ensure sufficient cargo flow in the long term.<\/p>\n\n\n\n To manage risk, companies have to make their logistics more complex. In particular, this includes using terminals where transshipment from ice-class vessels to conventional vessels is carried out. At the same time, Arctic projects receive substantial tax and administrative support from the state. The way these factors balance out will largely determine whether the plans of the mining companies can be implemented in reality.<\/p>\n\n\n\n The concept of the NSR development is to implement a comprehensive project with an international status. The new route has to become competitive in terms of global logistics. This is a conceptual requirement for the Sevmorput National Project, with the total cost of 735 billion rubles, including budget funding of 274 billion rubles.<\/p>\n\n\n Modernization and creation of new infrastructure in the Arctic region is one of the prerequisites of its success. This includes ports, bunkering infrastructure, navigation services, and emergency response infrastructure. In particular, the plan provides for the development of the two main ports of Pevek and Sabetta in the period up to 2021 and the development of port infrastructure to match the pace of industrial development in the Russian Arctic. The specter of activities includes activities in the field of personnel training, provision of medical care and medical evacuation. Measures to stimulate transit cargo traffic include development of hub ports outside the NSR: the ports of Murmansk and Petropavlovsk-Kamchatsky, and justification for establishing a container operator. According to the plan, the latter will provide not only transit, but also multimodal transportation for domestic needs.<\/p>\n\n\n\n To provide energy for industrial projects, it is planned to develop a single database of projects with technological and energy parameters. The energy capacities that ensure the development of the NSR can be based on using LNG and methanol, as well as renewable energy sources.<\/p>\n\n\n\n The infrastructure development plan includes ensuring environmental safety during navigation and port operations in the waters of the NSR, providing comprehensive monitoring of the lithosphere, cryosphere, atmosphere, and hydrosphere. <\/p>\n\n\n Consolidating the infrastructure of the NSR as a single complex will ensure a high level of digitalization of shipping, with accounting for weather conditions, ice situation, and allow for organizing safe and fast shipping routes in the Arctic. The Kapitan system by Gazprom Neft can serve as an example. The system identifies the optimal route based on weather and climate conditions, as well as on the analysis of satellite images of the ice situation. Artificial intelligence elements can help build optimal routes for navigation, which will reduce fuel consumption and environmental impact, choose the most efficient fleet structure, and ensure the safety of navigation. As a result of digitalization of oil export from the Prirazlomnaya platform and the Novy Port field in the Barents Sea, the unit cost of exporting one ton of Arctic oil has decreased by 10%.<\/p>\n\n\n\n Another prerequisite for achieving the goals of the NSR development program is creating a modern fleet with new Arctic-class vessels as its basis. The fleet operating in the region is not able to meet the set goals and needs to be replaced or modernized as soon as possible. According to the data of the classification society known as the Russian Maritime Register of Shipping, there are 439 vessels of all classes registered in the Arctic ports of Russia, most of which are 20 or more years old.<\/p>\n\n\n\n In the operating Arctic fleet, the predominant number of vessels are relatively small in size with a deadweight of up to one thousand tons. Only two vessels have a deadweight of over 100 thousand tons, these are Umba and Natali tankers. At the same time, almost all of them use fuel oil and diesel as ship fuel. Thus, to ensure the export of manufactured products using the NSR, it is necessary to build a new Arctic fleet, which in order to allow for year-round navigation in the Arctic must have vessels with an ice class of at least Arc4.<\/p>\n\n\n\n The adopted program for the development of the NSR implies constructing various types of vessels. They include rescue and auxiliary fleets, hydrographic vessels, container ships and cargo ships, some of which use LNG as fuel. <\/p>\n\n\n\n Building a modern icebreaker fleet is an extensive programme of its own. Moreover, the industrial development of the Arctic requires not only a significant increase in the number of icebreakers, but also in their size and capacity. For this purpose, the enterprises of the Baltic Shipyard (part of the United Shipbuilding Corporation) are currently building three icebreakers of Project 22220: Arctic, Siberia, and Ural. However, full-fledged navigation along the Northern Sea Route will be possible only after the commissioning of three nuclear-powered Leader icebreakers, which were ordered to the Zvezda shipyard in the Far East, managed by Rosneft.<\/p>\n\n\n\n Despite a number of objective difficulties, the government is assessing the potential of transit shipping on the NSR, which in the future may capture a share of the world’s cargo sea traffic that is now associated with traditional routes. The infamous incident of a week-long obstruction of the Suez Canal due to the grounding of the container ship Ever Given in March this year once again revived interest in such alternatives.<\/p>\n\n\n\n To this day, several test voyages along the NSR took place, during which a number of major global transport companies evaluated the prospects of this route for carrying out transportation. According to the results, it is clear that in its current form, the NSR cannot yet fully meet the requirements they impose. In particular, Maersk, a leading Danish company, after the test voyage of the Venta Maersk container ship, claimed that transportation on the NSR was futile, since it did not provide opportunity for year-round transit. In turn, Sovfracht also expressed serious doubts about the possibility of organizing regular container transportation. The main reason is named to be the unpredictable weather conditions. Due to the risks of shipping in the Arctic, some major shipping companies have claimed they refuse to use the Arctic lines.<\/p>\n\n\n\n Despite this, Rusatom Cargo, a subsidiary of Rosatom, is evaluating developing an Asia-Europe container line within the Northern Sea Transport Corridor (NSTC) project. It was in 2020 that the «Fundamentals of the State Policy of the Russian Federation in the Arctic for the Period up to 2035» officially documented a change in the role of the NSR from a national transport communication to a competitive international line.<\/p>\n\n\n Due to the fact that year-round transit will not be possible without forming an icebreaker fleet with at least three icebreakers of the Leader class, until 2030, transit schemes for the NSR can develop with the emphasis on seasonal transit. According to its terms, cargo can be transported between ports in Europe and Asia and does not require mandatory transshipment in Russian ports to ice class vessels.<\/p>\n\n\n\n In contrast to the volume of export of industrial products, choosing transport volumes as a parameter for the development of the NSR is a simplified approach that can lead to serious structural distortions. With seasonal transit, there is a question of economic interest for the Russian Federation, since ships transit through the NSR without using ice-routing services and the ports. At the same time, Russia remains responsible for ensuring the safety of navigation and eliminating the consequences of possible accidents. Thus, there is an issue of determining the revenue centers that will ensure the economic feasibility of the development of transit through the NSR.<\/p>\n\n\n\n Atomflot plans to establish a ship operator for shipping on the NSR. A fleet of high ice-class vessels allows to expand the operator’s activities geographically from the NSR to high latitudes. That is, it allows for creating a latitudinal operator that will carry out its activities depending on the season: on the NSR in winter and on the Northwest Passage in summer.<\/p>\n\n\n\n It is important to remember that the current requirements for the NSR as a transit route for foreign customers concern more aspects than merely the cost and time of cargo transportation. The scale of environmental and climate impact is becoming an increasingly important factor. Moreover, such requirements are put forward not only by customers and cargo owners, but even by financial organizations that provide for their operations.<\/p>\n\n\n\n In any case, if the NSR operation is properly organized, the stricter requirements to the environmental aspects of transportation imposed by the world community can become an additional advantage to this route. The transit potential of the NSR is associated with the ability for shipowners and their customers not only to deliver cargo in a shorter time, but also to reduce specific emissions of pollutants and greenhouse gases. An additional benefit may consist in using cheaper marine fuels, including those with a reduced carbon footprint such as, for example, LNG. The development of transit through the NSR will provide conditions for the modernization of the port infrastructure and for the creation of a modern Russian fleet, as well as specialized national Arctic logistics operators.<\/p>\n\n\n\n Having done all this work, Russia will obtain a new technological tool suitable not only for successful competition in the modern world, but also for the development of its own economy and territories. This way the theory of growing with the Arctic will translate into practice.<\/p>\n","protected":false},"excerpt":{"rendered":" The Arctic is a strategic region, and its development finds itself among the main priorities of Russia for the coming decades. The Northern Sea Route is one of crucial pivots of the whole plan, serving as a new transport alternative for trade between Asia and Europe. To build on the Arctic effectively a modern Arctic fleet and an Arctic shipping system will be required.<\/p>\n","protected":false},"author":2,"featured_media":2130,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[945],"country":[179],"authors":[],"class_list":["post-2128","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry","tag-945","country-russia"],"acf":[],"yoast_head":"\n![\"\"](\"http:\/\/bricsmagazine.com\/en\/wp-content\/uploads\/sites\/2\/2025\/05\/arc-1024x628.jpg\")
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<\/figure>\n<\/div>\n\n\nAmbition Vs. Reality<\/strong><\/h2>\n\n\n\n
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<\/figure>\n\n\n\nInfrastructure of the North<\/h2>\n\n\n\n
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<\/figure>\n<\/div>\n\n\nTankers and Icebreakers<\/h2>\n\n\n\n
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<\/figure>\n\n\n\nOn the terms of transit<\/h2>\n\n\n\n
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