Russian energy projects breathe life into Northern Sea Route

July 15, 2017

Heavy-lift and project carriers are developing a new market that a few years ago would have been unthinkable — the Northern Sea Route to Russia’s frigid Arctic region.

As sea temperatures warm and the polar ice cap recedes, the Arctic route has attracted heavy-lift shipments to Russian energy projects. The route is ice-free for only four months a year and remains challenging operationally, but a small band of heavy-lift carriers have been willing to accept the risks.

The Arctic market has seen “unbelievably high traffic” in the past two to three years, said Gleb Faldin, commercial manager at Hansa Heavy Lift, one of the major players in a region that opened up to the heavy-lift and project cargo shipping business only a decade ago.

The bulk of the route’s heavy-lift traffic has been linked to Russia’s $27 billion Yamal liquefied natural gas (LNG) plant, some 600 km (373 miles) north of the Arctic Circle, and a few other projects including the Tobolsk petrochemical plant.

With the Yamal project nearing completion and scheduled to deliver its first LNG later this year, heavy-lift traffic to the Russian Arctic market is set for a temporary slowdown. However, Russia hopes to develop the Northern Sea Route across its Arctic coast as a transit route that shaves 4,500 nautical miles from the voyage between East Asia and North Europe.

Several carriers have ordered vessels to operate in the region. In March, Amsterdam-based Spliethoff Group announced an order for six ice-class, multipurpose vessels with capacities of 18,000 dwt tons. The ships are scheduled for delivery from China’s Ouhua shipyard in two-month intervals beginning in January 2019.

The vessels are designed with high fuel efficiency that will permit them to operate in extremely remote places, including the Northern Sea Route, said Sander Schuman, Spliethoff marketing manager.

The Russian Arctic niche reflects a trend toward specialization in cargo vessels. “There is a definite trend in owners looking at vessels with more specific capabilities — whether this is ice-class or heavier lift or dynamic positioning systems,” said Susan Oatway, lead analyst for multipurpose shipping at Drewry Maritime Research. “It is more a need for owners to focus on something that other owners don’t have to give them a competitive edge.”

Source: Bruce Barnard, Special Correspondent