News review of the events on the NSR
#1 May 2020

1. Traffic volume on NSR in January – April 2020 amounted to 10.05 million tons

This figure increased by 4.5% compared with the traffic volume for the same period in 2019, Rosmorrechflot reported.

Earlier, the acting head of the NSR administration Nikolay Monko told TASS that moderate increase in freight traffic along the Northern Sea Route is expected in 2020.

“10.05 million tons of cargo were transported in January-April, which is 4.5% more compared to the same period last year,” the report said.

2. Project “Northern Sea Transit Corridor” takes on specific shape in 2020

The Rosatom`s cargo logistics company, “Rusatom Cargo”, has announced tenders for the creation of a simulation model of the Northern Sea Transit Corridor (NSTC) and the development of a feasibility study for the project.

Rusatom Cargo reports that one of the key objectives of these tenders is to confirm the basic technical parameters of the container line project – commercial speed, navigation time, icebreaker requirements, the required area of the terminals, the organization of a complete transit system, etc.

As part of the first stage of the technical and economic analysis of the project, world practices of container shipping will be studied, and then optimal models for the implementation of the NSTC logistics business will be developed.

At the second stage, it will be necessary to develop a comprehensive simulation model of the transport system in order to justify the optimal technical characteristics and parameters of the commercial fleet, coastal infrastructure and the NSTC route.

Then, it will be necessary to carry out the feasibility study of the project with the specification of capital costs and operating costs, as well as optimization of the main characteristics of Arctic container ship.

It is planned to complete the tendering process until mid-June of this year. The amount that Rusatom Cargo is ready to pay to developers is approximately 54 million rubles. After the completion of these studies, it will be clear how much money will be needed to spend on the project and how much these investments will be justified.

3. State Commission for Arctic Development supported expansion of NSR to Barents Sea and Kamchatka

The State Commission for the Arctic Development has supported the expansion of the Northern Sea Route to the Barents Sea and Kamchatka Peninsula.

Within the meeting framework of the State Commission for the Arctic Development led by of Deputy Prime Minister Yuri Trutnev, a discussion arose regarding plans to introduce the concept of the Northern Sea Transport Corridor, which actually extends the Northern Sea Route to the Barents Sea from the west and to Kamchatka from the east.

“Two concepts are used in the draft Strategy for the Arctic development: The Northern Sea Route and the Northern Sea Transport Corridor as a broader concept of the entire corridor from Murmansk to Kamchatka. If we want to ensure the competitiveness of the Northern Sea Route, then we must develop the borders of the corridor wider – take the western outskirts and eastern ones, creating hub ports there. Therefore, we introduced such a concept into the draft strategy, which includes the Northern Sea Route. We agreed on it with the Ministry of Transport, Rosatom and the Russian Ministry for Foreign Affairs. Neither we nor the Russian Ministry for Foreign Affairs see any negative legal consequences of using this terminology,” said Alexander Krutikov, Deputy Minister for the Development of the Russian Far East during the meeting.

Let us recall that the Northern Sea Route begins from the Kara Gate in the west and from the Bering Strait in the east. Such boundaries were determined in view of the peculiarities of international law related to the liability to freezing of the seas.

4. Rosneft builds the largest seaport in the Arctic

Rosneft will build the largest in the Arctic zone seaport “Bay North” on Taimyr Peninsula, Interfax reported.

In parallel with the construction of the port, the building of tankers will be carried out at the shipbuilding complex “Zvezda”. The initial plan involves the use of 10 vessels with a deadweight of 120 thousand tons. The oil transportation route is to Europe and Asia.

The oil transshipment terminal is scheduled to be commissioned in 2024. Its capacities will grow gradually: from 25 million tons initially until reaching full capacity (115 million tons) in 2030.

5. Trutnev: no plans to revise the shipping on the Northern Sea Route

The Russian government expects that the situation with coronavirus will not lead to an adjustment in plans for the volume of cargo transportation along the Northern Sea Route. According to the May decree of President Putin, it should be 80 million tons by 2024.

There are currently no plans to revise shipping volumes on the Northern Sea Route due to the decline in energy demand and the situation with the spread of coronavirus. This was stated by Deputy Prime Minister, Yuri Trutnev at a briefing, answering a question from RBC.

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