Arctic Maritime routes – realities and prospects

The Arctic region is a focal point for contemporary challenges, and in recent years has been subject to a great deal of media attention – legitimate in terms of climate change, often exacerbated in terms of tensions between riparian states since the invasion of Ukraine, over-optimistic in terms of the potential of a Northern Sea Route as a competing alternative to current routes, and erroneous in terms of a supposedly relentless race for hydrocarbon resources.

With global warming four times faster at the poles than on the rest of the planet, the Arctic polar waters are potentially increasingly accessible to maritime traffic over longer and longer summer periods. Cited as a sentinel of global warming by the IPCC, climate disruption suggests that in the decades to come, summer shipping between July and October will be mostly ice-free, particularly along the Russian coast.

The winter twilight period between November and March beyond 60 degrees latitude remains free of sunlight, allowing the sea to freeze over and rebuild the ice pack. No climate model predicts that the sea ice will melt in winter, nor that its extent and thickness will be the same in winter.

While the advertised time, distance, and cost savings of 30-40% on a route between northern Europe and northeast Asia are heavily touted, optimism about what technically appears to be the new “white Panama” must be tempered by the seafarers who must navigate these routes.

Polar routes are only really interesting in terms of distance if the planned transits are from North China or South Korea to Northern European ports. For just-in-time container traffic from the world’s largest ports in South China and Singapore, i.e. regular lines (mainly container freight) where transit times must be imperatively kept due to reserved quay times, slots in the Panama locks or passage through Suez, transit via the Suez Canal remains the shortest route.

Constrained passages

Meanwhile, the North-East route along the Russian coast offers the greatest potential for shortening distances between Europe and Asia, and thus for cost savings: 30% shorter distances between Chinese and European ports, 30% shorter voyage times, 30% lower operating and bunker (fuel) costs. However, these savings must be taken with caution. They are valid only for a period of less ice, from 4 to 5 months of the year. The growth in maritime traffic in the Arctic is directly linked to the exploitation of Russian hydrocarbon resources, in particular LNG and oil, and to a lesser extent to the exploitation of mineral resources.

The Northern Sea Route (NSR) is the portion of the North-East Passage (which reaches from the Bering Strait to the Norwegian Sea for a complete transit along the Russian coast) that freezes over in winter (from the Bering Strait to the Kara Strait). It is regulated by the Russian NSR Administration, the NSRA. Given the many limiting factors associated with navigation in the polar zone, the NSR is increasingly unattractive, if not entirely unappealing, for time-critical journeys:

• There are numerous straits to be crossed, the shallowest of which is no more than 13 metres deep, and areas that are still poorly charted.

• Transit along the North-East route is subject to authorisation.

• The escort of a Russian icebreaker is compulsory for ships that do not have an ice category allowing them to transit alone. The cost of a transit is estimated at around $5 per tonne, which is only slightly less than the overall cost of a transit through the Panama or Suez Canal.

• Higher insurance costs in polar zones

• Lower transit speed due to drifting ice and often poor weather conditions.

• The width of the channel left by the escort icebreaker does not exceed 30 metres, limiting the size of cargo ships to 100,000 tonnes.

Just as the Canadians are trying to limit the promotion of a sea route along their coasts for obvious reasons of environmental protection, Russia is encouraging foreign investors to come and benefit from the opening of the North-East Passage and the infrastructure developed to secure this sea route.

Russian ambitions

Russia’s priority is to ensure year-round safe transit for ice-breaking tankers specialized in transporting liquefied natural gas (LNG) from the Yamal LNG plant on the Yamal Peninsula to Europe and Asia.
Russia’s ambition for the Northern Sea Route (NSR) is to grow from 34 million tonnes in 2022 to 200 million tonnes a year by 2040. This growth will depend on the development of numerous hydrocarbon extraction and mining projects in Western Siberia.

Russia’s calculation is based on the current and future capacities of the twenty or so projects located around the Northern Sea Route. These include the Yamal, Gydan and Taimyr peninsulas in Western Siberia. Yamal LNG produces 20MT, while Arctic LNG2 will produce 21MT, Vostok Oil will deliver 100MT by 2030, Aeon 30MT, Murmansk LNG 20MT together with local ore and oil traffic from Novy, Varenday and Prirazlomnaya, bringing the total to 200MT.

Although LNG is not subject to sanctions, oil and coal are. Yet oil and coal have found new markets in Asia. At present, China and India, not to mention Japan for gas, have virtually taken over the quantities of oil purchased by Europeans.

It remains to be seen whether all the projects announced will be completed and will produce the desired output. It all depends on demand, global growth and other economic factors. There are doubts about LNG capacity, with Qatari and US projects set to flood the market with cheaper gas than what is produced in the Arctic.

Russia is providing the means to achieve this, with an unprecedented program to build nuclear escort icebreakers that will ensure year-round traffic from 2024 onwards. Its ambition is to consolidate the organization of the NSR, over which it wants to retain strict control.

Clearly aware of the potential offered by the NSR by the end of this decade, Russia is coordinating numerous projects, often accompanied by Chinese investment, to set up hubs at the ends of the NSR, initially to unload hydrocarbon shipments from the Yamal, Gydan and Taymyr peninsulas, but also to build quays for container shipping if this becomes profitable.

On the verge of a promise

Major container shipping companies such as Maersk, MSC and CMA-CGM are currently showing little interest in these routes, due to their seasonal nature and the current model of optimizing mass transport on giant container ships.

Even if a very strong growth in traffic volume is reported, due to the increase in voyages to the Yamal Peninsula’s fleet of tankers and LNG carriers bound for Europe or Asia, let’s put current NMR traffic into perspective. The number of transits along the entire route is still very low, at around 30 ships per season, which is barely equal to the daily volume handled by the Suez Canal.

The shortest transpolar route between the Pacific and Atlantic oceans, which passes close to the North Pole, is not envisaged before 2050, when projected melting of the pack ice could mean an intermittent ice-free summer. It could be opened in the next few decades, and under these conditions would be of new interest to on-time travel traffic.

Hervé Baudu

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The Northern Sea Route after one year of conflict in Ukraine