Russian Arctic: new sea routes and access to natural resources


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Moored off the small arctic town of Pevek is the Akademik Lomonosov – the world’s first floating nuclear power plant and a sign of how Russia’s plans for the Far East are taking shape. It’s part of Moscow’s plan to open a major shipping lane across the Arctic and put natural resources at their fingertips, Financial Time writing.

The port of Pevek is ice-free for only four months a year, but is destined to become a hub for commercial shipping on the so-called Northern Sea Route as climate change gradually eases passage through the Arctic. And the energy supplied by Akademik Lomonosov is intended to help Pevek become a gateway to Chukotka, a region close to Alaska rich in gold, silver, copper, lithium and other metals. “Without the NSR, without the port, there would be no Pevek,” said Maxim Zhurbin, deputy mayor of Pevek, in an interview in the city in October.

Few of those in Pevek seem concerned with the port’s nuclear reactor. “Fear? We don’t have one. Maybe the Russians aren’t afraid of anything anymore. We’ve seen and lived it all. We have to be optimistic,” said Igor Ranav, a locally born businessman. . “We have been told that the factory is made with the latest technology and that it is safe, and I hope so.” “It is excellent that it is here,” said Natalia Koveshnikova, an accountant at the retiree who has lived in Pevek most of his life. “This is the first year that we have heat and hot water all year round.

The development of the NSR is in the hands of Rosatom, the state nuclear company. In addition to commissioning the Akademik Lomonosov, Rosatom is also in charge of nuclear-powered icebreakers which the company says will open up Arctic shipping year-round by the middle of the decade. .

Rosatom has not disclosed how much it is investing, but insists its Arctic businesses will be profitable. “For us, it’s mostly business. And by creating the conditions for the projects now, we are basing it on the viability of the investment, ”said the head of Rosatom, Alexei Likhachev.

After fully ramping up by 2023, the Pevek nuclear power plant is expected to power several resource projects, including Mayskoye, a gold mine developed by UK miner Polymetal, and Pyrkakay, one of the largest deposits in tin of the country.

Rosatom plans to install four more floating nuclear power plants by the end of the decade in Chaunskaya Bay to supply electricity to the Baimskaya copper mining project. The large deposit – a metal currently in great demand for use in renewable energy technologies – was discovered in Soviet times, but a lack of technology, equipment and infrastructure delayed its development.

“The project is in the middle of nowhere. There is no electricity, no roads, no access, ”said Oleg Novachuk, managing director of Kaz Minerals, the miner in charge of the $ 12 billion project, which is expected to start production from by 2028. With the floating reactors, the project will have a source of energy at predictable costs for about 60 years.

Developing Chukotka with the rest of the Arctic has long been a goal for Putin and Russia, who are hosting a plenary meeting of the Arctic Council this week, where all eight countries in the region are represented. “Russia should expand across the Arctic because that’s where it has its main mineral resources,” Putin said in 2017, when Russia first produced liquefied natural gas in the Arctic. Arctic and exported it via the NSR.

NSR shipments have grown from 1.5 million tonnes in 2000 to 33 million tonnes last year, mostly of gas and oil. Volumes are expected to reach 80 million tonnes in 2024.

Rosatom expects the volume of all Russian exports transiting by road to reach 110 million tonnes over the next decade, while also attracting international transit, which it believes will start around 2025 and reach at least 30 million tonnes in 2030.

Rosatom believes that the shutdown of the Suez Canal this year, when trade was disrupted by a stranded container ship, strengthens its case for the NSR. He indicated that the route is often shorter and therefore can be competitive despite the need to hire icebreakers to escort ships in winter.

For example, a trip from Busan in South Korea to Rotterdam in the Netherlands would take 27 to 28 days via the NSR compared to 40 days via the Suez Canal, according to Rosatom. “Twelve days of difference, when you ship goods worth $ 1 billion, that’s a huge number,” said Kirill Komarov, first deputy director of Rosatom.

DP World, the UAE’s logistics company and port operator, became the first international company to sign an NSR transit partnership agreement with Rosatom in July, pledging a $ 2 billion investment in its infrastructure and additional fleet .

The coronavirus pandemic, which has disrupted global supply chains, also shows the need for more roads, said Sultan Ahmed bin Sulayem, managing director of DP World. Managing an efficient year-round expedition remains a challenge for Rosatom, although global climate change is playing a role. Over the past 40 years, the Arctic ice cap has shrunk by half during the warmest September and by 10% during the coldest March, according to the Arctic Research Institute and the ‘Antarctic. By mid-century, the institute expects ice levels to drop another two-thirds in summer and halve in winter.

Warming oceans should help reduce shipping costs. Less ice means less icebreakers and faster trips. Still, weather forecasting and winter ice safety remain an issue, particularly in the eastern portion of the NSR. Ice blanketed the Arctic seas earlier than expected in November and trapped 24 ships. Likhachev of Rosatom attributed the situation to inaccurate weather forecasts, increased demand for the route and changing shipping times due to the pandemic.

Meanwhile, the people of Pevek have the rare feeling of being part of a growing economy. “We have arrived in a dark city. For the first two years, life faded here, people were leaving and there were rumors that the city would be closed, ”said Pavel Rozhkov, a computer scientist who came from Moscow nine years ago. “Then came the news that they would build a floating nuclear power plant. . . big investments began to flow into the city, the city began to develop.

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