Opinions

NSR Development Scenarios Reconsidered

 

Previously, targets for the development of the Northern Sea Route aimed at grandiose figures. Based on the current situation, Rosatom has described new positive and negative scenarios for the Route. Both are more moderate compared to the targets set by the Government.

Rosatom icebreaker
Photo: Rosatom

The 2022 plans included transportation of 224.96 million tonnes by 2031. The structure of cargo turnover was as follows:

  • Vostok Oil: 100 million tonnes;
  • Novatek’s LNG projects:
    • Arctic LNG-1: 21 million tonnes;
    • Arctic LNG-2: 21.4 million tonnes;
    • Yamal LNG: 19.5 million tonnes;
  • Syradasaysky coal deposit (Taimyr): 12 million tonnes;
  • ‘Other’ cargoes: 39.89 million tonnes, including supply and transit cargoes.

It was planned that the increase in cargo turnover would primarily come from the ‘other’ cargoes category. In 2023, transit cargoes reached a record figure of 2.35 million tonnes.

New scenarios do not provide such a structured display for current targets, and Rosatom has yet to provide additional commentary on the issue.

New Scenarios

There are two scenarios that assess the future development of the NSR. The basic scenario accounts for negative conditions and aims for the following targets: 117 million tonnes in 2031 and 150 million in 2035.

The positive scenario aims to achieve a turnover of 150 million tonnes by 2031 and 192 million tonnes by 2035.

This year’s results were also moderated—36 million tonnes instead of the expected 80.

Obstacles

Overall, the expert community in Russia was initially quite sceptical about achieving such goals. According to some, a correction of figures was required at the first stage of plan development, as it did not account for sanctions:

Target setting should take current conditions into account: the state of the resource base, its commissioning for development, production capabilities, and availability of freight, port, and icebreaking vessels. — Mikhail Grigoriev, Director of a consulting company GECON.

As it stands, several obstacles have hindered progress towards achieving previously set targets:

Firstly, from a technical standpoint, the lack of Arc7 class vessels is considered the main challenge to achieving year-round navigation on the NSR. The failed supply of LNG-carrying vessels to Arctic LNG-2 and subsequent uncertainty are key contributors to this issue. 

The construction of Arc7 vessels in Russia, according to RBC, requires more than six years.

Secondly, infrastructure in the North is still not ready for such volumes of turnover. Practically all measures taken for the development of the North point to the need for infrastructure connections to the NSR: e.g., multimodal river hubs, additional investment, and inclusion of a special status for ‘support settlements’.

Finally, a primary consequence of sanctions is the decrease in bulk cargoes and oil exports, which have been partially compensated by record-breaking LNG exports.

What’s Next?

Still, the primary goal remains achieving year-round navigation that is more regular, predictable, and safer on the Route. Rosatom certainly aims to increase its icebreaker fleet—both nuclear and non-nuclear—to further minimise seasonal dependence on ice conditions.

There is also potential for expanding the NSR to the Baltic Sea, utilising the infrastructurally developed ports of Kaliningrad and Saint Petersburg; however, currently, the idea of a ‘Big NSR’ has not been realised and remains in discussion.

The Editorial Board of the Arctic Century

23.09.2024