ECONOMIC DEVELOPMENT OF THE ARCTIC ZONE OF RUSSIA

THE FORECAST OF FREIGHT TRAFFIC

AND TASKS FOR SHIPBUILDING

MIKHAIL GRIGORYEV
GECON

12th ARCTIC PASSION SEMINAR

March 2 , 2017, Helsinki
 ARCTIC SUPPORT ZONES

1.Kola 2.Arkhangelsk 3.Nenets 4.Vorkuta 5.Yamal-Nenets 6. Taimyr-Turukhansk 7.North Yakutia 8.Chukotka

The support zone is primarily a project of planning regional development in the Arctic zone where, in order to ensure
socio-economic development and national security, a whole set of tools for regional development (territories of
priority social and economic development, free port, free economic areas and special economic zones) and
mechanisms of implementing investment projects (including infrastructure ones), among which are those of private-
public partnership, have to be used in a synchronous and interconnected way.
2 Source: Ministry of economic development
DEVELOPMENT OF MINERAL RESOURCES - THE DRIVER OF THE ARCTIC

3 4+ 5 6

7 8 1.Kola
2.Arkhangelsk
3.Nenets
4.Vorkuta
5.Yamal-Nenets
6.Taimyr-Turukhansk
7.North Yakutia
8.Chukotka
3 Source: Ministry of economic development
MINERAL PROJECTS PILLARS OF THE SUPPORT ZONES

4 GECON
5
MILLIONS OF TONS

0
1
2
3
4
5
6
7
8

1933
1935
1937
1939
1941
1943
1945
1947
1949
1951
1953
1955
1957
1959
1961
1963

TRANSIT
1965
1967
1969
1971
1973
1975
1977

INTERNAL
1979
1981
1983
1985
1987
6.6

1989
TOTAL

1991
1993
1995
1997
1999
1.5

2001
2003
2005
2007
2009
2011
DYNAMICS OF THE TRANSPORTATIONS ALONG THE NORTHERN SEA ROUTE

2013
7.5

2015
Data sources: Plaksiy, Mikhailichenko, NSRA, analysis of GECON
NORTHERN SEA ROUTE LEGISLATIVE DEFINITION

The area of the Northern Sea Route means a water

area adjoining the northern coast of the Russian
Federation, including internal sea waters, territorial
sea, contiguous zone and exclusive economic zone of
the Russian Federation, and limited in the East by the
line delimitating the sea areas with the United States of
America and by the parallel of the Dezhnev Cape in the
Bering Strait; in the West, by the meridian of the Cape
Zhelanie to the Novaya Zemlya archipelago, by the east
coastal line of the Novaya Zemlya archipelago and the
western limits of the Matochkin Shar, Kara Gates,
Yugorski Shar Straits.

The Federal Law of July 28, 2012, N 132-FZ " On Amendments to Certain Legislative Acts of the Russian Federation Concerning State
6 Regulation of Merchant Shipping on the Water Area of the Northern Sea Route (Source: http://www.nsra.ru)
NORTHERN MARITIME TRANSPORT CORRIDOR

The Northern Maritime Transport Corridor is formed by water areas of the seas of the Arctic zone of the Russian Federation
and the navigable rivers flowing into them.
7 GECON
 DYNAMICS OF THE MAIN TRANSPORTATIONS
ALONG THE NORTHERN MARITIME TRANSPORT CORRIDOR
20

18
18

16

14 13 OTHER CARGOES
13
PELYATKINSKOE (COND.)
MILLIONS OF TONS

12 PESCHANOOZERSKOYE
10 SANDIBINSKOTE
10 9
10 PRIRAZLOMNOYE
8 NOVY PORT
8
8 7 7 VARANDEY
6 CRUDE OIL
6
6 TOTAL
4 TRANSIT
4 3

Export of the mineral resources defines

2
development of the Arctic shipping, at the
0 same time the role of hydrocarbons is
2010 2011 2012 2013 2014 2015 2016 dominating.
8 Data sources: NSRA, compnies, FCS of Russia; analysis of GECON
THE MARKETS OF THE RUSSIAN ARCTIC OIL AND CONDENSATE IN 2012 - 2016

Latin America

Mediterranean

MILLION TONS
Other Western
10 Europe
Finland

Great Britain

Netherlands

0
2012 2013 2014 2015 2016
9 Data sources: FCS of Russia, analysis of GECON
THE FORECAST OF THE ARCTIC SEA FREIGHT TRAFFIC OF HYDROCARBONS
(7 PROJECTS APPROVED FOR DEVELOPMENT)
. 40

35

30

25
MILLION TONS

20

15

10

0
2016 fact
2017
2018

2020

2022

2024

2026

2028

2030

2032

2034
2035
2036
2037
2038
2039
2019

2021

2023

2025

2027

2029

2031

2033

2040
Varandey oil Prirazlomnoye oil Novy Port oil&cond Pelyatkinskoye cond
Pechanoozerskoye oil Sandibinskoye oil Yamal LNG cond Yamal LNG
10 Data sources: Rosnedra; analysis of GECON
ASSESSMENT OF POSSIBLE NEED FOR MARITIME SHIPBUILDING
CRUDE OIL Operating projects
Varandey, Prirazlomnoye, Pelyatkinskoye (condensate Dudinka) are provided with specially constructed
tanker fleet.
Peschanoozerskoye (Kolguyev Island) and Sandibinskoye - use the freighted vessels, small shipment value.

Novy Port field: the operating experience of tankers of the Shturman Albanov series showed that the sizes
of cargo batches less than planned and six vessels won't provide export amounts; the construction of two
more vessels is necessary.
11 Data sources: companies; analysis of GEON
ASSESSMENT OF POSSIBLE NEED FOR MARITIME SHIPBUILDING
LNG Projects
.Under construction
Yamal LNG: construction of 15 gas carriers of the class Arc7 goes according to the plan, but involvement of 11 more vessels
of the ice class Arc4 is necessary (contracted 7 6 constructed and 1 in construction; 4 vessels aren't defined obviously
that construction will be required).

Declared projects
Arctik LNG: the cargo fleet equal to Yamal LNG, the port fleet and construction of the bases for placement of the plant on
the water area of Gulf of Ob is necessary (shipyard in Murmansk). Ice-class heavy carriers for the project of Yamal LNG can
be used.
Pechora LNG technical solution isn't defined
12 Data sources: companies; analysis of GEON
ASSESSMENT OF POSSIBLE NEED FOR MARITIME SHIPBUILDING
ORE CONCENTRATE AND COAL
. Operating projects
Polymetal (Pevek) - use the freighted vessels, small shipment value
Norilsk Nickel: growth of a cargo flow twice freighted vessels, a construction isn't planned

Projects under construction

Pavlovsk field (Novaya Zemlya): export is planned to be provided by nuclear container ship Sevmorput".

Vostokugol (Taimyr): the freight of Nordic Bulk Carriers AS Panamax of the class Arc4 requiring icebreaking maintenance;
ensuring steady year-round navigation in a southwest part of the Kara Sea requires vessel construction of the class Arc7.

13 Data sources: companies; analysis of GEON

 DISTRIBUTION OF FREIGHT TRAFFIC OF HYDROCARBONS ON THE ARCTIC WATER AREAS
40

35

MILLION TONS 30

25
Plus 30 mln t
20

15

10

0
2016 fact

2018
2019

2021
2022

2025
2026

2028
2029

2032
2033

2035
2036

2039
2040
2017

2020

2023
2024

2027

2030
2031

2034

2037
2038
Total FSO Kola Bay Barents and Pechora SW Kara sea Northern Sea Route

Additional SW Kara sea: Norilsk Nickel 1.5 mln t + VostokUgol (Taimyr coal) exp. 10 mln.t + Arctic LNG exp. 18 mln t
14 Data sources: Rosnedra, companies ; analysis of GECON
OPERATION AND CONSTRUCTION OF NUCLEAR ICEBREAKERS

Type Name IMO 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Number of the operating icebreakers 4 5 6 5 4

"Taimyr" Vaygach 8417481

(project 10580) Taymyr 8417493

"Arctic" Yamal 9077549

(project 10520) 50 Let Pobedy 9152959
Arctic 9694725
NIB-60
Siberia 9774422
(project 22220)
Ural 9658642
construction operation extension of term of operation

Data sources: Atomflot, Afrikantov OKBM, Baltic plant Shipbuilding; analysis of GECON
15
ASSESSMENT OF POSSIBLE NEED FOR MIXED RIVER-SEA NAVIGATION VESSELS
SCHEME OF TRANSPORTATION OF THE CONCENTRATE

NORTH YAKUTIA Transshipment point

SCHEME OF TRANSPORTATION Fields Au, Sn

1. Fields - Ust-Kuyga port on the river Yana

(winter road)
2. Ust-Kuyga Nizhneyansk (river vessels)
3. Nizhneyansk transshipment on the river-


sea navigation vessels
4. Transport by Laptev sea and up the river Processing unit
Lena to the port Nizhny -Bestyakh

May be one double-draft ice class

vessel will be more convenient?
CONCLUSION

Economic development of the Russian Arctic assumes numerous projects of

development of mineral resources which considerable part is implemented with use
of the maritime scheme of transportation.

On prospect till 2030 it is possible to assume that the main projects will be realized
onshore; the Prirazlomnoye field will be the only one producing on the shelf.

There is a expected need for the construction not only ocean ships, but also mixed
river-sea navigation vessels.
 Thank you for attention!

mgrigoriev@gecon.ru

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