Cargo forecasts of some Arctic projects are overestimated, says transport expert

Forecasts for the development of the Northern Sea Route should in some cases be viewed with a degree of scepticism as real capabilities could be significantly less, according to Mikhail Grigoryev, Head of consulting company Gecon – Senior Research Scientist at IMEMO RAS.

Speaking at the 8th International Conference “Arctic-2023”, Grigoryev said that some large projects were not supported with the fleet or transport infrastructure that would be needed. He gave as an example Vostok Oil and Syradayskoye field, which were said to have no ships, port fleet or handling facilities. However, Vostok Oil has announced plans to supply 30m tonnes per year from 2024. Grigoryev said that achieving this would be challenging, as it was not clear where the tankers would come from to carry it.

The same optimism was reported on the part of the investors in the Syradayskoye field, which has promised to supply 7m tonnes of coal in 2026.

Grigoryev claimed that a number of other large-scale projects planned in the Arctic have the same problems.

The project on coal transportation from Siberia to Asia by the Yenisey river faces different infrastructural problems “Although the project was approved by the Ministry of Transport and scheduled for launching in 2023, there is still a lot of doubt about how realistic it is. First of all, there are depth limits of three metres near the port of Lesosibirsk …, secondly, there is a lack of cargo and towing ships, … thirdly, the capacity of port Dudinka is limited as well as the off-harbour transshipment in the mouth of the Yenisey”.

He estimated that, because further development of the Northern Sea Route was connected with the development of two fields,

Novoportovskoye and South Tambey ones, mineral cargoes would account for 80% of Northern Sea Route traffic by 2035, with cargoes from the projects of Gazprom Neft, NOVATEK, Nornickel, Sabetta and others making up 10%.

Gajimagomed Guseinov, First Deputy Ministry for the Development of the Russian Far East and Arctic, said at the Conference that the volumes of cargo carried by the Northern Sea Route expected by the government would grow to 90m tonnes per year by 2024 and to about 216m tonnes by 2030, taking into account the obligation of the cargo shippers and the expected growth of transit and other cargoes.

The Northern Sea Route, developed with a view to getting ships to take a shorter, quicker and cheaper route from Asia to Europe, avoiding the Suez Canal, is a single transport system in the Russian Arctic sector. It stretches along the northern coast of Russia across the seas of the Arctic Ocean (Kara, Laptev, East Siberian, Chukchi seas), with current publicity being that it links Russia’s European ports with the mouths of navigable rivers in Siberia and the Far East. But, prior to 2022, much had been made of its international potential. The emergence of Western sanctions against Russia in 2022 have made this a less likely option, which in turn has impacted the financial viability of the project. It seems instead to have become more of a Russian prestige project.