Kamchatka's investment potential will grow with polar logistics 16.10.2023

The Chinese container ship NewNew Polar Bear, owned by Hainan Yangpu Newnew Shipping, for the first time in the history of foreign shipping along the Northern Sea Route, made the transition with commercial cargo from Shanghai to the Kaliningrad region. Before that, the ship calles at Arkhangelsk. After unloading at the port of Baltiysk, the container ship headed to the final point of the route – St. Petersburg.

Foreign merchant fleet starts commercial flights on the NSR

A number of news agencies hastened to link the NewNew Polar Bear voyage along the Northern Sea Route with the upcoming visit of Russian leader Vladimir Putin to China for Belt and Road forum, which will be held from October 17 to 18.

Undoubtedly, the development of polar logistics will become one of the key topics of discussion in Beijing, since it seems, perhaps, a very relevant transport concept, the maritime key to the implementation of the Chinese economic initiative, proclaimed ten years ago. Within the framework of the "Belt and Road" program, the two countries are actively working on projects worth more than 160 billion US dollars. This list also includes Arctic programs.

Today, an additional factor has been added to the obvious spatial and temporal advantages of polar sea traffic between Europe and Asia, between the Pacific Ocean and the Atlantic in comparison with the traditional route through the Suez Canal. The escalated political situation in the Middle East and the tendency for further escalation between key regional players will force global shipping companies to force a change of course from the south to the north. The Chinese transport complex, ahead of potential Asian competitors, is already making such a u-turn.

In this regard, the Newnew Polar Bear voyage from Shanghai to the Baltic Sea should not be presented on the eve of Vladimir Putin's visit to China solely as a visual demonstration of the Chinese side's understanding of Russian geostrategic interests. It is possible, of course, to detect a political aspect in the actions of Hainan Yangpu Newnew Shipping, if you do not take into consideration the circumstances to which the news agencies that made such conclusions did not pay attention.

This is not the first time in this season that Newnew Polar Bear transports commercial cargo along the Northern Sea Route. The Chinese container ship of the reinforced ice class made its debut voyage from St. Petersburg to Shanghai, calling at Arkhangelsk, Qingdao and Tianjin in July. The main part of the cargo was the products of timber processing of the north-west of Russia. The Newnew Polar Bear summer voyage lasted about a month – one and a half times less than through the Red Sea and the Suez Canal.

The number of Russian operators using the Northern Sea Route is also steadily growing. This year, for the first time, Gazprom sent a batch of LNG through the Arctic to China. The company considered the experiment a success.

Time is more than money

The autumn passage of a Chinese container ship from Shanghai to the Baltic took more than 40 days, the voyage along the Northern Sea Route itself, from the Provideniya village of Chukotka Autonomous Okrug to Murmansk, did not even take three weeks. It took a long time to circumnavigate the Scandinavian Peninsula, exit through the Danish Straits from the North Sea to the Baltic. And, if such a route is inevitable when traveling to the Kaliningrad region and St. Petersburg, then in general, experts consider the Baltic-Scandinavian arc redundant for polar logistics between China and Russia. The use of ports in the ice-free and deep-water Kola Bay makes it possible to reduce the time of polar sea communication between China and the European part of the Russian Federation, in comparison with St. Petersburg, for a period of seven to ten days. It is also important that basing on the Murmansk transport hub eliminates all possible risks during the passage of the Baltic Straits.

To solve this problem, the construction of a seaport is being completed on the western shore of the Kola Bay, in the village of Lavna, which, according to experts, will lead to an additional increase in Russian exports to the countries of the Asia-Pacific region along the Northern Sea Route. The new year-round deep-water hub in the Kola Bay is primarily focused on the processing of oil cargo, transshipment of coal and mineral fertilizers, and other commodity groups are not excluded.

In December, railway traffic will open along a 50-kilometer branch connecting Lavna with the general system of existing transport highways of the country, which will mean the integration of the new port into the international North–South transport corridor.

Due to the shift of the vector of the Russian foreign economic perspective towards Asian countries, all Far Eastern ports in the Russian Federation are working with great tension. The acquisition by FESCO which managed to increase the net profit under the conditions of sanctions of six new container ships providing high technological efficiency and speed of stevedoring operations did not significantly defuse the situation. The commissioning of a complex of deep-water terminals on the western shore of the Kola Bay will allow unloading Transsib, the Baikal–Amur Mainline, sea hubs in the Far Eastern Federal District while simultaneously increasing Russian exports to India, China and other Asian countries.

According to the General Director of State Transport Leasing Company, JSC Evgeny Dietrich, next year the port in Lavna will begin to fulfill the task of increasing the volume of cargo transshipment, and we will have a base volume of 18 million tons in 2025. By 2030, the former Russian Minister of Transport expects an increase in cargo turnover in the new hub to 34 million tons. Evgeny Dietrich relates the output to such volumes to the accelerated creation of a fleet of reinforced ice-class merchant vessels in the Russian Federation, which will carry out cargo operations on the section of the Northern Sea Route.

Will the Eastern port be required for transshipment of Arctic cargo?

Yevgeny Dietrich's statement about the need to increase the Arctic merchant fleet may mean that in the east of the country, in the same ice-free and deep waters as the Kola Bay, in maximum proximity to the NSR, it will be necessary to create a port for transshipment of cargo from ice-class vessels to ordinary ones.

"It is obvious that the Murmansk transport hub will also become a reference point for goods sent to Kamchatka and produced on the peninsula for the central regions of the country. The basis of the latter category of goods in the near future will be seafood extracted and processed by the enterprises of the fisheries complex of the region, – said the first CEO Deputy of Development Corporation of Kamchatka Mark Balyasny. – The President has set the task to increase the consumption of fish by Russian citizens to the level of medical indications. One of the ways to achieve this goal is seen in a significant expansion of the transportation of Kamchatka seafood via the NSR to the bulk of Russian consumers. Vladimir Putin instructed the Federal Cabinet of Ministers, the Government of the Kamchatka Territory and Rosatom, the infrastructure operator of the Northern Sea Route, to work out additional incentive measures to increase the volume of seafood shipments through the Arctic."

The implementation of the task set by the head of state goes beyond the pull of the transport component, which was demonstrated by the so-called "fish voyages" of the Sevmorput lighter locomotive. The loading of the vessel with Kamchatka seafood was not even half of its deadweight, Mark Balyasny recalled. It is obvious that incentive measures should concern not only transport workers, but also manufacturers.

However, even if Kamchatka fishermen have an incentive, and after it the desire to reorient the main vector of their supplies from the external market to the domestic one, the volumes of seafood transported to the west via the NSR in the general cargo segment will be insignificant. They will be able to release a part of the total volume of Arctic cargo turnover, which next year, according to forecasts of Deputy Prime Minister Yuri Trutnev, should grow to 85 million tons. The maximum volume of seafood produced in Kamchatka refers to 2020. It was 1.659 million tons.

But the insignificant volume of products transported by the NSR, produced by the enterprises of the region, does not detract from the benefit role of polar logistics for the socio-economic development of the peninsula. The transformation of the Northern Sea Route into an international transport artery means a significant expansion of investment horizons for Kamchatka. It will be necessary to create new transshipment capacities focused not on the needs of the region, but on a wide domestic Russian and foreign markets. There will be a need for the emergence of innovative ship repair enterprises, powerful bunkering companies, and other structural companies.

We can observe the first steps in this direction already today, says Mark Balyasny. – In Bichevinskaya Bay, NOVATEK, PJSC is completing the construction of a marine LNG transshipment complex, which is conceptually immersed in the development strategy of the NSR. Berths in the commercial seaport of Petropavlovsk-Kamchatsky are being modernized. The structure of the Seroglazka terminal is being improved. The energy cluster project in the north of Kamchatka, which is still in the pre-investment stage of implementation, should also be placed in this row. It involves the production of green hydrogen issued by the energy generated by the tidal power plant in Penzhinskaya Bay. One of the basic structural elements of the complex is a non-freezing port in the Korf Gulf. At the same time, it can also become the very eastern transshipment platform mentioned above.