NOVATEK, together with Rosatom, may for the first time transport LNG tankers along the NSR to Asia in January-April

NOVATEK can send an extra-late shipment of LNG from Yamal eastward under icebreaker support directly to the Asian market as early as January 2024, said Sergei Zybko, head of the Federal State Budgetary Institution Glavsevmorput. The experiment with expanding the navigation window will also take place from March to May – the most difficult months in terms of ice conditions. The company has not risked making early passages since the winter of 2021, when one of the tankers was damaged while attempting to pass to the east without icebreaker support. Now an obstacle may be the lack of a fleet – both icebreakers and ice tankers.

NOVATEK, together with Rosatom, plans to begin an experiment with year-round navigation along the Northern Sea Route in January 2024, said Sergei Zybko, head of the Federal State Budgetary Institution Glavsevmorput, at the forum “The Arctic: Present and Future” on December 7. “Starting from January, gas carriers will move under icebreaker support, including in those months when they never sailed—March, April and May. This will mean year-round navigation,” he said (quoted from RIA Novosti).

NOVATEK and Rosatom did not provide additional comments. We can talk about sending one tanker per month through the eastern sector of the Northern Sea Route, says one of Kommersant’s interlocutors.

Navigation in the eastern sector of the Northern Sea Route (NSR) usually opens in June and closes in December. The earliest NOVATEK service in the east of the NSR opened on May 18, 2020, the latest – on January 5 and 6, 2021. Then NOVATEK decided to send two test cargoes without icebreaker escort. The ice tanker Christophe de Margerie, which was the first to leave, reached China safely, but the tanker Nikolai Evgenov, following it along a canal laid in the ice fields, damaged one of the three azipods (propulsion systems), after which it was necessary to dock the ship. Since then, no further experiments have been carried out to expand the navigation window.

During the rest of the year, NOVATEK supplies gas to Asia via a longer route – through the Suez Canal and the Strait of Malacca, which can take up to 45 days.

Over the past two years, NOVATEK has preferred to increase LNG supplies to Europe, while supplies to Asia via the Northern Sea Route barely exceeded 2.2 million tons. LNG prices in Europe, including cargo shipping costs, were much more attractive in 2022-2023 than in Asia.

NOVATEK’s intention to test year-round navigation may also be due to the fact that the United States has imposed sanctions against the Arctic LNG-2 project, the first stage of which should begin shipments at the beginning of 2024. Most likely, against the backdrop of sanctions, the company will neither be able to use ASPG-2 gas transshipment in Belgium, nor attract conventional tankers from the market for transshipment in Murmansk. The arrival of Arc7 ice tankers, some of which are being built at Zvezda, is delayed. A likely solution will be the redistribution of the tanker fleet between the Yamal LNG and ASPG-2 projects.

Independent expert Alexander Sobko notes that for now, it is likely that we are talking about either test transactions or a small share in total exports.

If we assume that all the available Arc7 gas carriers of the Yamal LNG project carried gas only to the Asian market, then they would not be enough, he believes.

Since transshipment has now been launched in Kamchatka (also subject to US sanctions), there are enough gas carriers in this option. “But in January, shipments from the first line of Arctic LNG-2 should be added, and it is not yet completely clear how many gas carriers the project will have at its disposal against the backdrop of well-known difficulties. Much depends on the speed of the ships, which depends on the ice conditions,” explains Mr. Sobko. In addition, there are still not enough nuclear icebreakers for the massive year-round use of the Northern Sea Route in the eastern direction.

Alexander Sobko notes that test shipments will make it possible to evaluate the economics of icebreaker support, including in practice to check whether it is possible to escort a caravan of several tankers with one nuclear icebreaker, on which the final price of transporting LNG to the east will critically depend.

Tatiana Dyatel