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Canadian Arctic Sovereignty  –  Arctic Council  –  Tromsø  –  January 2013

That Other Arctic Passage: Expanded use of the Northern Sea Route

Excerpts from article by Niels Nørgaard, Tromsø published in on 21 Jan 2013 [1]

Opening Northeast Passage brings Asia and Europe closer together

One of Asia's strongest and largest economies, the Republic of  Korea, sees great prospects in the new Arctic Northeast Passage sea route [or the Northern Sea Route, as the Russians call it].

Korean companies will begin to navigate this new 'quick route' through the Arctic Ocean this summer, when polar ice has again withdrawn from the Siberian coast.

At a large Arctic conference in the Norwegian polar port of  Tromsø, Ambassador to Norway  for the Republic of  Korea, Byong Hyun Lee, reported that the Northeast Passage has attracted considerable attention in Asia. This new Arctic sea route north of  Siberia was navigable for almost five months last year - from June until late in November.

When the ice retreats, true sailing comes alive

In 2012, forty-six tankers and bulk carriers sailed through the previously ice-covered waters, with products from Northern Europe to Asia, and back the other way. Climate change means that the ice retreats from the Siberian coast at record rates each year.

The Koreans noted that they will begin to sail on this new lucrative passage to Europe, one of the pioneers on the route. The Danish shipping company, Nordic Bulk Carriers, expect fierce competition on the route. [See an interview with Director, Christian Bonfils, below]

Asia and Europe come closer together measured in transit time

Last year, Nordic Bulk Carriers sent as much as 75% of its sea crossings with 'dry cargo' – that is, when the hold was filled with anything other than oil and gas – via the Northeast Passage.

Ambassador Byong Hyun Lee said the opening of the Northeast Passage literally bring Asia and Europe closer together because shipping times can be shortened by about 40 percent.

And it will be cheaper to trade between the two regions because of reduced fuel costs. The Korean Ambassador also hopes that energy-hungry Korea will have easier and cheaper access to the vast oil and gas fields, which are being developed in the Arctic – especially in the Russian and Norwegian Arctic.

Excerpts of  Niels Nørgaard's interview with Christian Bonfils published in  [2]

Danish shipping company wins using Russia's Northeast Passage

For the Danish shipping company Nordic Bulk Carriers, 2012 was the biggest year for its new Arctic shipping route through the Russian Northeast Passage.

Nordic Bulk Carriers Director, Christian Bonfils, is deeply satisfied with being the market leader on one of the world's most exciting new routes – the Northeast Passage, with a total of  forty-six commercial ships moving through that northern sea route last year. [3]

"[In 2012, our company] sailed 10 trips through the Northeast Passage, compared with only one in 2011. Seventy-five percent were bulk carriers ... the cargo is mainly iron ore and coal, shipped from Murmansk to China. But we have also brought back coal from Canada [4] to Europe and shipped wind turbine blades from China to Poland," said Christian Bonfils.

Q:  Will there be 100 Nordic Bulk Carriers on the Northeast Passage in 2013?

"No, I think not. We had a fairly optimal year in 2012. We started early and ended late. With the ships available to us now, we may have only 12 to 14 shipments next year."

Q:  Is it true that Russia requires approximately $400,000 per trip to let you sail along their northern sea route?

"Yes. But the real problem is that the costs are not particularly transparent. It's not always clear how the Russians arrive at the price. We have told them that, for their own sake, they should make their pricing more transparent. They listened, but it is still the case that if you sail in convoy with another ship, we pay $400,000 for each ship, although it is the same job.

Q:  On the other hand, it takes only 26 to 27 days for a voyage to China [on the northern sea route] compared to 45 days through the Suez Canal.

"There is no doubt that the Russians see great economic potential in this sea route. But it is also a bit hyped. The Suez Canal is open all year round, while the Northeast Passage is open only 4 to 5 months at a time. There will not be a boom in the form of privately-owned, ice- capable ships to sail through the Northeast Passage, because you cannot predict what you will be shipping during those 4 to 5 months of the year."

Q:  To introduce global politics into this, what happens when some countries such as China says: We can sail this route without assistance from Russian icebreakers?

"There is also a concern about maritime safety. The Russians have sailed up there for 50 years, [5]  so we are very comfortable with Russian assistance. Their nuclear-powered icebreakers [Rosatomflot ] clearly have their place in this region.  I do not think 'global politics' will play a role in this area."

[1] The original  piece was published as Asiater vil erobre ny arktisk sejlrute.

[2] Niels Nørgaard's full interview was published (in Danish) in on 21 Jan 2013.

[3] This 2012 total included  21 westward and  25 eastward passages through the Northeast Passage. Over 1.2 million tons of cargo were carried (including the first ever LNG shipment).

[4] Mr. Bonfils confirmed by email that the return-trip coal shipments originated at  Canada's largest coal-loading facility,  Westshore Terminals  (which is part of  Port Metro Vancouver). The coal export terminal is located at Roberts Bank in Delta, BC, 30 km south of  Vancouver.

[5] According to the Russian icebreaking service, Rosatomflot, Soviet 'commercial' use of the Northern Sea Route began as early as 1920  (although primarily as river-to-river navigation.)

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