- Cosco Shipping with Russia’s Sovcomflot to haul natural gas across the Arctic route.
- Yamal LNG and China Shipping LNG Investment Co., to operate ice breaking liquefied gas tankers in the northern sea route.
- The idea of Belt and Road Initiative by China is to connect Asia and Europe through sea, rail and road networks.
- China to overtake Japan as the next leading natural gas importer.
- Container and cargo ships prefer the Northern sea route to the traditional route through the Suez Canal, as the weather melts the ice and makes navigation easier.
According to an article published in the Wall Street Journal, State behemoth Cosco Shipping will join Russia’s Sovcomflot to run a fleet of tankers transporting natural gas to Western markets.
Exploring Arctic route through joint venture
Through a joint venture between China’s biggest ocean carrier Cosco Shipping Holdings Co., and its Russian counterpart PAO Sovcomflot, China is breaking into Arctic transport.
China is planning to ship natural gas from Siberia to Western and Asian markets.
Ice-breaking liquefied natural gas tankers
With the aid of Russia’s massive Yamal LNG project, the state-owned companies will operate a fleet of a dozen ice-breaking liquefied natural gas tankers. The areas along the northern coast of central Siberia to destinations in Northern Europe, Japan, South Korea and China will be covered.
According to maritime data provider VesselsValue Ltd., another nine such vessels will be operated by China Shipping LNG Investment Co., a Cosco unit.
Beijing’s Arctic Policy
The agreement comes after a year since Beijing released its first Arctic policy white paper.
The policy states that it would encourage investment across the northern sea route and conduct commercial sailings that would be part of a “Polar Silk Road.”
Belt and Road Initiative by China
China wants the northern sea route to be part of its Belt and Road Initiative, though the Arctic Sea is thousands of miles from China’s northernmost port.
The initiative happens to be an investment program worth trillions of dollars with the idea of connecting Asia and Europe through sea, rail and road networks.
Arctic Council battling glacier melt downs
The country became an observer member of the Arctic Council in 2013, an intergovernment forum made up of the U.S., Canada, Russia, Denmark, Norway, Sweden, Finland and Iceland, which considers development issues and sailing rights as the polar ice recedes.
The U.S., Russia, Canada, Denmark and Norway are asserting rights to shipping lanes, and China is advancing in energy and shipping interests by making investment a priority.
The biggest gas importer
China is ready to overtake Japan to be the world’s biggest natural gas importer this year, as it moves away from coal-based power generation and toward cleaner fuels.
According to a Chinese shipping executive, China has imported about 57 million tons of LNG the previous year and also looking for a steady supply of around four million a year coming from Yamal.
He said that they prefer to move container ships through the northern sea route, because the weather melts the ice and makes it easier to navigate.
Northern sea route committee
The agreement came following the announcement that Sovcomflot Chief Executive Sergey Frank would become the head of a new northern sea route committee by Russia. This committee would oversee seaborne trade across the waterway, which runs from the Bering Strait to the Baltic Sea and is open from July to November.
Mr. Frank said the project’s transport and logistics will be summed up into a single platform to optimize sailings, port calls and inland transport of LNG cargoes.
He added that shipments through the northern sea route “are growing by geometrical progression” and will include more container and general cargo ships looking to save time in sailings from Asia to Europe, compared with the traditional route through the Suez Canal.
Cosco trial runs
A number of trial runs has been done by Cosco through the northern sea route, including vessels moving windmill blades and towers to the U.K. It is also planning to utilize car carriers with China-destined European vehicles.
People involved in setting up the Maritime Arctic Transport LLC joint venture said Cosco also might look to buy stake in Sovcomflot, one of the world’s biggest tanker and natural gas carriers.
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Source: WSJ
