Korea, Russia Look to Cash In from Northern Sea Route

Vladimir Putin and South Korean President Moon Jae-in; Image Courtesy: Russian Presidency

Russia and Korea are working to bolster their maritime ties, especially as they eye the benefits of shipping through the Northern Sea Route.

As Russia strives to build up its own shipbuilding capacity, it turned to Korea for the construction of its gas carrying ships.

A Korean company has received a contract to build 15 ice-breaking LNG carriers for Russia, the President of South Korea Moon Jae-in said while speaking at the Eastern Economic Forum in Vladivostok on Thursday, September 7.

The tankers, to be built by DSME, are intended for the transportation of liquified natural gas from the Yamal LNG project.

“The Republic of Korea ranks first in the world when it comes to shipbuilding. Korea’s shipbuilding companies account for 64 percent of the total volume of large-capacity tankers. Thus, it would not be an overstatement to say that Korea has the world’s best technology,” Moon Jae-in said.

In addition, last month, Rusian shipping company Sovcomflot said that it had hired  South Korean shipbuilder Samsung Heavy Industries for the construction of a fourth in a series of Arctic shuttle tankers to service the Novy Port project. The 42,000 DWT tanker is slated for delivery in 2019.

“The Republic of Korea received a contract to build a large LNG-powered oil tanker for Russia. This historical event makes international sea navigation environmentally friendly.

“The ice-breaking LNG tanker and the LNG-powered tanker will serve to boost the expansion of imports of Russian gas to other countries,” he added.

The order came on the heels of the completion of  Christophe de Margerie‘s maiden voyage, the world’s first ice breaking LNG carrier. The vessel transported liquefied natural gas (LNG) through the Northern Sea Route from Norway to South Korea.

“The ship arrived in Korea from Norway along the Northern Sea Route without needing any assistance from an icebreaker,” Moon Jae-in commented.

As explained, due to the use of the Northern Sea Route, the distance, time plus transportation costs have dropped by a third as compared to the Southern Sea Route across the Suez Canal and the Indian Ocean.

“Korea and Russia have demonstrated to the world a new model of cooperation,” he stressed.

The bilateral cooperation has also seen Korean shipbuilders ink several deals with Russia’s new shipbuilder Zvezda Shipbuilding Complex.

Earlier today, the Russian President Vladimir Putin took part in the keel laying ceremony at Zvezda for four new ice class supply vessels being built for Rosneft.

“Today, it is important to start accomplishing the main long-term strategic task and to launch production of full-fledged medium and large capacity vessels and marine technology as soon as possible.

“I know that a long-term plan for utilizing the enterprise’s production facilities up to 2035 has already been approved. I hope that this plan will be implemented. In fact, I will monitor this project closely because it is probably a key precondition for the enterprise’s success. Not only Rosneft but also Gazprom, Novatek and other Russian companies must put this plan into practice and place orders on time,” Putin said.

“The portfolio of orders includes 14 vessels,” Rosneft Chief Executive Officer Igor Sechin said at the ceremony.

“In order for the shipyard to be economically efficient, the required quantity of orders for ships and marine equipment must reach 178 by the year of 2035 – average large-capacity vessels and marine equipment.”

World Maritime News Staff

*This article has been corrected since its initial publishing.