MOL Set on Unlocking the Potential of Northern Sea Route
- Business & Finance
Japanese shipping company Mitsui O.S.K. Lines (MOL) has set sights on seizing the gains from the growth of transported goods via the Northern Sea Route.
To that end, the company signed a Memorandum of Understanding with the Far East Investment and Export Agency (FEIA) under the Ministry of the Russian Federation for the Development of the Far East to cooperate on the development of the Northern Sea Route and the Russian Far East.
The Northern Sea Route, which is a much shorter alternative to the Suez Canal, is gaining on importance amid the reduction of ice in the Arctic and the design of new ice-breaking commercial vessels, which have made the transportation of abundant Arctic natural energy resources commercially viable.
“The Russian Far East is located at the entrance of the Northern Sea Route, making it an important gateway once the anticipated increase in trade via the Northern Sea Route is realized. This is the key element behind the signing of this Memorandum of Understanding between MOL and FEIA,” MOL said.
MOL is participating in the Yamal LNG Project, which is the world first large-scale energy project that exports cargoes through the Northern Sea Route, and MOL’s first ice-breaking LNG carrier, named Vladimir Rusanov, intended for the project is slated to go into service at the end of March, following ice-breaking sea trials in Arctic waters.
Vladimir Rusanov is part of a batch of three ships ordered by MOL in 2014 together with COSCO Shipping Corporation from DSME. The ships will have independent ice-breaking capabilities enabling them to sail in seas with ice up to 2.1 m thick. The vessels will transport LNG from the Yamal LNG plant at Sabetta on Russia’s Yamal Peninsula to worldwide LNG markets throughout the year. The three ice-class LNG carriers are set for delivery in 2018 through 2019.
MOL and China COSCO Shipping have split ownership in four more 174,000 cbm LNG carriers intended for delivery and deployment on Yamal LNG project in 2019 and 2020 onwards.
In addition, MOL is carrying out a feasibility study aimed at establishing an LNG transshipment terminal and marketing complex in the Kamchatka area with PAO Novatek, who is the largest independent gas producer in Russian and the main shareholder of the Yamal LNG project.
“We hope that MOL will be effectively using the Northern Sea Route for transporting cargos to Japan and other Asia-Pacific countries and jointly we will be able to attract significant investments into the Northern Sea Route infrastructure development. The agency is ready to help MOL in implementing all its current and future projects,” General Director of FEIA Leonid Petukhov said.
“One of our key goals is to create a model for the development of the Northern Sea Route as a global transit corridor between Europe and Asia. It is undoubted that this work helps to reinforce Russian-Japanese economic relations,” Minister for the Development of the Russian Far East Alexander Galushka added.
The memorandum is being signed in anticipation of new projects being developed in the Arctic area, following in the steps of the Yamal LNG Project.
Asian countries, including Japan, who import energy resources, are eager to the tap into the potential of the trade growth in energy delivered through the Northern Sea Route, which is expected to boost further the utilization of the route.