Russia Opens Its Maritime Arctic

By Captain Lawson W. Brigham, U.S. Coast Guard (Retired)

The new treaty concerning “Maritime Delimitation and Cooperation in the Barents Sea and the Arctic Ocean” was signed 15 September 2010 in Murmansk by Russian and Norwegian foreign ministers Sergey Lavrov and Jonas Gahr Støre. It is historic in several ways. Not only does it establish a stable and secure Arctic boundary, it also includes detailed annexes addressing fisheries and trans-boundary hydrocarbon deposits. Both nations noted the importance of close Arctic fisheries cooperation and agreed that the Norwegian-Russian Joint Fisheries Commission will continue to handle the negotiation of total allowable catches and quotas, while considering measures such as monitoring and control related to jointly managed fish stocks.

Annex II addresses the complicated issue of a hydrocarbon deposit extending across the new boundary. A joint operating agreement will now be required to explore and exploit, as a single unit, any trans-boundary deposit. Norway and Russia also agreed to establish a joint commission for consultations, exchange of information, and as a means of resolving issues.

The culmination of this significant accord, once it has been ratified by the two parliaments, will strengthen Norwegian-Russian cooperation in a key Arctic maritime region and remove a longstanding, disputed area from Arctic state concern. For the Russian Federation and Norway, this agreement provides a framework of cooperation and a stable political environment in which the Barents Sea’s continental-shelf hydrocarbon resources can be increasingly exploited. The treaty also provides a unique and workable model for further circumpolar cooperation.

Trans-Arctic Voyages and Shuttle Operations

The Northern Sea Route, defined in Russian federal law as the set of waterways from Kara Gate (southern tip of Novaya Zemlya) to the Bering Strait, does not include the Barents Sea. The navigation season of 2010 for this route was notable not for total tonnage carried or number of ships, but for several experimental trans-Arctic voyages involving diverse ship types. Four of the voyages took place during the summer, when sea ice is at its minimum in August and September; the fifth was a historic east-to-west escort of an icebreaking offshore vessel in December.

Sovcomflot’s ice-class tanker SCF Baltica (Liberian flag) completed a voyage carrying gas condensate from Murmansk to Ningbo, China, in 22 days; a reduced draft and slower speeds were necessary though the shallow straits of the New Siberian islands. 2 SCF Baltica is the first tanker of more than 100,000 deadweight tons to sail the Northern Sea Route, testing its viability for high tonnage. Also testing the route was the Nordic Barents (Hong Kong flag), an ice-class bulk carrier, on a voyage with iron ore from Kirkenes, Norway, to China. This was the first foreign-flag ship to carry cargo from one non-Russian port to another through Russian Arctic waters. 3 The route has the potential to link northern European mines to markets in China, Japan, Korea, and other Pacific nations.

In a similar voyage, Norilsk Nickel’s icebreaking carrier Monchegorsk sailed from Murmansk and Dudinka along the Northern Sea Route east to Shanghai. 4 However, the key difference in comparison with other full transits was that this one was conducted by an ice-capable commercial ship sailing the length of the route without icebreaker escort. With a change in federal regulations, such independent sailings could become more common during the short summer navigation season.

Two 2010 voyages were unique. On 28 August the passenger ferry Georg Ots departed St. Petersburg for Murmansk and a subsequent voyage under nuclear icebreaker escort along the Northern Sea Route, arriving in Anadyr, Chukota, on 26 September. The ferry reached its new homeport of Vladivostok in October, for use during the 2012 Asian-Pacific Cooperation Summit and future local operations. 5 More challenging was the 16-26 December escort by the nuclear icebreaker Rossiya of the icebreaking offshore vessel Tor Viking from the Bering Strait to the northern tip of Novaya Zemlya across the Northern Sea Route. 6 This successful voyage indicates the sailing season may be extended for passage of ice-capable ships under close escort.

Arctic shuttle operations are the key to efficient marine transportation of natural resources in the Barents and Kara seas, encompassing the western end of the Russian maritime Arctic. Two innovative systems are fully developed and operate year-round. A five-ship Arctic icebreaking carrier fleet carries nickel plate from Dudinka on the Yenisey River to Murmansk; this fleet is owned and operated by Norilsk Nickel, the mining complex in western Siberia, and year-round navigation has been maintained since 1979.

A three-ship icebreaking tanker operation services the offshore oil terminal at Varandey in the Pechora Sea (southeast corner of the Barents Sea). The three Panamax-size shuttle tankers can annually deliver nearly 12 million tons of oil to a floating tank farm in Murmansk. 7 The terminal and marine shuttle system represent a prime example of Arctic globalization: the Russian company Lukoil teamed with the American firm ConocoPhillips for investment and development of the offshore terminal; the tankers were built in Korea by Samsung Heavy Industries using Finnish icebreaking technology; and the ships are operated by Sovcomflot.

A third shuttle system is due for full operation later in 2011; a two-ship fleet will deliver oil to Murmansk from the Prirazlomnoye offshore oil production platform in the Pechora Sea. 8 Both tanker shuttle fleets have significant potential to provide year-round service to other projects and thereby optimize regional marine operations.

China and Finland Alliances

As hydrocarbon exploration and transportation development of the Russian maritime Arctic have rapidly evolved, Russia has been quick to forge strategic commercial alliances with China, as well as Finland and other Western companies. Early in the operation of the Varandey terminal, Lukoil signed an agreement with Sinopec (China Petroleum and Chemical Corporation) to supply 3 million tons of oil to China. 9

Sovcomflot Group reported on 22 November 2010 that it had signed a long-term agreement with China National Petroleum Corporation regarding seaborne carriage of hydrocarbons from the Arctic to China. The cooperative agreement envisions using the Northern Sea Route for not only moving oil and gas from Russia’s developing offshore, but also for trans-Arctic shipments in the summer navigation season. It includes a provision for Sovcomflot to assist in the training of Chinese mariners in Arctic navigation. 10

A new venture was created between Russian and Finnish commercial interests in December 2010. STX Finland Oy and the United Shipbuilding Corporation (composed of 42 shipyards in Russia) formed a joint venture that will focus on Arctic shipbuilding technology. The newly named Arctech Helsinki Shipyard Oy will build specialized icebreaking vessels for key operators throughout the Russian maritime Arctic, and likely also for foreign buyers. 11

Arctic Hub and Infrastructure

The ice-free port of Murmansk has long been viewed as a critical economic component of the Russian maritime Arctic. Recent reports in Russia confirm a strategy to fully develop Murmansk as the major oil, gas, and container port, as well as a transportation hub for the entire Russian Arctic. Tax and customs benefits from a new port economic zone will facilitate investment, as Murmansk is increasingly tied to offshore development in the Barents Sea. 12 Companies such as BP, for its potential Kara Sea venture; and others such as Gazprom, planning the offshore Shtokman gas field, look to establish bases for Arctic operations (including response and emergency services) in Murmansk.

Northern Sea Route headquarters of the western sector may be moved from Dikson, on the remote Kara Sea coast, to Murmansk. As well, it is clear that new port and construction activities along the Russian Arctic will be serviced from a modern hub in Murmansk. More new marine infrastructure has been planned. New Arctic rescue centers, Russian-built satellite systems for the North, and a new Arctic research vessel were all discussed in 2010 by several federal ministries. Some of this critical Arctic infrastructure may come about through investment by public-private partnerships, including foreign capital.

The Russian nuclear–powered icebreaker fleet under the state-owned Atomflot (part of Rosatom) is a legacy of the Soviet Union, but retains near iconic status in the Russian north and the polar world. There are plans to modernize the fleet by building dual-draft ships that can operate along the coastal waters of the Northern Sea Route and in the Siberian estuaries and rivers. It is apparent that shuttle fleets in the Barents and Kara seas do not intend to operate with icebreaker support or in convoys. However, the nuclear icebreakers would be used to escort Russian and foreign ships along the Northern Sea Route during extended navigation seasons and to conduct scientific expeditions, support Arctic oil and gas offshore development, and support summer sealift to Arctic communities. Most certainly the nuclear icebreakers remain a visible and tangible presence of the Russian Federation in the Arctic Ocean.

State Policy and International Cooperation

Russian President Dmitry Medvedev approved a new Arctic policy statement on 18 September 2008, titled The Foundations of the Russian Federation’s State Policy in the Arctic until 2020 . This document outlines the strategic priorities for the Russian Federation in the Arctic, noting unique features of the region including low population, remoteness from major industrial centers, a large natural-resource base, and dependence on supplies from other regions in Russia. One of the critical points is that Russia intends to use its Arctic regions as a “strategic resource base.”

For the maritime world, the policy mentions use of the Northern Sea Route as a national, integrated “transport-communications system” in the Arctic, specifically an “active coast guard system” in the Russian Arctic under the direction of the Federal Security Service. Important for the Arctic states, the document notes Russia’s interest in enhancing cooperation with other national coast guards in the areas of terrorism on the high seas, prevention of illegal immigration and smuggling, and protection of marine living resources. Russia, Norway, and the United States already cooperate in these pursuits, but more can be expected as marine activities expand throughout the Arctic Ocean.

On 22-23 September 2010, the Russian Geographical Society held a key conference in Moscow that focused on the importance of international cooperation. Appropriately called “The Arctic: Territory of Dialogue,” this forum gave prominence to the roles of indigenous people, the need to protect the environment, the vast storehouse of Arctic resources to be developed, and the need to affirm the region as a “zone of peace and cooperation.” Prime Minister Vladimir Putin addressed the conference in a wide-ranging speech, noting that 70 percent of the country is located in northern latitudes, and that the issues of Arctic development are high on Russia’s national agenda. He mentioned the importance of the Arctic Council to the “integration” of ideas and concepts, as well as the upcoming search and rescue agreement to be signed by the Arctic ministers in Nuuk, Greenland, this May. 13

Overall Implications

The Russian Federation is embarking on a long-term strategy to link its Arctic region economically to the rest of the globe. The drivers are clearly the development of natural resources and timely export of domestic production. The facilitators are innovative marine transportation systems that can move cargoes of hydrocarbons and hard minerals both westbound (year-round) and eastbound (summer season) along the top of Eurasia.

There will be opportunities for ice-capable, foreign-flag ships to gain access to Russian Arctic waters, as illustrated by recent operations in summers 2009 and 2010. For example, bulk carriers could increasingly link northern European mines to Pacific ports during summer seasons of navigation. And foreign-flag ice-class tankers could compete with modern Russian-owned fleets of advanced carriers for this potential summer maritime trade route, especially linking China to Russian Arctic oil and gas.

For safety and security reasons, Russia is sure to manage tightly the opening of its Arctic waters to maritime trade. Similarly, the capabilities of its border guard of the Federal Security Service will be enhanced for Arctic operations. There has been no change in regulations along the Northern Sea Route for mandatory icebreaker escort in certain straits, despite Norilsk Nickel’s Monchegorsk full passage without escort in 2010. Non-ice-strengthened commercial ships have not yet sailed along the eastern reaches of the route.

Changes could come soon, with legislative action from the State Duma. All this new activity will require improved environmental observations, new marine charts, traffic monitoring, enforcement capability, and control measures. We are witnessing the cautious evolution of an Arctic region from a once-closed security bastion to a vast marine area more open for use and, potentially, integrated with the global economy.

1. Press release, 15 September 2010, Office of the Prime Minister, Norway, .

2. Press release, 9 September 2010, SCF (Sovcomflot) Group, Russia’s largest shipping company (state owned), .

3. Joint press release, 20 August 2010, Nordic Bulk Carrier A/S and Tschudi Shipping Company A/S.

4. Press report, 16 November 2010, Norilsk Nickel, on the return of its carrier Monchegorsk to the port of Dudinka on the Yenisey River from Shanghai, .

5. Reported in MB News (Murmansk Business News), 29 September 2010; and , 30 September 2010.

6. Voyage details provided by the Swedish shipping firm TransAtlantic, operator of Tor Viking , January 2011.

7. Oil and Gas Eurasia , “First Shipment of Oil from the Varandey Terminal,” 10 June 2008, .

8. Oil and Gas Eurasia, “Double Acting Tankers for the Prirazlomnoye Project,” November 2010, .

9. Reuters, Moscow, 16 June 2009, from a Lukoil report.

10. Press release, 22 November 2010, Sovcomflot Group.

11. Press release, 10 December 2010, STX Finland and United Shipbuilding Corporation, agreement signed in St. Petersburg.

12. “Planned Seaport Would Turn Murmansk into Major Hub,” St. Petersburg Times , 5 October 2010.

13. Address to the international forum, “The Arctic: Territory of Dialogue,” 22 September 2010, official site of the prime minister of the Russian Federation, .

Captain Brigham, a distinguished professor of geography and Arctic policy at the University of Alaska Fairbanks, and senior fellow at the Institute of the North, earned his PhD from Cambridge University. He commanded four Coast Guard cutters, including the polar icebreaker USCGC Polar Sea (WAGB-11), and was a speaker at the Moscow Arctic conference noted in this article.

Captain Brigham is a professor at the University of Alaska Fairbanks and senior fellow at the Institute of the North in Anchorage. He served as commanding officer of four Coast Guard cutters including USCGC Polar Sea (WAGB-11) on Arctic and Antarctic voyages.

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