Russia’s Sovcomflot says Arctic oil and gas shipments have reached new highs

By Atle Staalesen, The Independent Barents Observer July 11, 2017
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A flag depicting the logo of the Russian state-owned shipping conglomerate Sovcomflot, flies outside the company's headquarters in St. Petersburg, Russia, May 17, 2017. (Anton Vaganov / Reuters)
A flag depicting the logo of the Russian state-owned shipping conglomerate Sovcomflot, flies outside the company’s headquarters in St. Petersburg, Russia, May 17, 2017. (Anton Vaganov / Reuters)

In his meeting with Russian Prime Minister Dmitry Medvedev this week, Sovcomflot General Director Sergey Frank confirmed that his company over the last half year has shipped 20 million tons of crude oil from Arctic and sub-Arctic sites.

“A few years ago, some of these operations would simply not have been technically possible,” he told the premier, a government press release reads.

A key driver in the development is the new Novy Port project in Yamal.

“For the first time in history, year-round commercial navigation with large-size ships on the Gulf of Ob is now successfully conducted,” Sergey Frank added.

The oil field operated by Gazprom Neft started out-shipments through the shallow Arctic waters of the Ob in spring 2016. When in full swing, the Novy Port will deliver up to 8.5 million tons of oil per year.

According to the Sovcomflot leader, the company will in 2018 further increase oil shipments in the area. Only in the waters of the Northern Sea Route, up to 12 million tons of oil is planned shipped out. That is twice as much as the maximum volume shipped on the Arctic route in the Soviet period.

“The Soviet-era record was set in 1987 when the volume on the route was 6 million tons, now this one company thanks to only two projects will ship out twice more,” Frank told PM Medvedev.

In addition to the Novy Port, Sovcomflot ships out oil from the Arctic Varandey terminal on behalf of oil company Lukoil.

As the volumes continue to grow, the need for safe shipping increase, the shipping company argues.

“On behalf of the whole shipping community, I want to request you and the government to support the continued and quick development of infrastructure along the Northern Sea Route, that includes icebreakers, navigation, and all which is connected with state responsibilities,” Frank told Medvedev.

“The growth in volumes clearly requires adequate measures in the field of shipping safety.”

The shipping company leader underlined to the prime minister that Russia is entitled to introduce security measures along its northern coast in line with Article 234 in the UNCLOS, the United Nations Convention on the Law of the Sea.

Sovcomflot also intends to introduce a major technical shift in its fleet of Arctic tankers.

According to Frank, all new vessels starting from 2018 will be running on gas as its prime fuel.

“We want to be pioneers on this issue,” he underlined.