Page 9 - FSUOGM Week 49 2021

FSUOGM PIPELINES & TRANSPORT FSUOGM

NSR unlikely to rival Suez as major

trade route anytime soon

RUSSIA THE Russian government sees the Northern has set out on an ambitious course for NSR
Sea Route (NSR) emerging as an “energy bridge” development supported by domestic indus-
The NSR is an connecting the country’s substantial Arctic oil trial development, and although it will have
important part of and gas reserves with international markets, but to overcome many practical difficulties in
Russia's Arctic strategy it is unlikely that it will emerge as a major tran- achieving its ambition, it has already taken
and its energy strategy. sit route to rival the Suez Canal anytime soon, a significant steps forward and appears likely to
new paper published by the Oxford Institute for continue its efforts on putting NSR traffic on
Energy Studies (OIES) concludes. a growth trajectory over the next decade,” the
Authored by OIES senior research fellow Vit- paper concludes.
aly Yermakov and RUDN University researcher The NSR is an important part of Russia’s
Anastasia Yermakova, the paper notes that Rus- Arctic strategy and its energy strategy. Russia is
sia has put considerable effort over the past dec- eager to assert its political and economic influ-
ade into transforming NSR into a major trade ence in the remote region, and Russian oil and
route between Europe and Asia. A driving force gas producers are advancing increasingly north-
behind the projected increase in trade over the ern projects as some of their largest fields further
next 15 years will be rising LNG exports from south near depletion. It is often not economically
the Yamal and Gydan Peninsulas, the paper says. feasible to connect these remote projects to Rus-
“At the same time, the Russian government sia’s national oil and gas pipeline systems, mak-
seems to recognise that the prospects for a major ing shipment via sea the only option.
ramp-up in international transit volumes via the “From a geo-political standpoint, NSR also
NSR in the next decade are limited,” the paper provides a new avenue for developing interna-
notes. “As a result, the emergence of the NSR as tional relations with new and existing customers
a major Arctic marine shortcut between Europe for Russian hydrocarbons, while also allowing
and Asia that might compete with the Suez route Russia to compete with key rivals in a rapidly
for a significant share of the overall international globalising market,” the paper says.
shipping volumes remains, at best, a distant However, Russia’s Arctic plans are also against
possibility.” a backdrop of growing environmental opposi-
Well-established maritime routes such as tion to development in the region, as well as the
Suez already boast technological and logistical development of hydrocarbons in general. The
efficiencies, whereas Russia will have to create European Commission has even proposed an
NSR’s logistical infrastructure “almost from EU ban on the purchase of Arctic oil and gas,
scratch,” the paper continues. even though it is highly doubtful that such a pol-
“Nevertheless, it is already clear that Russia icy could be implemented any time soon. ™

Week 49 08•December•2021 www. NEWSBASE .com P9