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BCF 20151015 1
www.barentscenter.com
Barents Center Finland Oy
• It is a share holding company, owned by the Northern Finnish Cities and Regions
• It is a non-profit organization supporting Finnish Businesses and Public Sector in the Barents area.
• Barents Center has created a database of all tender invitations in private, public-private and public sector in
Northern Norway, Northern Sweden and North-West of Russia.
• The data base is up-dated three times per month, one country per month.
• Country wise tender invitation reports are delivered to the share holders once a month.
• The tender invitation report includes detailed contact information, reference number, estimated budget and
financing, instructions how to register as a bidder, how to receive the detailed tender request, guarantee
practises, supplier practises, local consulting help etc.
• Barents Center communicates directly with local Finnish embassies and consulates in Barents area,and
assists in providing authority services if needed.
Background
• The European Union uses 20% of world mineral resources.
• It produces only 3% of them in EU.
• The European High North and Arctic has 17% of world´s mineral deposits.
• Over 25% of global oil & gas reserves are in the European High North and Arctic.
• The forest area of Barents region equals to 70% of the EU forest area.
N.B. Fish production in the Norwegian High North is growing rapidly to satisfy Asian and EU markets, making
up to 50 per cent of fish consumed within EU.
.
l. What is Barents Center Finland?
BCF 20151015 2
www.barentscenter.com
Sector Total B € N FIN N S N N NW RUS (MMK+ARH)
Industry 10,302 3,577 1,270 3,050 2,405
Mining 27,510 10,715 9,740 0,720 6,335
Oil & Gas 41,950 - - 40,750 1,200
Nuclear 16,000 8,000 - - 8,000
Hydro power 7,670 0,7600 1,700 4,000 1,210
Wind power 43,573 12,888 13,965 16,400 0,320
Bio energy 1,755 0,870 - - 0,885
Electric grids 3,270 0,420 0,500 2,350 -
Trade 1,578 1,458 0,120 - -
Tourism 5,211 2,665 1,605 0,800 0,141
Trp/Logistics 31,569 5,044 5,745 5,250 15,530
Public inv. 6,384 2,727 0,045 2,000 1,612
TL B € 196,822 49,12 (20,4) 34,690 75,320 37,688 (27,283)
N.B. The figures are from the Lapland Chamber of Commerce booklet, European High North Investment Catalogue 2015.
Summary by Barents Center 20151015. More than 75%, 140 B€ of the investment volume is expected to materialize with
high probability. Norway and Sweden are financially well off and can start the investments in schedule. The situation in
Finland and Russia is more constrained. Chinese investors have indicated readiness to project, finance and construct with
Russian partners the Belkomur railroad, including Archangelsk port and the rebuilding the Archangelsk district heating
ll. Planned Investments and sectors until 2025
BCF 20151015 3
www.barentscenter.com
1. Norway lives of oil and gas. They have brought 830 B€ to the Norwegian oil fund, which is 16 times the Finnish
State annual budget.
2. Norwegian GDP grows 3% annually, every year, the unemployment rate is less than 4% nationally, in Northern
Norway less than 2,9 %. Lack of engineers in Northern Norway is approx. 2000 persons, in the whole country
15000. The lack of trained labor force in the whole country is 100.000 and grows with 8% annually.
3. Average salary is 5.500 €/month, tax 25%, free cash 4000 €/month. Norway lacks professional workers and
certified suppliers.
4. Norway has over ten closed down mines, which could be made profitable.
5. Northern Norway is the strategic development area of Norway and Statoil until 2030.
6. Northern Norway has one field in operation now, Snöhvit. Statoil has decided of an additional investment of 3,3
B€ to Snöhvit.
7. 2015/2016 the Goliat oil field will come on stream, then Aasta Hansteen and Johan Castberg.
8. 2020 there will be 5 fields in operation. 2030 the figure is 9.
9. The initial investment in a field is approx 7 B€, total investment is approx 10 B€. Source Statoil 9/2015.
10. Now there are 3 fields in pipe line in Northern Norway.
Northern-Norway summary 10/2015
BCF 20151015 4
www.barentscenter.com
8. Kirkenes has 3 port projects under development, Pulkneset, Gamneset and Leirpollen. Jacob B. Stolt-Nielsens
oil terminal (Gamneset) tender invitations, phase 1/430 M€, phase 2/200 M€ opened 4/2015.
The oil is from Yamal and Kara sea. Tömmernes could get a new hub port supported by the Norwegian state,
start 2018. KILA is Tschudi Shipping´s industry and logistics center, budget estimate 350 M€. 800 new apartm.
9. Syd Varanger iron mine in Kirkenes has it´s financing secured until the end of 2015. Nussir AS coppermine in
Kvalsund, Hammerfest is waiting for financing.
10. The planned wind power investments in Northern Norway are approx. 15 B€ until 2025.
11. Hydro power investments are approx. 4 B€. This offers the needed regulating power for wind power.
12. Narvik port expansion is 100 M€, wind- and hydropower 150 M€. Hammerfest gets a new airport on sea,
new harbor and an LNG terminal. Bodö has 40 different construction projects i.e. hotels, schools for 1,6 B€
14. Norway´s National Transport Plan is budgeted to 56 B€ until 2023.
15. Sources: Statoil, Tschudi Shipping, SydVaranger Gruve AS, City of Troms, Petro Arctic, Norwegian Oil & Gas
Association 8/2015, Barents Center tender reports. Oil barrel price in span 40-50 USD for break even.
World´s oil reseves will last for next 150 and gas reserves for next 350 years.
16. Northern-Norway(3 counties) tender invitations for building construction in 8/2015 650 M€, 9/2015 680 M€
Northern-Norway summary 10/2015
BCF 20151015 5
FINNISH BUSINESS HUB
FINNISH BUSINESS HUB
For how long will Northern Norway fields be built? Red circles represent oil and gas fields similar to Snöhvit in operation by 2030
7
Boligfelt
7-800 nye
boliger
Kst. Sør-Varanger
Stamnett-terminal
KILA 1,5
milliarder NOK
(Tschudi)
Norterminal
2 milliarder NOK
Over view of plans-approved and in development
Hammerfest • Location ofthe Statoil Hammerfest Snøhvit LNG plant.
• Supply and service base for the Eni Norge Goliat oil field, the Statoil
Skrugard and Havis oil fields and the Total Norvarg gas field.
• Supply and service base for the Western Barents sea drilling
activities.
3,9
2,1 1,1 6,8 27,6
40,3
Resources in the North
• Rystad Energy predicts that produceable resources on the Northern part of the
Norwegian Continental Shelf (NCS) amounts to 3 billion tons of oil equivalents,
latest estimate close to the Russian Border, 1,9 billion tons.
• Total production during 40 years on the NCS amounts to 3,4 billion tons of oil
equivalents.
1,9
www.barentscenter.com
1. LKAB started in summer 2014 an investment project of 1,2 B€ to three open mine pits in Mertainen, Svappavaara.
Tender invitations started in July 2014 and will continue at least until 2018.
2. Jällivaara city need 300.000 sqm of new living space, offices and public buildings. Kiruna needs 450.000 sqm. LKAB
pays.
3. In September 2015 it was revealed in Gällivaare that additional 100-160 residential houses have to be moved or
replaced due to unexpected earth shift hazard in the eastern suburb of Jällivaara. LKAB pays.
4. In Kiruna highways 870 and E10 will be redrawn and reconstructed. N.B. The Swedish state will invest nationally in
traffic infra structure 60,2 B€ until 2025.
5. The already started moving of the Kiruna and Jällivaara cities will go on 10-30 years.
6. LKAB invests 1,9 B € in apartments, laboratories, process facilities, sediment pools in addition to its annual 0,5 B€
annual maintenance and service investments.
7. LKAB turnover is roughly 3 B€ PA and the average profit is around 1, 2 B€. It is 124 years old. Swedish State is the
majority share holder..
8. The wind power investments in Northern Sweden, counties of Västerbotten and Norrbotten, until 2025 amount to 13 B€.
For example Piteå area in Västerbotten is planning for 1100 wind mills, á 3MW/3M€. The tender invitations opened i
summer 2014.
9. The open tender invitations for construction and mining in Northern Sweden (Västerbotten and Norrbotten) average
between 300-350 M€ per month.
10.Sources: LKAB, cities of Kiruna and Jällivaara, Barents Center tender reports 9/2015.
Summary of Northern Sweden 10/2015
BCF 20151015 10
www.barentscenter.com
1. Oil & Gas reserves in North-West Russia, Murmansk to Yamal, are 8 times bigger than on the
Norwegian side.
2. Three LNG plants are in process in Yamal. The investment is 27 B€. The owners are Novatek,
Total and China National Petroleum Company.
3. EU and USA sanctions have slowed down the exploration and production on the Russian Arctic
seas. Russia has money to invest but lacks the required technology for exploration and
production on Arctic seas. The technology leaders are Statoil, Exxon and Shell. They are winding
down their efforts with the exception of Statoill, which partners Rosneft close to Vladivostok.
4. The most important Russian mines, 5 of them, are in the Murmansk Oblast. They are Fosagro,
Evrohim, Acron, Norilsk Nikel and Severstal. There are plans for nickel refinery, processing plant,
platinum, titanium, copper-nickel and chromium mines. If proper financing is available these
investments amount to 5,8 B€.
5. The Russian Federation promised in September 2014, in Archangelsk, to invest 4,1 B€ into
Russian Arctic areas 2014-2020.
6. The monthly tender invitations in North-West Russia are on 5-10% level of Northern-Norway and
Northern-Sweden. There has been strong approach towards road- and infrastructure investments
by the Russian Federation in Murmansk, Karelian Republic and Archangelsk.
7. The Murmansk Central Heating Plant, valued to 1,2 B€, is in MMK public investments plan.
8. Energy saving and efficiency, water, waste water, waste management investments have been
supported by EU loan funding through NEFCO, NDEP ja EBRD. Russia has paid 30% of the total
loan fund volume each year.
Summary North-West Russia 10/2015
BCF 20151015 11
www.barentscenter.com
9. Russia is putting much effort into NSR development. It needs new ports, bases, SAR bases and
equipment. It has ordered 14 new ice breakers, of which 4 nuclear powered. The deliveries are delayed 2-
3 years. ArcTech Yard in Helsinki is on schedule with IB Murmansk.
10.Belkomur railroad Solikamsk-Gajny-Syktyvkar-Archangelsk 1161 KM will be projected, constructed and
financed by Chinese Poly Technologies. The budget estimate for the railroad is 6-8 B€. In addition a new
Archangelsk deep sea port is most probaly to be done by the Chinese investors to complete the railroad.
11.Gazprom has planned a gaspipeline from Yamal to Murmansk. Estimated budget 8-10 B€ Mrd €.
12.Rosneft announced to start in Murmansk a R & D center for utilization of arctic oil & gas. Budget 2,3 B€
13.Murmansk Transport Hub investment need 3,2 B€. Funding received and spent 900 M€. Remaining
funding open.
14.NOVATEK is looking at a building center for floating LNG plants. Budget estimate 10,9 B €.
15.Norwegian Kvaerner presented to NOVATEK a concept of 3 floating LNG plants in August as soon as the
CNPC confirmed their increased share holding in Yamal LNG
16.Connect the Kola area electricity producers to Russian national grid. Budget 4 B€.
17.Gleb (Lukoil) and Lomonosov diamond mines (open pits) development in Archangelsk.
18.LNG plant to Teriberka. Requires reopening of Shtokmann project. Budget 6 B €.
19.Tourism investment 2 B € in Murmansk area.
Sources: NCCI Murmansk, Barents Observer, Arctic Business Forum Yearbook 2015, Barents Center tender
reports.
Summary North-West Russia 10/2015
BCF 20151015 12
www.barentscenter.com
The potential is there as stated in the beginning.
• The European High North and Arctic has 17% of world´s mineral deposits.
• It produces only 3% of them in European Union.
• Over 25% of global oil & gas reserves are in the European High North and Arctic.
• The forest area of Barents region equals to 70% of the EU forest area.
• Fish production in the Norwegian High North is growing rapidly to satisfy Asian and EU markets, making
up to 50 per cent of fish consumed within EU.
So, what is missing?
• Look at the map of main transport routes.
• The main transport and logistics corridors look like they did in late 16th century.
• European High North ends on Oulu level on the EU transport corridor map.
• Northern Dimension Partners including Russian Federation, Norway, Sweden and Finland have the tool in
Northern Dimension Partnership for Transport and Logistics, NDPTL.
• Put your self on the NDPTL map and it puts you on the map to make a leap of 4 centuries in map drawing.
• When you do this you have taken the first step for EU eligible financing all the way up to 85%.
• It is just the first step, but take it!
Just Do It!
Summary of European High North
BCF 20151015 13
Barents Center Finland
Maakuntakatu 29-31 B
FI-96200 Rovaniemi Finland
Mobile: +358 40 505 7611
Барентс Центр Финляндия
ул. Маакунтакату 29-31Б
FI-96200 Рованиеми Финляндия
моб: +358 40 505 7611
www.barentscenter.com
BCF 20151015 14