Practical Information for Operating

on the Northern Sea Route

Dr. Bjørn Gunnarsson

Managing Director

Centre for High North Logistics

Kirkenes, Norway

The Northern Sea Route (NSR)

Deepwater Track

Traditional Track

Alternative DW Track

Hydrographic Station

1. Russia regulates shipping on the NSR

NSR transit regulations

UNCLOS III Article 234 (“the Arctic Clause”) and Russian domestic

legistlation; “ Regulation for Navigating on the Seaways of the NSR,

1990”

Navigation on NSR is allowed based on the “Guide for Navigation

through the NSR, 1996” (NSR Guidelines)

The Guidelines include technical requirements for the vessel; ships

must satisfy the applicable “Rules of the Russian Register of

Shipping” but equivalent Baltic and Polar Ice Classes are accepted

Additional requirements are focused on operational and practical

aspects supporting a safe and uninterrupted voyage; including the

competence of navigators and crew

A transit fee (tariff) to cover the expenses for icebreaker assistance,

navigational support, and administration will be charged

Atomic icebreaking fleet of Russia

Atomic Icebreakers of “Taimyr” type:

Propulsion Capacity – 35 MW;

Water displacement 21,000 t;

i/b “Taimyr” – 30.06.1989

i/b “Yaygach” – 25.07.1990

Atomic container carrier “Sevmorput”

– 30.12.1988

Propulsion Capacity – 32,5 MW;

Water displacement – 61,000 t;

Deadweight – 33,900 t

Atomic icebreakers of “Arktika” type:

Propulsion Capacity – 54 MW;

Water displacement – 23,000 t;

i/b “Rossia” – 21.12.1985

i/b “Sovetsky Soyuz” – 29.12.1989

i/b “Yamal” – 28.10.1992

i/b “50 Let Pobedy” – 23.03.2007

2. Which are the main challenges on the

NSR?

Operational challenges during the

summer season

Drift ice in some part of the route, heavy at times; often excludes the use of

the shortest route; requires the need for icebreaker assistance

Navigational challenges through long straits – e.g. Kara Gate Strait (21 m),

Vilkitskii Strait, Dimitry Leptev Strait (10 m), Sannikov Strait (13 m), and

Long Strait (20 m)

The east and west approches of some straits can be clogged with ice fields,

depentent on wind direction

Common fog and low visibility

Low elevation of part of the Russian coastline and islands which

makes visual and radar observations difficult

Novosibirsky

Archipelago

Sannikov

Strait

(12.8 m) Dmitry Laptev

Strait

(7.0 m)

Northern

Passage

(15+ m)

Draft bottlenecks on the NSR

3. What is involved in planning a transit

voyage on the NSR?

Planning a NSR transit voyage

Review following Russian

NSR documents:

a. “Instructions for ship

owner and master of the

vessel”

b. “Rules of navigation on

the seaways of the NSR”

c. “Requirements for

vessel’s design, equipment

and supplies”

Planning a NSR transit voyage

Submit to the NSR

Administration an

application for a vessel to

navigate through the NSR

Contact FUSE

Rosatomflot for icebraker

guidance

Planning a NSR transit voyage

The NSR Administration

(Marine Operation

Headquarters)

will appoint an Inspector

to see if the vessel is in

compliance with Russian

regulations

The results of the

inspection is submitted to

the NSR Administration

that decides if a Permit

should be granted

NSR transit voyage check-list

4. What is the current use of the NSR?

NSR transit voyages in 2011 (as of September 22, 2011)

Total Volume, t Vessels Flags

Liquid Cargo 485 678

Singapore, Marshall

Islands, Norway, Liberia,

Finland

Bulk Cargo 110 000 Russia, Liberia

Frozen Fish 27 535 Russia, Panama

In Ballast 3 Vessels Russia, Liberia, Panama

By 22nd of September a total of 17 transit voyages had taken place with total

volume of transit cargo 623 213 tons (plus internal cargo flow of 2,2 million tons)

(from Rosatomflot)

Total transit voyages in 2010 and 2011

(as of September 22, 2011)

2010 2011

Total Volume of

Transit Cargo, t

111 000 623 213

Total Number of

Transit Voyages

4 (2 of them in ballast)

17 (3 of them in ballast)

The forecast for 2012 places the volume of bulk cargoes up to 1,8 million tons, oil and

LNG shipping is planned to reach 2,5 million tons – and total cargo shipped along the

NSR is expected to reach 5 million tons

(from Rosatomflot)

Tanker SCF Vladimir Tikhonov

A Suezmax tanker “Vladimir Tikhonov” of 160,000 dwt carrying 120,000 tons of

gas condensate sails through the NSR at the end of August 2011 with record

average speed of 14,0 knots

The Passenger Ferry Georg Ots

Passenger ferry “Georg Ots” sails through the NSR in 2010 – The ferry has

class Ice B and sailed under Russian flag from Murmansk eastbound with the

port of destination Vladivostok. The overall sailing lasted for 7 days from 16 to

23 September

Seismic Vessel Polarcus Alima

Seismic Vessel “ Polarcus Alima” sails from Hammerfest (Norway) to

the Bering Straits, 15th to 25th September 2011

Bulk Carrier Nordic Barents

For the first time in 2010 a non-Russian bulk carrier used the NSR as a transit route

departing from a non-Russian port and arriving at a non-Russian port – “Nordic

Barents” of Arc 4 with 41,000 tons of iron ore from Kirkenes (Norway) to

Lianyungang (China). Only 8 days spent on NSR with an average speed 12 knots

The transit of Nordic Barents

Distance Kirkenes (Norway) - Lianyungan (China) via Suez: 12,180 nm

Expected average speed on Suez Route: 13 knots

Expected voyage time for Suez Route: 40 days (plus 1)

Suez Canal Fees 5 USD/ton

Insurance costs; extra piracy insurance

Same voyage via NSR Route: 6,500 nm

Average transit speed on the NSR Route: 12.03 knots

Total time spend on Route: 22.5 days

Tariffs (cost of icebreaker assistance): 5 USD/ton

Insurance costs: 40,000 USD

Estimated time saved via NSR: 17.5 days

Total fuel saved at 28,2 MT per day: 493 MT

Fuel cost saved in USD; at USD 610/ton: 300,000 USD

Environmental savings on NSR (all figures approx.) CO2: 1560 tons

NOx: 50 tons

SOx: 35 tons

5. The costs of shipping on the NSR

NSR Tariffs

№ Nomenclature of cargo Unity Rate

1 General cargo

1.1 Cargo, transported in standard containers

Roubles per ton of

nominal gross mass

of container

1048,0

1.2 Non-ferrous metal Roubles per ton 2050,0

1.3 Converter matte Roubles per ton 1905,0

1.4

Products of mechanical engineering and

instrument-making including equipment and parts

thereof

Roubles per ton 2464,0

1.5 Vehicles, cars and their parts Roubles per ton 2576,0

1.6 Articles out of metals of industrial purpose Roubles per ton 1747,0

1.7 Others Roubles per ton 1048,0

2 Bulk cargo Roubles per ton 707,0

3 Bulk liquid cargo Roubles per ton 530,0

4 Timber cargo:

4.1 Round lumber Roubles per ton 118,0

4.2 Saw-timber and other products of timber,

woodworking, pulp and paper inductry Roubles per ton 148,0

ANNEX to Federal Rates Service

ORDER

Dated June 07th 2011 №122-T/1

Maximum rates for services of the icebreaker fleet on the Northern Sea Route to

ensure the transportation of cargo.

The transit of Nordic Barents

Bring all relevant participants in the value chain around one table: Cargo Owner - Ship Owner - Traders Icebreakers – Brokers – Insurance CP & Law - Classification – Public Authorities Research Institutions

Insurance costs on the NSR

Research during the INSROP (1993-1999) and ARCOP (2003-2006)

Programs

Estimates showed that the total insurance rate for NSR would be almost

twice the rate for the Suez Route

Overall lack of empirical data and significant statistics on the types and

frequency of accidents

Current NSR transit experiences

Insurance premiums tends to be currently on a case-by-case basis

6. What will increase the commercial use

of the NSR?

“We need information and infrastructure..”

Access to reliable information about navigating on NSR, including

information on Russian voyage approval process, administrative

procedures and fees; tariffs need to be commercially resonable

Operational knowledge on the NSR; ice navigators and experienced

crew

Interest from the international insurance companies

Risk evaluation systems and infrastructure to provide safety, route

reliability, and environmental protection

Access to a fleet of ice-class cargo vessels and icebreakers - and

improved facilities and services of Arctic ports and terminals

The international shipping society still needs:

Practical Information

Part 1

Arctic Ports Part 2

NSR/NEP

Part 3

Coastal

Navigation

•Navigational information

•Port cargo profile

•Port infrastructure

•Local rules and regulations

•Rates of port dues

•Tariffs for services

•Immigration control

•Customs control

•General area description

•Current NSR legislation

•Permission for NSR transit

•Sailing routes

•Ice conditions

•Icebreakers assistance

•Tariff system

•Search and rescue

•Environmental issues

•International fleet and

cabotage within the inland

Russian waters and EEZ

•Immigration and customs

boundary regime

•Necessity and conditions

for obtainment of a

cabotage permit

CHNL’s Logistics Information Office

Arctic Ice Pilots Association Ice pilotage services

Immigrations & Customs Clearance procedures

Central Marine Research &

Design Institute (CNIIMF)

PSC & Port Administrations Pre-voyage inspections

OOO Chart Pilot Navigational charts & pilot books

FSUE Rosatomflot Icebreaker assistance

Hydrographical Enterprise River pilotage on Yenisei

NSR Administration Official permission

Important Russian organizations and partners:

CHNL’s Logistics Information Office

7. What will influence the short-term

scenario?

The short-term scenario

Regional destination transport will be the most relevant activity

(instead of transits)

Transport of oil, gas, minerals, and equipment by specialized

multipurpose vessels -- shuttle tankers, shuttle LNG carries, shuttle

bulkers, and purpose-built offshore vessels

The main factor will be the freight market level for different shipping

segments

Type of cargo; price differences in Asian and Western markets; time

sensitivity of markets and cargo

The short-term scenario – cont.

Time required for passage; ice conditions and waiting time; ice-free

season now 3-5 months

Availability of ice-class tonnage in different segments and sizes; ice

class 1A is required at the time being; repositioning cost of vessels

Cost elements such as insurance; NSR transit tariffs (laden and in

ballast) vs. Suez Canal tariffs; bunker prices

Piracy threat along the Suez Route and the cost of insurance and

protection; risk of non-delivery of cargo

The short-term scenario – cont.

IMO Polar code requirements

Long-term climatic conditions

Thank you for your attention!