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Monday, October 24, 2016

“Gateway to the Arctic” will add the possibilities of the Northern sea route

Russia took a very important step for the development of the Arctic zone: launched the year-round terminal for oil deliveries to Europe via the Northern sea route. The project will not only bring major financial benefits, it is extremely important for the conquest of the Russian Northern sea route status of a key transit route between Europe and Asia.

President Putin via video link started the shipment of the first tanker of oil from Novoportovskoye field via Arctic new terminal “gateway to the Arctic”, located in the waters of the Ob Bay from Yamal Peninsula.

“Russia is making a serious step towards further development of the richest hydrocarbon resources of the far North and develop the Northern sea route”

“This is a new stage of development of the Yamal are, in fact, a new stage of development of the Novoportovskoye field. It is a signal event, mean that the project is one of the most capital intensive in the oil and gas industry of Russia”, – Putin said during the teleconference. “Over the past three years 186 billion was directed to the implementation of this project, incorporates the latest high-tech solutions associated with work in these very harsh conditions,” – said the President. First oil from Yamal will not be shipped through pipelines and by sea, the President added.

“Begin shipment”, – said the President. “The first shipment of oil through the terminal “Gate of the Arctic” started”, – reported the Chairman of the Board of Gazprom Alexey Miller. Miller and the General Director of “Gazprom oil” Alexander Dyukov were at the terminal. “During the operation of this facility tax revenues to the budgets of all levels will exceed 1.5 trillion rubles”, – reports TASS words Dyukov.

“Without a doubt, following the establishment of the terminal (Gates of the Arctic) Russia is making a serious step towards further development of the richest hydrocarbon resources of the far North and develop the Northern sea route,” said Miller.

The Northern oil province

Novoportovskoye is one of the largest oil and gas condensate fields of the Yamal Peninsula. Recoverable reserves exceed 250 million tons of oil and condensate and 320 billion cubic meters of gas.

It produces better quality oil, which is classified as “light crude oil”. It contains less sulfur than the Russian Urals blend. This gives it additional competitive advantages on the world market. A new grade of oil is called Novy Port. “This oil is trading at a premium to Brent oil,” – said Dyukov.

The field is located beyond the Arctic circle, far away from the transport pipeline infrastructure. In regard to delivery of raw materials was selected shipment by sea. For the first time the possibility of export of oil by sea in the winter period, “Gazprom Neft” has proven in 2011. Then the company managed to conduct a nuclear-powered icebreaker through the Northern sea route from Cape Kamenny in the Ob Bay in Western Europe.

For the first time the Novoportovskoye oil was shipped to Europe by tanker in 2014. However, until now it was carried out only in the summer season and for transportation were involved in three river tanker and four marine grade. Already in the summer season of 2015 at the Gulf of Ob and the routes of the Northern sea route has transported more than 180 thousand tons of hydrocarbons. Now we are talking about year-round supply. In 2016, “Gazprom Neft” plans to increase the supply of Novy Port oil to 2-2,5 million tons, and by 2017 plans to produce here more than 4 million tons of oil.

Beginning in 2016 commercial operation of the Novoportovskoye field in Russia will be a new, the Northern oil province, is unique in terms of operation, infrastructure and transport, said earlier the first Deputy Chairman of “Gazprom oil” Vadim Yakovlev.

“Gate Of The Arctic”

To ensure year-round transportation of oil from the Novoportovskoye field by sea to Europe in the fall of 2015 assembled the first Arctic marine terminal on the Yamal Peninsula. On the shore of the Ob Bay were built subsea and onshore pipeline with a length of over 10.5 km, tank farm, pumping station. The shipment by using remote Arctic oil terminal tower located 3.5 miles from shore in the area of Cape Stone. Terminal capacity is 8.5 million tons of oil per year.

The balance of power and interests in the struggle for the Arctic”gateway to the Arctic” is designed to work in extreme conditions. The temperature in the region falls below 50 degrees, the ice thickness can exceed 2 meters.

Therefore, consumers of oil will be transported via the Northern sea route tankers accompanied by icebreakers. By order of “Gazprom oil” in 2017, will be built two icebreaking vessel security. The vessel’s concept design developed by Finnish company Aker Arctic Technology, and the construction of two icebreakers will perform “Vyborg shipyard”. The laying of the first icebreaker of the security already held in the end of 2015.

The value

This project is critical to increase cargo transportation via the Northern sea route and development of the Arctic offshore fields. He brings Russia to the set task – to increase the volumes of cargo along the Northern sea route by 2030 more than 80 million tons, or twenty times as compared to year 2015.

“The new port will be one of the points on the Northern sea route (NSR), which will definitely give impetus to the development of the draft SMP. And due to the year-round shipment of oil, accompanied by icebreakers route, the Yamal – Europe will be one of the first ever-used segments of the route. At this point will have a specific schedule that will make SMP more convenient and affordable for shippers. To the Yamal fields is now important to provide cash flow to start repayment of the investment. And year-round exports in this respect very useful,” – said the Chairman of the Board of Directors of Engineering company “2K” Ivan Andrievsky.

Oil supplies via the Northern sea route will give Russian oil companies a rewarding experience. “This will give impetus to further expansion of geography of deliveries under way, will attract other companies to the transportation of various cargoes, not profitable to send by land. And it can also revive the economy is now depressed coastal cities”, – said Kirill Yakovenko from “ALOR Broker”.

Terminal “gateway to the Arctic” – this is another important step towards development of offshore vector. “The fact of organizing year-round work of the specialized largest port located behind Polar circle, once again confirms that the Russian interests in the Arctic are backed by a technical capabilities”, – says Dmitry Kipa, Director of investment banking at QBF.

In addition to production on the Arctic shelf, Russia is important for another aspect – organization of an uninterrupted supply of oil and gas to Europe. “It is clear that the use of oil and gas pipelines is significantly cheaper since does not impose additional costs on the development of the transport fleet, liquefaction and regasification of LNG”, – says Dmitry Kipa. However, in the current geopolitical circumstances, the “pipe” needs to be an alternative. In this vein, of course, the possibility of organizing of supplies by sea is an undisputed advantage.

Whatever may be said of the European policy and no matter how tried to get rid of Russian hydrocarbons, the demand for Russian energy resources in Europe in recent years has only increased. Only for the first quarter of this year, Europe bought 15% more for Russian gas than a year earlier. The same situation is observed with the oil. “We can hardly expect a rebound of demand for Russian oil. The supply of oil from Yamal have already been contracted years ahead, and the expansion of transportation opportunities and of course, they will only grow”, – I agree Yakovenko.

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