Balmasov NSR Information Office 25 September 2013

8/17/2019 Balmasov NSR Information Office 25 September 2013

1/46

Mr. Sergey Balmasov

Head of NSR Information Office

Centre for High North Logistics (CHNL), Murmansk (Russia).

[email protected] www.arctic-lio.com

Conditions for and experiences with shipping

operations in the Northern Sea Route

First International Narvik Conference on Arctic Ports

25 September 2013

mailto:[email protected]://www.arctic-lio.com/http://www.arctic-lio.com/http://www.arctic-lio.com/http://www.arctic-lio.com/mailto:[email protected]:[email protected]


2/46

1. Definition and geographical limits

2. Natural conditions

3. Types of traffic

1. Factors influencing development of the NSR:

4.1. Internal factors 4.2 External factors

a) Ice conditions & long-term ice forecast a) Cargo base

b) Availability of needed infrastructure b) Freight markets

c) Legislation c) Fuel pricesd) Administration d) Large ice class vessels

e) Tariff system e) Geopolitics

5. Conclusions

TABLE OF CONTENTS


3/46

1. The area of the Northern Sea Route means a water area adjoining the northern coastof the Russian Federation, including internal sea waters, territorial sea, contiguous zoneand exclusive economic zone of the Russian Federation, and limited in the East by theline delimitating the sea areas with the United States of America and by the parallel ofthe Dezhnev Cape in the Bering Strait; in the West, by the meridian of the Cape Zhelanie

to the Novaya Zemlya archipelago, by the east coastal line of the Novaya Zemlyaarchipelago and the western limits of the Matochkin Shar, Kara Gates, Yugorski SharStraits.

Official definition of the NSR: (Federal Law No132-ФЗ, Article 5.1.)

1. DEFINITION AND

GEOGRAPHICAL LIMITS


4/46

Presence of ice

2. NATURAL CONDITIONS


5/46

Remoteness. Long distances and lack of infrastructure.



6/46

Flat costal surface.



7/46

Often fogs in summer period.



8/46

Polar night in winter period



9/46

low temperatures in winter period.



10/46

Pushing-off and pushing-to winds



11/46

3. TYPES OF TRAFFIC

1. Transit navigation including transportation of cargo and re-positioning

2. Delivering of materials and equipment for oil and gas industry to the NSR areas3. Export of oil products and minerals from NSR areas

4. Delivering of fuel and supplies for remote communities

5. Internal transportation between NSR ports

6. Scientific and hydrographic research vessels

7. Other traffic (tourism, navy, etc.)

Scheme dated01.08.2013


12/46

By the end of August in the NSR

water area, on average, every day

there were about 50-60 ships.

The distribution of vessels in the

waters is constantly changing, but

in general it can be stated, thatmost of the fleet - up to 40 vessels

out of 60 were located in the Kara

Sea.

These average figures confirm the

statistics of the issued permits,most of which are given out for

work in the Kara Sea.

3. TYPES OF TRAFFIC


13/46

Ship Type: General cargo

Length x Breadth: 160 m X 23 m

Gross Tonnage: 14357, Deadweight: 19150 t

3. TYPES OF TRAFFIC

Sometimes NSR is suffering from massmedia misunderstanding

«YONG

SHENG»

Ice 1A

(Arc4)

COSCO

SHIPPING

16 651 tons

General cargo

Entered NSR

26.08.13 at 23:30

Dezhnev cape

Left NSR

03.09.13 at

09:30

Cape

Zhelaniya

Days on

NSR 7,4

Average

speed on

NSR

14,1


14/46

Internal factors influencing development of the NSR1. Ice conditions & long-term ice forecast

2. Availability of needed Infrastructure:

• Icebreaker fleet

• Search and Rescue preparedness

• Availability of reliable navigational data

• Satellite communication

• Ports

3. Legislation

4. Tariff system

5. Administration

4.1 INTERNAL FACTORS

INFLUENCING NSR


15/46

Current ice conditions & long-term ice forecast. Two opinions:

Dominant view - global warming will continue as Unidirectional trend. Main cause of

warming is the accumulation in the atmosphere of greenhouse gases of anthropogenic

origin.

Alternative scenario – cyclic character of changes. In the next 5-10 years air

temperature will remain elevated, with a gradual decrease of it to 2015-2020 years.

Lowering of the air temperature will last until mid 30's and 40's, then one should expect

the transition to the next warming. Beginning now a cooling will be similar to that which

was recorded in the 40-50 years of XX century. Increased area of ice cover and,

consequently, the prevalence of heavy ice conditions, is expected in the period from 20’s

to 40’s years. Sea ice extent will reach its maximum between 2030 to 2035.

ICE CONDITIONS


16/46

Ice conditions & long-term ice forecast.

ICE CONDITIONS

14-18 September 2012 15-17 September 2013

Global warming?


17/46

ICE-BREAKER FLEET

KEY INFRASTRUCTURE ELEMENT

Name

Year of built Shaft power, kW Builder (country) Operator

Nuclear icebreakers

«Rossiya» 1984 49000 USSR «Atomflot»

«Sovetsky Soyuz» 1989 49000 USSR «Atomflot»

« Yamal» 1991 49000 USSR «Atomflot»

«50 let Pobedy» 2007 49000 Russia «Atomflot»

«Taimyr » 1989 32500 Finland, USSR «Atomflot»

«Vaigach» 1990 32500 Finland, USSR «Atomflot»

Linear diesel-electric icebreakers

« Yermak» 1974 26500 Finland «Rosmorport»

«Admiral Makarov» 1975 26500 Finland «FESCO»

«Krasin» 1976 26500 Finland «FESCO»

«Kapitan Sorokin» 1977 16200 Finland «Rosmorport»

«Kapitan Nikolaev» 1978 16200 Finland «Rosmorport»

«Kapitan Dranitsin» 1980 16200 Finland «Rosmorport»

«Kapitan Khlebnikov» 1981 16200 Finland «FESCO»

«Moskva» 2008 16000 Russia «Rosmorport»

«Sankt-Peterburg» 2009 16000 Russia «Rosmorport»

Source: CNIIMF


18/46

SEARCH AND RESCUE


19/46

SEARCH AND RESCUE

WESTERN SECTOR

Helicopter

M I - 8

Naryan-Mar

airport

Ледоколы I cebreakers

Plane AN-26

Archangelsk

airport

Area of Marine Rescue

Coordination Center (MRCC)

Dikson

Marine operations

Headquarters.

Western sector of the Arctic

Area of M aritime Rescue

Coordination Centre

(MRCC) Murmansk

Marine RescueCoordination Center

Port Diksonrescue assets

and oil spill

response

equipment

rescue assets

and oil spillresponse

equipment

Marine Rescue

Coordination Center

Port Murmansk

Area of M arine Rescue

Sub-Center Archangelsk


20/46

Helicopter

M I - 8

Naryan-Mar

airport

Ледоколы I cebreakers

Plane AN-26

Archangelsk

airport


Coordination Center (MRCC)

Dikson

Marine operations

Headquarters.

Western sector of the Arctic

Area of M aritime Rescue

Coordination Centre

(MRCC) Murmansk

Marine RescueCoordination Center

Port Diksonrescue assets

and oil spill

response

equipment

rescue assets


equipment

Marine Rescue

Coordination Center

Port Murmansk


Sub-Center Archangelsk

Area of Marine Rescuesub-center PevekЛедоколы

Area of

MRCC

Dikson

I cebreakers


sub-center Tiksi

rescue assets

and oil spill

response

equipment

Marine Rescue

Sub Center

Port Tiksi

Marine Rescue

Sub Center

Port Pevek

Port

Provideniya

Marine operations

Headquarters.

Eastern sector of the Arctic

rescue assetsand oil spill

response

equipment

rescue assets


equipment

rescue assetsand oil spill

responseequipment

SEARCH AND RESCUE

EASTERN SECTOR


21/46

EMERGENCY PREPAREDNESS

VIEW FROM INDUSTRY

The best safety measure against accidents is the ice breaker escort andregulatory requirements.

The Arctic Council agreement on developing a joint framework for SAR isimportant as these countries are the ones with an interest in developing theresources of the region while keeping potential negative effects at aminimum ie. sustainable development.

The increased economic activity in the region will improve the generalpreparedness to respond to potential accidents due to higher availability ofvessels, equipment and people provided necessary coordination isfacilitated.

WARNING – the development of the shorter transportation (= reducedemissions) via the NSR can be stopped in its infancy if too costlyregulations are imposed for example through the IMO Polar Coderequirements eg. Ban on HFO.


22/46

NAVIGATIONAL CHARTS

COVERAGE AREAS

All together 730 navigational charts,including 233 in English

1240 costal visual signs

300 floating marks

Ongoing hydrographic surveying

Source: Hydrographic Enterprise, St. Petersburg.


23/46

NAVIGATIONAL CHARTS

Approximate list of navigational charts for NSR transit:


24/46

NAVIGATIONAL

PUBLICATION

AVAILABLE AT WWW.ARCTIC-LIO.COM

http://www.arctic-lio.com/http://www.arctic-lio.com/http://www.arctic-lio.com/http://www.arctic-lio.com/


25/46

RADIO NAVIGATIONAL WARNINGS


26/46

RADIO NAVIGATIONAL WARNINGS


27/46


28/46

SATELLITE COMMUNICATION

The breach of INMARSAT satellites coverage areas



29/46

Shore based correction stations

SATELLITE COMMUNICATION



30/46

Port infrastructure needs to be developed

PORTS ALONG NSR


31/46

TARIFFS

Rates for services of the icebreaker fleet on the NSR

Season 2013, the same principles as in 2012

Tariffs for icebreakers' services on the

NSR established by Order No. 122-t/1as of 07 June, 2011, are Maximum

Icebreaker fleet operator has the rightto apply tariffs at the level of or lowerthan the Maximum tariff

The tariffs can be a subject tonegotiations with FSUE Atomflot


32/46

United Nations Convention on the Law of the Sea 1982

Article 234, Ice-covered areas

Russian Regulations forNavigation on the Seaways of the

NSR,1990

Rates for services of theicebreaker fleet on the NSR, 2011

Federal Law No132-ФЗ "On Amendments toCertain Legislative Acts of the RussianFederation regarding state regulation of

merchant shipping in the waters of the NorthernSea Route” entered into force 28.02.2013

Guidelines

for Radio communication in Arctic,

2013-2014

New tariff system for icebreakerservices should be established

soon (capacity, ice class, distance,

period)

New Rules of navigation on thewater area of the NSR

Registered April 12, 2013

3. INTERNATIONAL AND

NATIONAL LEGISLATION

Current legislation structure

IMO Polar Code

to be prepared in 2014?

to be approved in 2015?


33/46

Marine transportation on the NSR is regulated by the Russian

legislation based on the principles of the UN Convention on theLaw of the Sea, 1982, in particular article 234 “Ice-coveredAreas” .

• Non-discrimination basis for all states• Preventing environment pollution• Ensuring safe navigation

Article 234

«Coastal States have the right to adopt and enforce non-discriminatory laws and regulations for the prevention, reduction andcontrol of marine pollution from vessels in ice-covered areas withinthe limits of the exclusive economic zone, where particularly severe

climatic conditions and the presence of ice covering such areas formost of the year create obstructions or exceptional hazards tonavigation, and pollution of the marine environment could causemajor harm to or irreversible disturbance of the ecological balance.Such laws and regulations shall have due regard to navigation andthe protection and preservation of the marine environment based onthe best available scientific evidence.»

3. INTERNATIONAL AND

NATIONAL LEGISLATION


34/46

NSR Regulations 1990

•Every vessel intending to navigatethrough the NSR shall obtain a Permitfrom NSR Administration

Master or person replacing him shallbe experienced in operating а vessel

in ice

Obligatory requirements to have CivilLiability Certificate for bunker oilpollution


•Every vessel intending to navigatethrough the NSR shall obtain a Permitfrom NSR Administration

Master or person replacing him shallbe experienced in operating а vessel

in ice

Obligatory requirements to have CivilLiability Certificate for bunker oilpollution

Main changes in new NSR Navigation Rules

3. LEGISLATION


35/46


Vessel must have at least Arc4 or1-A ice class.

Mandatory ship’s inspection

Mandatory icebreaker assistance


Flexible system. Admittance criteriadepend on season, ice class, NSR areaand actual ice conditions

Inspection not needed, onlydocuments. E-mail communication.

Information on the need of icebreakerassistance indicated in the Permission

Main changes in new NSR Navigation Rules

3. LEGISLATION

«IN» independent navigation;


36/46

Ships Icereinforcement

class

Icenavigation

mode

The Kara Sea The Laptev Sea The East Siberian Sea

TheChukchiSeaSouth-West

part North-East

part Western

part Eastern

part South-West

part North-East

part

S M L S M L S M L S M L S M L S M L S M L

No2 IN3 – – – – – – – – – – – – – – – – – – – – –

IS – – + – – + – – + – – + – – + – – + – – +

Ice1 (1D) IN – – + – – + – – + – – + – – + – – + – – +

IS – – + – – + – – + – – + – – + – – + – – +

Ice2 (1C) IN – – + – – + – – + – – + – – + – – + – – +

IS – + + – + + – – + – – + – – + – – + – – +

Ice3 (1B) IN – – + – – + – – + – – + – – + – – + – – +

IS + + + + + + – – + – – + – – + – – + – + +

Arc4 (1A) IN – + + – + + – – + – – + – – + – – + – + +

IS + + + + + + – + + – + + – + + – + + – + +

Arc5 (1A Super)IN + + + + + + – + + – + + – + + – + + – + +

IS + + + + + + + + + + + + + + + + + + + + +

Arc6 IN + + + + + + + + + + + + + + + + + + + + +

IS + + + + + + + + + + + + + + + + + + + + +

Arc7 IN + + + + + + + + + + + + + + + + + + + + +

IS + + + + + + + + + + + + + + + + + + + + +

Arc8 IN + + + + + + + + + + + + + + + + + + + + +

IS + + + + + + + + + + + + + + + + + + + + +

«IN» – independent navigation;

«IS» – with icebreaker support;

«S» – severe ice conditions

«M» – moderate ice conditions

«L» – easy ice conditions

Admittance criteria to NSR


37/46

Source: NSR Administration

Official long-term forecast of expected types of ice conditionsSeptember-October 2013

NSR MANAGEMENT

ICE CONDITIONS:


38/46


Three-days updates of the forecast of types of ice conditions

The official long-term ice forecast and subsequent updates are an essential aspect for the

organization of navigation on the NSR. Permission to sail through various sub-areas of the

NSR and the need for icebreaker support is determined on the basis of the ice conditions.

(forecast of 20/09/2013)

Kara Sea

Laptev SeaEast-Siberian Sea

NSR MANAGEMENT

ICE CONDITIONS:


39/46


Actual data on ice conditions

Kara Sea

Laptev Sea

East-Siberian Sea

NSR MANAGEMENT

ICE CONDITIONS:


40/46

External factors influencing development of the NSR

External factors

a) Main driver - freight market level for different shipping segments

b) Cargo base – price differences in Asian and Western markets

c) Availability of large ice class vessels in different segments

d) Fuel prices and other costs elements

e) Piracy threat – cost of insurance & protection, risk of non-delivery of cargo.

f) Environmental restrictions (IMO Polar Code Requirements in the future?)g) Geopolitics

4.1 EXTERNAL FACTORS

INFLUENCING NSR


41/46

TRADING PATTERNS ARE

EQUALLY IMPORTANT AS DIFFERENCE (SAVINGS) IN

DISTANCE

THE MAJOR TRADING ROUTES

IN THE WORLD ARE LOCATED

TOO FAR SOUTH FOR THE NSR

TO BECOME A RELEVANT

ALTERNATIVE FOR SUEZ,

PANAMA OR CAPE OF GOODHOPE

GIBRALTAR AND SINGAPORE

ARE THE GEOGRAPHICAL

”BREAK -EVEN” POINTS;

ANYTHING SOUTH OF THESE

POINTS IS OF NO RELEVANCE

LAST YEAR: SUEZ ABOUT 19 000 TRANSITS; PANAMA ABOUT 15 000 TRANSITS; NSR 46 TRANSITS

CARGO BASE


42/46

POLARCUS – SEISMIC VESSEL HAMMERFEST – NEW ZEALAND

TC-Rate USD 150 000 p/d

Routing

(13 kts) Distance Canal cost Bunker TOTAL

Via Suez 45,1 days usd 100 000 usd 1 622 000 usd 8 487 000*

Via Panama 39,4 days usd 50 000 usd 1 417 000 usd 7 377 000

Via NSR 31,5 days usd 370 000 usd 1 133 885 usd 6 228 000**

SAVING VERSUS PANAMA IS usd 1 030 000(* 70 000 ** 120 000 extra insurance)

Re-positioning.

COMMERCIAL ASPECTS

OF SHIPPING: NSR VOYAGE

CALCULATION


43/46

Bulk cargo Kirkenes – Shanghai (18 days shorter)

SUEZ NSR DIFFERENCE

Bunkers 44*700*33 1 016 000 26*700*33 601 000 415 000

TC - Cost 48 * 15 000 720 000 30 * 15 000 450 000 270 000

Canal 250 000 375 000 -125 000Ports 250 000 250 000 0

Total 2 372 000 1 795 000 560 000

COMMERCIAL ASPECTS

OF SHIPPING: NSR VOYAGE

CALCULATION

Port charges and Commission remain the same, NSR transit fee will be higher than Suez cost

Main cost elements are:

- timecharter cost (for LNG and Seismic)

- bunker costs for Tankers and Bulkers)


44/46

•SEASONAL NAVIGATION PUTS SOME LIMITATIONS ON THE FURTHER GROWTH OF TRANSIT TRAFFIC

• THE CURRENT FAVORABLE CONDITIONS FOR 4-5 MONTHS OF THE YEAR ARE NOT YET

SUFFICIENT FOR THE FORMATION OF NEW PERMANENT TRANSIT TRAFFIC FLOWS.

• NO CONTAINER LINES WILL MAKE SHEDULES FOR 5 MONTHS OF THE YEAR AS THEY

WILL ”LOSE” THE BIG PORTS LIKE SINGAPORE, INDIA, MIDDLE EAST AND

MEDITERRANEAN ON THEIR WAY TO EUROPE.

• NSR WILL REMAIN A NICHE (ARCTIC) IN A SEGMENT (ICE) OF THE MARKET BUT AS

CALCULATIONS HAVE SHOWN IT CAN BE A VERY INTERESTING NICHE.

• THE OBJECTIVE IS THAT THE NSR WILL BE CONSIDERED A SAFE AND PREDICTABLE

COMMERCIAL ALTERNATIVE TO TRADITIONAL ROUTES DURING THE ICE FREE SEASON.

CONCLUSION


45/46

FOR MORE INFORMATION VISIT WWW.ARCTIC-LIO.COM

http://www.arctic-lio.com/http://www.arctic-lio.com/http://www.arctic-lio.com/http://www.arctic-lio.com/


46/46

Thank you

Balmasov NSR Information Office 25 September 2013

Documents