Maritime Transportation: A Prerequisite for Arctic Development

MARITIME TRANSPORTATION

A PREREQUISITE FOR ARCTIC DEVELOPMENT

Alaskan Arctic Summit 2015Anchorage, August 24

Felix H. Tschudi

Tschudi Shipping Company

Centre for High North logistics

Tschudi Northern Logistics – Cross Border transport and Ship Agency

Kirkenes Industrial Logistics Area (KILA)Port and real estate development

Tschudi Aggregates

Tschudi Arctic TransitNorthern Sea Route and Oil Transshipment

The Tschudi Group in the Arctic

Tschudi Bulk Terminal

NSR

Europe/US

In the Arctic it is all about infrastructure!

Storage in Murmansk

9 Days to the Bering Strait!

ARCTIC RAILWAY ROVANIEMI-KIRKENES

www.arcticcorridor.fi

Many projects whic should be coordinated

The Kola Peninsula and Northern Norway form an all-year ice free wedge into the Arctic – a natural platform for serving logistics in the Barents Sea and the

remaining Arctic

Several Arctics; geographical, climatical and demographical conditions vary widely – one

size does not fit all!

INFRASTRUCTURE DEVELOPMENT AS CATALYST:Kirkenes Industrial Logistics Area - KILA.

1.000.000 m² area and 600 m deep water quays.

6

POTENTIAL USE:Marine Transportation and logistics including offshore base activities.Bulk handling facilities

NSR Transhipment Hub

NSR EasternTranshipment Hubs

Aleutian Islands, Nome, FE ports or all?

Nome

8

The Floating Quay: Exploring infinite arctic opportunitiesvisualized concepts for important Arctic segments

Illustrations: SnøhettaNote that buildings in the visualised concepts are not included in the cost estimates of the concrete shell.

FQHA-120120 x 35 x 9 m

TOURISM AND RESEARCHTourist portal and research facility

FQHA-8080 x 25 x 7 m

FISHING INDUSTRYFloating fish processing plant

2010 - 4 passages 111 000 mt 2011 - 34 passages 821 000 mt 2012 - 46 passages 1 260 000 mt2013 - 71 passages 1 350 000 mt2014 - 53 passages 2015 – similar pattern but some heavylift cargoes to Yamal LNG

Serving a wide variety of vessels and cargoes generating savings in time, cost and emissions; large tankers, bulkcarriers, LNG, reefer heavylift, multipurpose and offshore .

Turns a Freight Disadvantage into an Advantage

“China Begins Using Arctic Shipping Route That Could 'Change The Face Of World Trade‘

China is eyeing the Arctic for better access to resources.”

.What does it imply in practice? It means that we for the first time receive requests as the following:

3/ Furthermore, mv. Yong Sheng will be available to ship general Cargo from Baltic ports or a European ports to FarEast via Arctic Ocean with LayCan 25th Aug. to 5th Sep. 2015. Your company are welcome to book your Eastbound general Cargo with Cosfim Oy. The ocean freight rate could be discussed amicably

•Below pls find the info about shipping service by mv Yong Sheng.            ·             •Flag: HONG KONG (CHINA) Build: 2002 Home port: HONG KONG Possible LAYCAN:  25TH AUG. TO 5TH Sep. 2015•Name: YONG SHENG•Type: GENERAL CARG  Summer DWT: 19150 t  Gross Tonnage: 14357 THIS IS GREAT NEWS!

Transport of oil, gas, minerals and equipment by:

• Specialised shuttle multipurpose vessels

• Shuttle tankers

• Shuttle LNG carriers

• Shuttle bulkers

• Purpose built offshore vessels

• Seasonal liner services

NP

In the medium term – regional destinational shipping serving the developments in Siberia and Alaska will be the most relevant activities. Suitable transshipment infrastructure is a pre-requisite.

WHERE RIVERS MEET OCEAN THERE IS NORMALLY A PORT

THIS PROBABLY REPRESENTS THE LARGEST FUTURE POTENTIAL FOR TRANSPORTATION ALONG THE NSR

Yamal LNG - LNG carrier new building orders

Export of gravel from Kirkenes to Sabetta on the Yamal Peninsula

500 000 tonsin 2014

Continuing in 2015

Ship to Ship

HonningsvågNorth Cape

Alaska?

Oil terminals and transshipment of oil

The same could be done on the Pacific side.

ADAK

Why?

Because Asian refineries buy European crude and there is a market in Europe for Asian refined products

We have seen this cross trade along the NSR and under the right market conditions it will continue.

The logistics principle remains the same; keep the specialized tonnagein the ice and transship as close to the ice border as you can.

Oil and Oil Products

Dutch Harbor

Frozen Fish

•100 000 tons of mackerel from Norway to the Far East

•100 000 tons of haddoc from Dutch Harbor, Alaska to the Continent

•17 days saved both directions. 34 days saved on a round voyage.

•Frozen fish going in both directions.

•Refrigerated storage in Nome in addition to Dutch Harbor???

Russian sanctions on import of fish creates a need for new markets

Frozen Fish

10 days

11days

Offshore

Korea –Bering Strait - Alaska 11 days

Kirkenes - Bering Strait 10 days

The North Sea is the second largest off-shore market in the world moving north towards the Barents Sea.

Russia starting in Kara Sea, Bay of Ob, moving towardsLaptev and Chukchi Sea. Not to forget Sakhalin and Okhotsk.

Alaska North Slope and Chukchi Sea.

The NSR will offer tremendous savings in moving equipment between the Alaskan, Russian and Norwegian markets

Offshore Rigs and Supply vessels

SHIPPING SUMMARY

There will be an increase in traffic for sure:

LNG and CondensateOil and Oil productsMinerals and metalsSupplies, equipment and structures related to the oil, gas and mining industriesFish

We do not believe in big volume container business.

Significant development: The launch of the COSCO NSR Line

The Arctic: Where Gas meets Ore

The Barents region – potential for industrial value creation

Alaska is in the same situation

Associated or “stranded” gas can be transported as CNG (Compressed Natural Gas) directly from the offshore installations to be used for low emission industrial processing of regional rawmaterials employing natural gas instead of coal eg. Direct Reduced Iron (DRI) production

This requires the offshore oil and gas and onshore mineral and metal producers to join forces with processing industries.

Political will is a prerequisite for incentivising the stakeholders into realising these joint opportunities.

Some potential gas and mineral and metal based processing potential

• Iron (Direct Reduced Iron)• Carbon Black (high purity carbon

materials)• Petrochemical industries• Quarts to silicon - potential for Direct

Reduction to solar grade quality• New refining and agglomeration methods

for quality upgrading

Kirkenes, 4th October 2012 26

Fe

Ni

Al

Fish

Energy

Raw materials

Future:Today:

Consumables

Vision

THOUGHTS ON EMERGENCY PREPAREDNESS AND COOPERATION – JOINT NECESSARY INFRASTRUCTURE

• The best safety measure against accidents is the Russian mandatory ice breaker escort and regulatory requirements.

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

• The increased economic activity in the region will improve the general preparedness to respond to potential accidents due to higher availability of vessels, equipment and people provided necessary coordination is facilitated.

Thank youfor

yourattention

CO2

Alloying metals Cr, Ni, Mn, Mo, Si, REE

Legering

Export

• Fishfarms on land• Drying• Freezing• Electricity

CH4 Export

Natural gas

Export

Direct reduced iron (DRI)

LKAB pellets

EAFSteel

minimillElectricity

Export

CO2

stor

age

PCC

Integrated gas-mineral processing

Exportjernmalm

Iron ore

Pellets plantBOG

Pilot processesFermentationP3HB/ectoin

Solid carbon C(s)

CarbonBlack Reaktor

Hydrogen

Quartz

Karbonater, dolomitt, olivin

Olefins

Reduction to trichlorosilan

e

Plastic;composites

Export

ExportEpitaxial solar cell

Slag forming

Steel slag

Export

GCC, PCC

Carbonate processing

F2013-11 LNG bunker for marine vessels

F2011-12 Gassmaks Ofoten

F2009-16 Industriutvikling i Nord Norge 2030

F2013-21 CO2 binding with olivine

F2010-01 Gassmaks Nordland - mulighetsstudieF2011-09 P3HB bioplastic from methane

F2012-17 Conversion LKAB pellets plant to natural gas

F2012-16 GeoGass project conclusions

F2013-10 Gas demand and branchpipe landfall to Ofoten and Nordkalotten

F2013-13 Direct reduction of iron in fluid bed

F2013-25 Agglomeration mineral finesF2013-27 Gas-Mineral Processing statusF2014-02 CO2 storage and utilisationF2014-09 PUFFIN report; Narvik: where Swedish ore meets Norwegian gasF2014-13 Pilot Technology ProcessesF2014-14 Integration of a DR-plant in NarvikF2014-17 Reduction technology: specfication of a Direct Reduction plant in Narvik

NORUT Narvik studies

F2014-xx PhD study by Reza BeheshtiF2015-xx PhD study by Chen Chen

Carbon anode

F2014 Borealis Solar business plan

Waste energy

Hot briquetted iron (HBI)

Gas Power stn?

El-kraft