Russia signs deal with Dubai logistics company to navigate thawing Arctic
ST. PETERSBURG, Russia – A Russian company that seeks to take advantage of climate change in the Far North won key commercial support on Friday when DP World, the massive Dubai-based logistics and ports company, signed an agreement to help to manage operations along sea lanes in the thawed Arctic Ocean.
While climate change has brought disasters to much of the world this summer – floods, fires and heat waves – the Russian project envisions some sort of silver lining in the melting arctic ice in terms of both benefits and reduced costs. additional emissions, as the road shortens the shipping distance between Asia and Europe.
The sea lanes, known as the Northern Sea Route, are already in use. Russia began to ply the waters in the 1930s. But most goods are transported only between Russian ports, or in the case of oil and natural gas from Siberian fields, to export markets.
What’s new is the focus on shipping along the route between Asia and Europe – the business DP World agreed to cooperate on Friday to grow.
The deal, which company executives signed, theatrically, on the deck of a boat circling the canals of St. Petersburg, gives the Russian project a commercial seal of approval from one of the largest logistics companies in the world. Climate change is at the heart of the business.
“What prompted us was that the ice melted,” Sultan Ahmed Bin Sulayem, CEO of DP World, said of his decision to invest in the Russian sea route.
Although ice still obstructs the Northern Sea Route for much of the year, it is now fairly sporadic in the summer that so-called ice-class ships, those whose reinforced hulls allow them to navigate through pack ice, can sail. much of the distance without icebreaker escorts.
As part of the deal, DP World and the Russian company that manages the Northern Sea Route, Rosatom, will design a fleet of ice-class container ships.
The companies will also study the development of Russian ports at both ends of the seaway – in Murmansk and Vladivostok – to handle the transfer of containers from ice-class ships to regular ships. This is necessary so that the more expensive ice class ships only sail in the Far North, and not all the way to the container destination.
“As a company involved in logistics and port operations around the world, this is a unique place where we can offer our expertise,” said Mr. Sulayem. “We are really committed to making it a success. DP World has not disclosed how much it plans to invest.
Extreme weather conditions
Climate change has been particularly pronounced in the polar regions of the world. Forest fires, for example, broke out this summer in the tundra of Russia’s far north.
Warming has led to a drastic reduction in sea ice. Melting exposes Russia to new security threats along its northern border, but also creates trade opportunities, including the opening of new sea lanes.
The minimum summer pack ice over the ocean in recent years is about a third lower than the 1980s average when monitoring began, researchers from the Colorado-based National Snow and Ice Data Center said last year. The ocean has lost nearly a million square kilometers of ice and is expected to be virtually ice free in summer, including at the North Pole, by mid-century.
Executives from both companies stressed that the shorter route has the potential to reduce emissions from ships.
Shipping time from Busan, South Korea to Amsterdam, for example, is 13 days shorter on the Northern Sea Route than on the Suez Canal. The growing shipping schedule, however, is making it easier to extract oil, natural gas and coal – all of the warming fuels – in the Russian Arctic.
Rosatom, the Russian state nuclear company which is the legally designated operator of infrastructure along the route, has invested in opening up the Arctic Ocean as an alternative to the Suez Canal.
Prior to the signing, Rosatom hosted DP World executives, foreign ambassadors and journalists on a boat trip to St. Petersburg that passed the Baltic shipyard, where four new nuclear icebreakers are under construction. . Each cost around $ 800 million, according to Rosatom.
Far to the north, the company is also dredging ports on Russia’s north coast to accommodate larger ships.
He installed a floating nuclear power plant in a port, Pevek, to provide electricity to facilities on the shore.
And it coordinates investments in aids to navigation, search and rescue capabilities and better ice mapping, according to presentations from company executives and Russian government officials.
Sailing in the thawing Arctic Ocean is “a new activity on a global scale,” said Alexei Likhachev, director of Rosatom.
“In Russia, we are also suffering from climate change, forest fires where they have never happened before, tornadoes and torrential rains where we did not expect,” he said. But that doesn’t mean the country shouldn’t use sea lanes that open up longer during the year as the ice recedes, he said.
The goal of container shipping on the Arctic Ocean, he said, is “to return to the status quo.”