Japan and South Korea have begun commercial shipping of oil products along a seldom used route through the Arctic's melting ice, lending credibility to a new frontier in global trade that promises to slash shipping costs while averting the geopolitical risks associated with ferrying cargo through the Suez Canal.
Japan
and
South
Korea
have begun commercial
shipping of oil products along a seldom used route through the
Arctic
's
melting ice, lending credibility to a new frontier in global trade that
promises to slash shipping costs while averting the geopolitical risks
associated with ferrying cargo through the
Suez Canal
.
Energy companies from both nations have chartered ships through the so-called
Northern
Sea Route
carrying oil products and other cargo destined for
sale in
Europe
and
Asia
,
traders and shipbrokers in
Singapore
said.
Some cargoes of iron ore and gas condensate--a form of hydrocarbon--have
previously been transported along the route. And last year, Russian gas giant
Gazprom sent the first liquefied natural gas shipment to Japanese power
producers in a test run. Still, this is the first time oil-derived products
have been moved in such large volume through the route, dubbed the
Northeast
Passage
by ancient maritime explorers.
The
Northern Sea Route
cuts
through the
Arctic Ocean
along
Russia
's
northern coast, providing a short cut between
Asia
and
Europe
--and
an alternative to the long-established shipping lane through the
Suez
Canal
via the turbulent
Middle East
--a
region fraught with geopolitical risks that can inflate commodity prices.
Recent political unrest in countries surrounding the canal, most recently in
Egypt
, has
intensified concern about overreliance on a single, volatile shipping route. Another
key lane around the horn of
Africa
is
also available, but adds tens of thousands of dollars in shipping costs and
entails much longer voyages.
The latest shipments are ferrying oil products eastward along the route for
sale in
Japan
, as
well as high-quality diesel westward to
Europe
from
South
Korea
. Last week,
Japan
received one cargo of naphtha--a raw material used to produce petrochemicals
and plastics--through the
Northern Sea Route
. Another
will arrive later this month, Singapore-based traders said.
"A carrier with 80,000 tons of naphtha has arrived at our Mizushima
factory," a Tokyo-based spokesman for Asahi Kasei Chemicals Corp.
confirmed, adding that the Arctic route had been chosen by the seller, which he
didn't name.
The second cargo of around 45,000 tons of naphtha is scheduled to arrive at the
Japanese
port
of
Chiba
by
early September aboard the SCF Yenisei, while a tanker called the Propontis
carrying around 90,000 tons of high-quality low-sulfur diesel is scheduled to
leave
South Korea
for
Europe
this
week, shiptracking data showed.
A typical 90,000-ton cargo from
South
Korea
to
Europe
would
take approximately 35 days and cost $2.1 million at current freight rates via
the
Suez Canal
. The short-cut through the
Northern
Sea Route
could shave as much as 10 days from the journey
and the equivalent in fuel and shipping costs, offsetting other additional
costs such as insurance and ice-breaker tariffs.
The rise of commercial shipping along the
Northern
Sea Route
is particularly significant for
Asia
's oil
and gas sector. Interregional trading of oil, liquid fuels and natural gas is
based on arbitrage--the price difference between regions--and lower shipping
costs widen arbitrage to a great extent, thereby boosting trade levels.
"The most significant impact will be on the energy sector, especially
between the
Far East
and
Europe
,"
said Gary Li, a senior analyst at IHS Maritime, adding that Asian countries
were well placed to exploit the route to access emerging oil and gas markets in
Europe
, especially
Russia
.
"For China especially, the ability to access energy via the Northeast
Passage would allow it to diversify risks to its energy supply away from the
Strait of Malacca" in Southeast Asia, Mr. Li said.
Asian countries have been steadily pushing to gain influence in the Arctic
region, with
China
,
India
,
Singapore
,
Japan
and
South
Korea
in May obtaining observer
status at the Arctic Council, a body focused on boosting the region's trade
potential.
Earlier this month, Chinese shipper Cosco sent its first container vessel from
China
to
Europe
on a
test run along the new route, which it said would not only cut shipping costs
and carbon emissions, but also bring it closer to western markets and foster
economic development in Chinese coastal areas.
South Korea
plans
to sign agreements with
Russia
to
develop an Arctic port, its Ministry of Maritime Affairs and Fisheries said in
a recent strategy document. It said its shippers Hyundai Glovis Co. Ltd.,
Hyundai Merchant Marine Co. Ltd. and Hanjin Shipping Co. Ltd. would conduct
test runs on the Arctic route this month with different types of cargoes,
including crude oil.
The
Northern Sea Route
has
become viable as a commercial shipping lane only in the past few years, as climate
change contributes to the thinning of ice in the region for a longer period
each year. Countries like
Russia
stand
to benefit from providing permits, port services and tariffs for ice-breakers,
an accompanying ship often needed to clear the path for vessels.
However, the speed at which this route can develop is limited, as the ice is
seaworthy for only around four months a year--although this timeframe may
expand if climate change accelerates. It also needs special "Ice
Class" ships to withstand extreme cold weather conditions, which are few
in number.
Rising industrialization of the
Arctic
has
also inflamed environmental groups, including Greenpeace, which are concerned
that any oil spill or pollution in the Arctic region may result in irreparable
damage to a currently pristine natural environment.
"The Arctic route is unlikely to be game-changing in the short-to-medium
term due to limitations," Hong Kong-based analyst Bonnie Chan at Macquarie
Group said, but added that high fuel costs and rising oil prices would
undoubtedly keep shippers interested.
Orders for Ice Class ships are pouring in.
South
Korea
's advanced ship building
industry, the world's largest, has received a spate of orders for Ice Class LNG
carriers to carry natural gas from remote drilling wells in
Norway
and
Siberia
to
Asian consumers.
As the Arctic fleet expands, the
Northern
Sea Route
looks positioned to become a key conduit to feed
Asia
's
vast energy appetite.
Διαβάστε ακόμα
Παρ, 26 Ιουλίου 2024 - 16:04
Παρ, 26 Ιουλίου 2024 - 16:02
Τετ, 24 Ιουλίου 2024 - 15:10
Τετ, 24 Ιουλίου 2024 - 15:06
Τρι, 23 Ιουλίου 2024 - 16:51