Japan presented a draft of a new concept of trade and economic cooperation in the Far East and the Arctic
Japan intends to actively participate in the development of the Northern Sea Route (NSR). According to the press service of the Ministry for the Development of the Russian Far East and the Arctic, this topic was discussed during a meeting between Alexei Chekunkov, the Minister, and Toyohisa Kozuki, the Japanese Ambassador in Russia.
According to Amb. Kozuki, the NSR logistics is 40% more efficient than traditional shipping routes. Japanese companies are already transporting LNG along the Northern Sea Route using LNG carriers.
The launch of a regular container line via the NSR is one of the promising areas of Russian-Japanese cooperation in the Arctic.
Let’s add that since 2019 the “Mitsui – Jogmec” consortium has been participating in the ‘Arctic LNG-2’ project for the production of LNG. The planned volume of Japanese investment in the project is $ 3 billion. The start-up of the first line is scheduled for 2023, with a phased commissioning of the facility in 2023-2025.
Japan has developed and presented to Russia a draft of a new concept of trade and economic cooperation in the Far East and the Arctic. It is aimed at enhancing trade and economic cooperation and involves expanding interaction in several directions at once: such as energy, logistics, fish processing industry, port and transport infrastructure, urban environment, tourism.
Comments: Japan has been reluctant to define its Arctic policy for a long time. Earlier, Japanese shipping companies were skeptical about the idea of transporting goods along the NSR. It is possible that the cabinet of the new Prime Minister Suga has revised the overly cautious policy of its predecessor, Shintaro Abe, in relation to economic, transport and logistics cooperation in the Arctic. And this is logical, because the other NEA powers, China and South Korea, have already engaged in a number of serious projects in the Polar Ocean.
The project is planned for implementation by the “Yakutsk Fuel and Energy Company” (YaFEC). According to Andrey Korobov, YaFEC Director General, it is planned to build a main gas pipeline with a length of about 1.3 thousand kilometers from Yakutia to the coast of the Sea of Okhotsk in the Khabarovsk Territory, where LNG production facility will be constructed.
The company holds licenses for the commercial development of the Srednevilyuisky and Mastakhskoye gas condensate fields, the exploration and development of the Tolonsky area. Recently YaFEC won the auction, obtaining the right to produce hydrocarbons in the North, South and Maysky blocks with a total area of 43.5 thousand square meters with total reserves of 359 billion cubic meters of gas.
“We must prepare the company for the implementation of the largest LNG project in Russia – ‘Yakutsk LNG’, the implementation format of which directly depends on the YaFEC resource base,” commented A. Korobov.
Currently, the largest LNG production in the Far East region is located on Sakhalin Island. The specialized sea terminal in the village of Prigorodnoye annually ships up to 9.6 million tons of LNG. The planned LNG plant + terminal in Khabarovsk Territory will be capable of shipping up to 18 million tons of LNG annually.
Comments: This ambitious project is risky, challenging and costly, but if it is accomplished the deserted areas of the Far East of Russia will get a powerful boost in its economic and social development. Diversification of LNG supply options located close to potential regional consumers is definitely attractive for all project participants.
On December 18, the “Admiralty Shipyards” in St.Petersburg launched an ice-resistant self-propelled marine platform (LSP) ‘North Pole’ of project 00903, ordered by the Federal Service for Hydrometeorology and Environmental Monitoring (RosHydroMet).
The contract between JSC ”Admiralty Shipyards” and RosHydroMet was signed in April 2018. The keel was laid down on April 10, 2019. The construction of the vessel is being carried out within the framework of the federal program for the socio-economic development of the Arctic region of the Russian Federation.
LSP ‘North Pole’ has the functionality of a research center and is designed for year-round expeditions in the high latitudes of the Arctic Ocean. The vessel is designed to conduct geological, acoustic, geophysical and oceanographic research; it is capable of passing through ice without icebreaker support, as well as operating heavy helicopters such as MI-8 AMT (Mi-17). The LSP will provide comfortable and safe working and living conditions for the crew (14 people) and scientific personnel (34) at the polar station at temperatures down to -50o and humidity 85%.
The main operational and technical characteristics of the LSP: length – 83.1 m; width – 22.5 m; displacement – about 10,390 tons; power plant – 4200 kW; speed – at least 10 knots; hull strength – Arc8; autonomy in terms of fuel reserves – about 2 years; service life – at least 25 years.. The ‘North Pole’ ice-resistant self-propelled marine platform is classified as KM (*) Arc5  AUT1-C HELIDECK-F Special purpose ship by.Russian Maritime Register of Shipping:
“Admiralty Shipyards” have extensive experience in building ice-class ships. In 1959, the shipyard built the world’s first nuclear icebreaker ‘Lenin’; in 1979 the research vessel ‘Otto Schmidt’. Since the early 2000s the shipyard constructed a series of five ice-going tankers with a deadweight of 20,000 tons; Arctic tankers ‘Mikhail Ulyanov’ and ‘Kirill Lavrov’ with deadweight of 70,000 tons; scientific expeditionary vessel ‘Akademik Tryoshnikov’.
FSUE “Rosmorport” has begun testing equipment for unmanned navigation, the press service of the enterprise said. The project is being implemented with the support of the Ministry of Industry and Trade of the Russian Federation with the participation of the Ministry of Transport and the Russian Maritime Register of Shipping.
Last year, “Rosmorport” allocated a bundle of vessels as part of a dredging caravan for testing the technologies of unmanned navigation within the framework of the Marine Industry Center of the National Technology Initiative. The “Redout” dredger was equipped with a remote control station for the “Rabochaya” dredging scow, from which the scow will be monitored and controlled. Special equipment was also installed on the scow.as part of a single basic technological platform.
Full-scale tests began this November. Testing takes place in the Kerch Strait near the port of “Kavkaz” under the general guidance of the working group of the ‘Marinet’ industry center. The distance from the dredging area to the offshore dump is about 30 km. This distance is planned to be covered by the scow in remote or automatic control modes.
“Rosmorport” expects that in the future one crew on the lead vessel – the dredger, will be capable to simultaneously control all the ships of the dredging convoy at once. This will optimize the number of crew on board and improve the coordination of dredging activities.
Other means of unmanned technologies are also assessed by “Rosmorport”, in particular, remote pilotage, the use of unmanned service boats and aerial drones for monitoring the ice situation.
Comments: The approach by “Rosmorport” to the issue of unmanned vessels seems pragmatic and justifiable. Lower scale projects like dredging, harbor pilotage, small crafts operations can be performed relatively safe and secure due to its proximity to control stations. Larger vessels in high seas are much more vulnerable to equipment failures and foreign intrusion with inability for the real time correction or repair.
Residents and guests of the Kuril Islands will not suffer from the budget cuts in the region, the government promises. 13.9 billion rubles have been allocated for the “Islands Development” program by the regional treasury. Kuril residents are not threatened with forced isolation either – Sakhalin transport minister Valery Spichenko assured that the region will continue to subsidize as many flights to the islands as necessary. Moreover, in spring a brand new motor vessel will join the airplanes and the old ship “Igor Farkhutdinov”.This year, the Nevsky Shipbuilding Plant is completing the construction of two vessels for the Kuril Islands. The sea trials of the first ship have already begun, and the second is to be tested in the near future. We are waiting for the ships to arrive at Sakhalin in March 2021, and in April we plan to put the first ship on the line,” Mr. Spichenko reported.
The government has less specific information about the new ferries. One of them has already been towed to Vladivostok for completion at the “Dalzavod” Shipyard, the second is still at the Amur Shipyard in Komsomolsk-on-Amur. So far, the planned completion date for both vessels is set for 2022, but it may be changed for later. The Amur Shipyard already had difficulties with the construction of both ferries, and the date of their commissioning had to be postponed.
Another good news for travel enthusiasts is that even the global economic crisis and COVID-19 pandemic have not forced the regional authorities to abandon plans for “sea trams” along the Western coast of Sakhalin Island. Now the regional Ministry of Transport is engaged in the selection of a vessel for cruising along the picturesque coast. It should be comfortable and fast. Finally, railroad news. Three new rail buses, codenamed “Orlan”, are due to arrive in the region this month. Two of them will also be equipped for long-haul lines and, possibly, will ride between Yuzhno-Sakhalinsk and Poronaysk Town or even Nogliki settlement. 18 new rail cars have also been purchased recently by the passenger company “Sakhalin”.
The draft order of the Ministry of Transport of Russia “On approval of the required investment port dues for 2021-2023” has been published. The draft document and the explanatory note to it are posted on the Federal Portal for the placement of draft regulatory legal acts. Public discussion of the draft will last until November 20, 2020.
The calculation of the investment port dues (IPD) for 2021-2023 was made by FSUE “Rosmorport” based on actual data on the total gross tonnage of vessels who entered Russian seaports during 9 months of 2020. A prerequisite for the introduction of the IPS in Russian seaports was a sharp and long-term decline of the Ruble against US$ (more than 2 times), the main currency of foreign trade (90% of ship calls at the seaports of the Russian Federation are carried out by vessels of foreign navigation). Assessment of the amount of lost funds from levying port dues is the basis for calculating the permissible (maximum) aggregate amount of port dues.
To assess the impact of the introduction of the ISS on the competitiveness of Russian seaports, the ‘Rosmorport’ performed a comparative analysis of the cost of the call of the same vessel in Russian and foreign seaports – competitors within the boundaries of the North-Western and Southern geographical sea basins. There is no competitive environment for the ports of the Far East.
For Russian ports located in the Northwest Basin, the main competing ports are the ports of the Baltic and North Seas. Calculations based on a sample of 10 foreign and 5 Russian seaports show that the total amount of port dues in domestic ports is lower by 30% – 60% of the average level for the basin, even taking into account the introduction of the IPD and the indexation of the current rates.
Within the borders of the Southern Basin the main competitors of the are the ports of Ukraine, in which the rates of port dues are set in US dollars and are generally 2 – 2,5 times higher than in Russian ports of Novorossiysk and Tuapse.
Taking into account the establishment of the size of the ISS at the level proposed by ‘Rosmorport’, the cost of a ship call in currency terms will be lower than the pre-crisis level.
In its turn, the Federal Antimonopoly Agency of Russia (FAA) has prepared a draft order on the approval of IPD rates in the ports of the Russian Federation. The list includes the Bolshoi Port of St. Petersburg, Primorsk, Ust-Luga, Vysotsk, Novorossiysk, Tuapse, Vostochny, Nakhodka, Vladivostok, Vanino, De-Kastri, Prigorodnoye and Murmansk. The fee in 2021 will be 12.31 rubles / 1 GT (gross tonnage of the vessel). The FAA proposes to set a multiplying coefficient of 1.235 for 2022 by 2021 and 1.406 for 2023 by the size of 2021.
The draft order establishes that the indicated IPD rates are the maximum. ‘Rosmorport’ has the right to apply IPD rates at or below the maximum level.
“As for the IPD, I said that it was introduced only in 13 of our 67 ports, that is, exactly where it is needed,” said the head of ‘Rosmorrechflot’ Federal Agency Alexander Poshivai. “And there, in these ports, where it was introduced, its impact on the cost of a ship call will be insignificant.”
*** The government of the Russian Federation approved in 2019 the rules for the IPD collection for the ships of foreign navigation. The amount of the fee must be determined upon agreement between the Ministry of Transport and FAA. IPD is not collected from ships entering the port without carrying out cargo operations or servicing passengers, as well as from transit and ships that repeatedly enter the port after leaving it by the decision of the captain of the seaport or for carrying out deviation procedures.
Mr. Arkady Korostelev, President of the FESCO Group, addressed “Rosatom” with a proposal to “start systemic interaction”. In the Korostelev’s letter sent to the head of the state corporation Mr. Alexei Likhachev last week (RBC possesses this document, its authenticity was confirmed by a source close to FESCO), the prospects of such a partnership are explained as follows:
FESCO already provides transportation of more than 30% of cargo (or more than 10 thousand tons annually) for nuclear power plants under construction abroad;
in “conditions of high market competition and geopolitical turbulence” Korostelev sees prospects in combining efforts of both companies to develop the Northern Sea Transit Corridor (part of the program for the development of the Northern Sea Route (NSR), which is operated by the state corporation). As the top manager reminds, FESCO annually delivers more than 200 thousand tons of cargo to the Extreme North, Siberia and the Far East as part of the ‘Northern Delivery’ program. FESCO’s capacities allow “to form the Arctic logistics and facilitate the successful implementation” of the NSR development program, he is sure.
RBC sources claim that the project has been initially approved by ‘Rosatom” management. The partnership, which is planned to be announced in the near future, provides, in particular:
– “Rosatom” will become the management company for the Vladivostok Commercial Seaport (VMTP), the main asset of FESCO group, early next year;
– The state corporation will take part in the investment program for the development of the port.
RBC’s interlocutors do not disclose the amount of possible investments. But one of them recalls that last summer at a meeting of the NSR international public council, Mr. Alexander Neklyudov, “Rosatom Cargo” Director General, said that the state corporation is ready to invest $ 274.5 million in “one transport and logistics hub”.
As follows from his presentation devoted to the development of the Northern Sea Transit Corridor, the state corporation planned to choose the transport and logistics hub “Vostok” (“East”) just before the end of 2020. At the same time, Neklyudov announced that international partners would be involved in the development of this project – negotiations on the creation of a joint venture are underway with the Arab port operator “DP World” and the logistics company “Integrated Service Solutions GS” (ISS GS, a joint venture of the “Creon Energy Fund” and the “Dubai Investment Corporation”). According to him, the joint venture will handle commercial transportation from Murmansk to the North-East Asia.
The ongoing conflict over the ownership of the Vladivostok Commercial Seaport attracted much attention and possibly has led to a political decision to pass the control over this strategic asset to “Rosatom” state corporation, which is one of few successful actors in Russian business world.If this news is confirmed, the nomination of Vladivostok seaport as the NSR Eastern hub raises a number of questions. In particular, whether the Arab investors will prevail in creation of the eastern arm of the NSR transit corridor and what role in the project will be played by Korea, China and Japan who are seemingly interested in the Arctic transit.
Russia has begun to verify the number of sunken vessels in order to clear ports and inland waterways, industry representatives told RG.RU. According to their estimates, more than a thousand sunken vessels are awaiting recovery.
21 sunken ships have been identified in Magadan seaport alone. Reconciliation of information on the number and location of sunken ships was ordered by “Rosmorrechflot” federal agency and carried out by the Harbor Master’s Service together with the regional Ministry of Natural Resources. They found out how many ships are resting at the bottom in Nagaeva Bay. According to the head of “Rosmorrechflot” Alexander Poshivay, the depths of the bay make it possible to approach the sunken ships in order to raise them. The Marine Rescue Service has all the resources to tackle this issue.
The Ministry of Transport as a whole is preparing changes in legislation to solve the problem of sunken ships. “A bill is being developed to amend the Code of Merchant Shipping and the Inland Waterway Transport Code. It will regulate the disposal of property sunk in sea areas and on inland waterways,” the department explained to RG.RU.
In August 2020, Prime Minister Mikhail Mishustin visited Magadan and, after finding a “ship graveyard” in the port ordered it to be liquidated. Interested departments and regions should evaluate the issue of lifting wrecks throughout the country.
In the Far Eastern Federal District alone, 600 sunken objects have been identified in the coastal zone, a source in the industry said. Reconciliation of sunken ships should be carried out in all regions. According to the data two years ago, 837 sunken objects were recorded on inland waterways, and at least 144 sunken ships within the seaports and approaches to them, experts say. Ship wreckage in the ports and waterways represents a serious ecological and navigational threat. Its clearance is a complicated and often costly affair, but it has to be done.
The situation with underwater metal wreckage in the Eastern sector of Russian Arctic is even worse. Besides the presence of sunken vessels and small boats, there also is an unaccountable number of cars, tractors, other heavy equipment and barrels lost in the process of uploading cargo to the shore.
Sakhalin Shipping Company (SASCO) celebrates its 75th anniversary today. This date is significant not only for its employees, but also for every inhabitant of the Sakhalin Island. For 75 years, the shipping company has been carrying out cargo and passenger transportation, providing a connection between the island region and the “mainland”.
In 2019 compared to 2018, the growth in the volume of transported goods was 20%, the increase in passenger turnover was 44%. Hence SASCO management has achieved significant improvement in financial performance. In particular, the growth of revenue for the same period amounted to 24%, the company’s net profit increased by 56%, the decrease in debt obligations – by 5%. Currently, the SASCO fleet consists of 24 vessels, including 4 ferries
According to Mr. Alexei Pavlov, SASCO CEO, despite the coronavirus pandemic which is detrimental to the entire global economy, the company’s management has identified growth drivers for itself in the short term.
The first is the development of transportation along the Northern Sea Route. SASCO has a specialized fleet for this purpose, with a wealth of experience in the ship crew. This year, as in the previous several years, the shipping company successfully delivers cargo to the port of Pevek, which has a limited navigation period. The plans are to purchase a vessel with a deadweight of about 10 thousand tons equipped with a crane device with a lifting capacity of 60 tons. This will allow the company to diversify its activities for the development of transportation scheme along the NSR. The fact is that the ports along its entire length are not sufficiently equipped, and unloading to an unequipped shore is often required.
The second growth driver is participation in infrastructure projects related to the oil industry, where SASCO is practically not represented until now.
As for the current situation and short-term goals, as the CEO noted, the main tasks in connection with a noticeable economic decline are to maintain positions in such areas as general bulk cargo transportation, liner and ferry transportation, as well as retain human resources.
A dialogue with the government of the Sakhalin region is underway about the fate of two new ferries for the Vanino – Kholmsk line, which are scheduled to be commissioned in 2021. SASCO is ready to accept into operation the ferries “Alexander Deev” and “Vasily Oshchepkov“. Taking into account the fact that these vessels are being built on budgetary funds, the company’s management outlined its vision of interaction with government agencies with a positive solution to this issue. SASCO has recently acquired a powerful ‘Lev Ivanov’ tugboat, which will make it less dependent on weather conditions when ferries enter the port and navigate to the berth.
…I am no longer surprised at the absurdity of the reality around us.
The “holy war” against the COVID-19 pandemic, despite the “titanic” efforts of the governments is clearly loosing in favor of the pernicious coronavirus. The side effects of this “war” – the restriction of individual freedoms and rights, the collapse of the economy, the closure of borders, the growth of mistrust and suspicion between people and nations – are two orders of magnitude higher than the damage from the disease itself.
But ultimately, sooner or later human race will come out of the coronavirus deadlock where it has driven itself, spinning the flywheel of information hysteria. And then the realization will come that the old security threats have not disappeared. Moreover, they will be more difficult to address given the aforementioned side effects of the 2020 Pandemic.
Last weekend, the UN Treaty on the Prohibition of Nuclear Weapons entered into force after it was ratified by 50 UN member states. This is an event of a historical scale. But it passed almost unnoticed against the background of reports from the fronts of the “War on Coronavirus”. Skeptics will say something like “what kind of ban on nuclear weapons can we seriously talk about? The nuclear powers will never give it up!”. Sure, they will be right. But this righteousness contributes to the preservation and even strengthening of the existential threat to the survival of mankind.
I want to focus on two aspects.
First, we see a steady erosion of the international strategic arms control system. Following the ABMD, INF, ‘Clear Sky’ treaties, the key START-III agreement expires soon. If Donald Trump wins the presidential election on November 3, there will be little chance of extending START process. As a result, the activities for limiting and reducing strategic offensive arms, which for 45 years have ensured stability and relative security in the world, will be interrupted.
Unfortunately, this applies not only to a rather formal-bureaucratic negotiation process on arms limitation. On October 14, Washington hosted a regular scheduled meeting of the Defense Secretaries of the United States and the Republic of Korea. Observers noted that for the first time in the past 12 years the phrase that the United States intends to maintain a certain level of military presence in the Republic of Korea has disappeared from the final communiqué of the meeting. The traditional press conference of the two ministers was also canceled. It is known that President Trump seeks to shift the burden of maintaining the forward bases and contingents of the US Armed Forces onto the American allies, as well as to force them to fight in the conflict regions of the world instead of the Americans, or at least pay for these military adventures. “Nothing personal, it’s just about the money”. But such pragmatism tactically can provide additional votes, but in a strategic perspective it can lead to disaster.
Let’s think about how the situation in Northeast Asia will develop if the US curtailed its military presence here. It is highly doubtful that Japan and the Republic of Korea surrounded by “2,5” nuclear powers, will continue to rely on the abstract US nuclear umbrella. With a certain degree of cynicism, it can be argued that the bases and contingents of the US Armed Forces in Japan, South Korea, and even in Europe are needed not so much as a military force, but as hostages in case of a major war. No American president would dare to abandon military intervention in a conflict where the lives of US military personnel who are there with the approval of Congress are threatened. But if they are not there, then the outcome may well be limited to statements of “Atlantic” or, say, “Pacific” solidarity, without concrete actions – why risk the lives of Americans in an “alien” war?
If the negative scenario prevails will Japan and the Republic of Korea resist the temptation to create their own nuclear deterrent assets? Given the huge stocks of plutonium in Japan and the well-known nuclear arms program in Korea, closed (?) more than 30 years ago, such a potential can be created in a matter of months…
Of course, this is a very abstract scenario. But not impossible, unfortunately.
Secondly, the ease and speed of the spread of COVID-19 around the world, as well as the obvious helplessness of the official authorities in the fight against the pandemic, make us think about the threat of bioterrorism in a new way. After all, if a primitive and not particularly lethal coronavirus has caused such shocks, what will happen if a really serious product of genetic engineering appears? Technically and technologically it is quite possible to do this, both covertly and quickly. And we are talking about terrorism. States have long and quite pragmatically abandoned biological weapons, since its military use could have led to uncontrollable consequences, including for their own citizens. But for terrorists such a weapon is just the right choice…
I could specify a number of other potential security threats that we may face literally the day after the “final victory” over the coronavirus. But for now, the above mentioned is probably enough. The team of authors and editors of the Asia-Pacific Journal of Marine Science & Education, which has developed over nine years, prefers publications on the “direct” profile of the Journal. But we also cannot ignore “external” problems. It is difficult to analyze and plan the development processes of the maritime industry and international professional education without taking into account everything that is happening around and directly affects the industry and the region. Perhaps there will be a thematic issue of our magazine in 2021 devoted to the impact of the pandemic on the industry and ways to overcome the crisis in the regional economy. But, our main desire is to celebrate the 10th anniversary of the Journal in conditions when the economy is working, the borders are open and people are not afraid to meet and conduct a dialogue with each other.