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The Northern Sea Route – The Key to the Development of the Russian Arctic
9 April 2019
10:00—11:30
KEY CONCLUSIONS
The exploration of the Arctic and the development of the Northern Sea Route are the mechanisms of economic growth and trade

The Arctic is <...> a risk zone, but those risks are manageable; it is a zone of efficient, predictable economic affairs — Maxim Akimov, Deputy Prime Minister of the Russian Federation.

If four years ago many sceptics claimed that the Arctic costs and the NSR potential, in general, is a matter of great debate, today there is no doubt that the NSR has great prospects — Alexander Tsybulskiy, Governor of Nenets Autonomous Area .

Korea and other Asian countries are considering the NSR, as this is the shortest route that connects Asia and Europe, and it has great commercial potential — Park Heung Kyeong, Ambassador for Arctic Affairs, Ministry of Foreign Affairs of the Republic of Korea.

Our goal is 92.6 million tons, by 2024, not just 80 million tons [the NSR cargo turnover, — Ed.] — Alexey Likhachev, Chief Executive Officer, State Atomic Energy Corporation ROSATOM.

Regions of Russia actively participate in the development of the NSR

Arkhangelsk Region [in the development of the NSR, – Ed.] adopts a role of a base port <...> Arctic intelligence along with our university [Northern Arctic Federal University, – Ed.], the Arctic service; the security of the Arctic develops in traditional ports — Igor Orlov, Governor of Arkhangelsk Region.

The Leningrad Region is an active participant in this project; for us, the NSR development project is strong momentum for the development of the economy — Alexander Drozdenko, Governor of Leningrad Region.

Chukotka is the Russian pivot point in the Arctic — Roman Kopin, Governor of Chukotka Autonomous Area.

The Nenets Autonomous Region and Rosatom are signing an agreement on the organization of international transit of goods through the NSR — Dmitry Schugorev, Anchor, Russia 24 TV Channel.

ISSUES
Insufficient infrastructure for the development of the Arctic

What is happening today? Mining drifts <...> from the Yamal territories with sufficient infrastructure <...> to the north, where there is none <...>. It is a limiting factor — Dmitry Artukhov, Governor of Yamalo-Nenets Autonomous Area.

High operation costs in the Arctic

Today, a project's marginal cost does not cover implementation costs in the Far North and the Arctic due to the global market environment. We have to offer a mechanism that is to yield a return on investment higher than the risks. It is the basic principle of investment — Alexander Tsybulskiy, Governor of Nenets Autonomous Area .

Investment shortage

Attracting investors here is a paramount objective, — Andrey Chibis, Acting Governor of Murmansk Region.

SOLUTIONS
Regulatory Improvement

By 1 July, the State Duma is to receive a draft law on special measures of state support for projects implemented in the Arctic. <...> We will extend our development institutions’ effects to the Arctic areas — Alexander Kozlov, Minister for the Development of the Russian Far East and Arctic.

The most important thing is the development of our own internal national regulatory environment. The Federation Council has an Arctic Council, we work with the Government, we expect relevant legislative initiatives, and we will put them on top of our priorities — Konstantin Kosachev, Chairman of the Council of the Federation of the Russian Federation Committee on Foreign Affairs.

Development of port and transport infrastructure

We will synchronize the development of port infrastructure and the implementation of infrastructure projects — Alexander Kozlov, Minister for the Development of the Russian Far East and Arctic.

Starting 2020–2021, we expect the new Ural, Sibir and Arktika icebreakers, and in 2024 they are to provide ice escorting. We received a government decision to build two more universal icebreakers by 2030. Therefore, the year-round NSR operation calls for a fleet — Dmitry Artukhov, Governor of Yamalo-Nenets Autonomous Area.

We are up for new solutions. Currently, an investment tax deduction is on the table, something that is to develop infrastructure proactively — Dmitry Artukhov, Governor of Yamalo-Nenets Autonomous Area.

Social development of the NSR base points

The NSR is a framework that needs social development, in addition to political and economic. That is, we must devise a development for municipalities along the way — Nikolay Kharitonov, Chairman of the Committee for Regional Policy and Issues of the North and Far East, State Duma of the Federal Assembly of the Russian Federation.

New jobs, new investments should improve the quality of life, because the personnel search is the key to the implementation of all these megaprojects — Andrey Chibis, Acting Governor of Murmansk Region.

Ensuring the safety of the NSR navigation

The safety of navigation is a challenge. We cannot afford mistakes in the Arctic and must keep the state navigation security systems up to traffic and intensity pace — Sergey Frank, President, PAO Sovcomflot.

Ensuring transportation competitiveness

We must offer a competitive price of transportation to have a fair market share — Leonid Mikhelson, Chairman of the Management Board, Member of the Board of Directors, NOVATEK.

There is a counter route: vessels from the Asian market should not return empty — Igor Orlov, Governor of Arkhangelsk Region.

Transition to environmentally friendly fuels in the Arctic

We need to use LNG as the main fuel of choice — Sergey Frank, President, PAO Sovcomflot.

The material was prepared by the Russian news agency TASS