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Russia’s Rosneft has inaugurated a new, nuclear-powered icebreaker to be used at its Vostok Oil project in eastern Siberia.
The 173-meter Ural recently completed its tests, the Barents Observer reports, and will soon head to Murmansk and the nuclear icebreaker base there. It will be used exclusively by Rosneft, according to a Rosatom executive.
There is a deficit of icebreakers for the Northern Sea Route, the same executive, Vladimir Arutiunian, told Russian media last month. He added that this year will see the launch of one new icebreaker—the Ural—with two more scheduled to be ready in 2024 and in 2026.
Vostok Oil, a mega-project in the Taymyr province in Russia’s Far North, comprises several groups of oil fields holding an estimated 44 billion barrels of oil. Initial work on the project began in January 2021. The resources are located close to the Northern Sea Route, which climate change has made navigable for a longer period every year.
The total cost of the Vostok Oil development has been estimated at $170 billion over the lifetime of the fields. The main market for the oil extracted from the fields there will be shipped to Asia, hence the focus on developing the Northern Sea Route.
Rosneft still has to line up the finance for the mega-project after Western partners pulled out after the invasion of Ukraine. Previously, commodity major Trafigura had bought a 10-percent stake in the project, and there were reports that Rosneft was in talks with Vitol, Gunvor, and Glencore, too.
Investors from India and China are now the alternative after talks with them stalled following the oil price collapse in 2020. Originally, first oil was scheduled to flow from Vostok in 2024, but Western sanctions will likely delay that as they feature bans on the export of oil technology and equipment to Russia.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.
The oil resources are located close to the Northern Sea Route (NSR), which climate change has made navigable for a longer period every year.
China has already received its second Russian crude oil shipment via NSR dubbed ‘Arctic Silk Road’. The first was in 2019.
The importance of this route for China is that first it addresses its energy security by bypassing both the geopolitically risky Hormuz Strait and the Strait of Malacca through which 80% of Chinese crude imports pass daily and second it cuts the journey time to china by half versus one from Russia's Baltic ports through the Suez Canal. This will revolutionize energy trade flows from Russia to Asia.
Russian Minister of National Resources and Environment Dmitry Kobylkin was quoted saying that Russian oil shipments via the (NSR) would top 80 million tons or 1.61 million barrels a day (mbd) by 2024.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert