Japan, China Join Forces to Use Arctic Route for LNG Transport

Icebreakers

Chinese and Japanese shipping companies are joining forces to open up the Arctic liquefied natural gas (LNG) transportation routes. The routes reportedly can reduce the current transportation times by nearly half while shipping LNG to the Asian markets.

Japanese company Mitsui O.S.K. Lines and Chinese company Cosco Shipping have signed a partnership to diversify risk whilst sailing the icy route that comes with many unknowns. In this context, the first cargo of Russian LNG was loaded from Sabetta terminal, on the Yamal Peninsula, onto a 299-metre-long LNG tanker, Vladimir Rusanov, jointly operated by the two companies with a 50% stake each.

During winters, the ice in the Arctic makes it difficult for the Vladimir Rusanov to navigate, and so normally, it transports LNG through ice-free waters to a transhipment base in Europe. And normally, during summers, when the ice thins and the tanker can carry from Yamal via the Bering Sea directly to Asia.

The Arctic route could significantly reduce shipping time to Asia, so for the trip that could take around 35 days, travelling through the Arctic could cut to nearly 15 days. The new service is believed to be the first international shipping run to use the route, and the accessibility of the route is being attributed to the warming global climate that has caused the ice to retreat.

During winter recently, China experienced an acute natural gas shortage and the deficit is being attributed to Chinese President Xi Jinping’s ongoing drive to reduce air pollution. The drive comprises of moving from coal to natural gas, and with an ever-increasing demand for gas, China would have no choice but to import more. In this backdrop of importing more gas, Cosco is trying to develop more accessible routes for the shipping of LNG. Meanwhile, both the Japanese and Chinese companies are of the opinion that the development of the Arctic Ocean route and learning insights on sailing in the risky waters would unlock more opportunities.

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