The export of Russian hydrocarbons along the Northern Sea Route in the eastern direction in the 2023 navigation period amounted to about 3.84 million tons. While LNG supplies along the eastern sector of the NSR remained at last year’s level, the main increase in cargo traffic occurred due to a multiple increase in oil transportation to China. Russian oil companies sent 1.5 million tons of oil, or 14 tankers, along the Northern Sea Route, while last year there was only one. NOVATEK completed the last voyage of an LNG tanker along the Northern Sea Route this season on November 30, having sent a total of 31 cargo along the route, or 2.27 million tons of LNG.
On December 1, NOVATEK unloaded the last batch of liquefied gas this year at the Chinese port of Caofeidian for shipment along the Northern Sea Route. It was delivered by the Arc 7 tanker Georgy Brusilov, which is now returning back to Sabetta in ballast. According to Kpler statistics, new tankers no longer leave Sabetta in the eastern direction, therefore, navigation along the Northern Sea Route for NOVATEK is completed this season.
According to Kpler data, in total in 2023, NOVATEK shipped 31 LNG cargoes, or 2.27 million tons, to Asia from the Yamal LNG project. Of these, eight shipments were spot shipments, the rest were under long-term contracts. NOVATEK did not comment on these data. In August, Gazprom sent another spot shipment of LNG for 70 thousand tons from the Port LNG project to the Chinese Beijing Gas Group.
NOVATEK’s shipments in 2023 correspond to the level of last year; then the company sent 32 shipments, or 2.26 million tons, along the eastern sector of the Northern Sea Route. The shipments fall far short of the 2021 record, when NOVATEK delivered 44 LNG shipments, or about 3.29 million tons, to Asia-Pacific countries. Instead of supplies to the Asia-Pacific region, in the last two years NOVATEK increased supplies to Europe, where prices were much higher than in Asia and the transport distance was shorter.
The stagnation of gas transportation along the NSR reflects a general change in the balance of supplies between Europe and Asia, says Victor Katona from Kpler. According to him, if all post-Covid years had a tilt towards Asia (55% of global LNG supplies in 2022), this year the situation has changed, as Europe has again become the continent that imports the majority of LNG in the world.
According to the head of the Gekon consulting center, Mikhail Grigoriev, the average duration of a round trip from Yamal LNG to the ports of China was 42 days (from 36 to 58 days). The growth of transportation in 2024 to the Asian market will be associated with the commissioning of the first stage of Arctic LNG-2, but will largely be determined by the ratio of LNG prices in the European and Asian markets, he adds.
The main trend of the current summer-autumn navigation has been an increase in Russian oil supplies along the Northern Sea Route. In four months, Russian oil companies supplied 1.5 million tons of oil, or 14 shipments versus only one shipment a year earlier.
The logistics route through the NSR to China is about ten days shorter in one direction than through Suez, notes Victor Katona. With the increased use of Russian and gray tankers, the importance of sailing time increases, especially during periods of high export rates, he believes. “Thus, the use of the NSR will only grow, preparing Russian oil and gas for the launch of the Vostok Oil project,” says Mr. Katona.
The navigation pause in the eastern sector of the Northern Sea Route traditionally lasts from mid-December, when intensive ice formation begins here, until May. Accordingly, the navigation window for Russian companies is quite narrow. NOVATEK, in an attempt to expand it in 2021, damaged one of the three azipods (propulsion systems) on the Nikolai Evgenov tanker, after which the ship had to be docked for repairs. The Russian authorities say that year-round navigation along the Northern Sea Route will be available in 2024, however, according to Kommersant, there are delays in the construction of the nuclear icebreakers necessary for this (see Kommersant on October 23).