The Role of the Russian Arctic Gas Industry in the Northern Sea Route Development

Abstract

The Russian region of the Arctic has been described in terms of unique hydrocarbon potential, as well as strong concentration of major natural gas fields. The article presents reserves of natural gas, oil and condensate in the main oil and gas provinces of the Russian Arctic. It is indicated that the development of Russia’s economic activity in the Arctic depends largely on the increased transport and infrastructure capacity of the region. The activities of the largest Russian extractive industries such as PAO Gazprom, PAO Rosneft Oil Company, PAO NOVATEK for the production of natural gas in the Arctic zone have been described. The implementation of the integrated investment project “Yamal-LNG”, which provides for the production of natural gas at the Yuzhno-Tambeyskoye field, its liquefaction, and supply to consumers has been singled out as one of the most significant areas for developing the resource base of the Arctic zone. The article touches on the production capacities of a liquefied natural gas (LNG) plant, as well as the logistic structures for delivering LNG to consumers. It is also indicated that transportation of liquefied natural gas along the Northern Sea Route has a variety of significant advantages. Review of the activities carried out by Russian companies in the development of the Arctic gas fields has revealed the relationship between the processes of implementing gas projects in the region and the rate of development of the Northern Sea Route (NSR). The dynamics of cargo transportation by the NSR has been analyzed and also external and internal factors that determine the effectiveness of the functioning of the NSR transport system have been highlighted. Current state of the icebreaking fleet has been appraised as one of the most important drivers in cargo transportation along the NSR. Availability of liquefied natural gas as marine fuel has been discussed as one of the advantages of the NSR, which will allow observing stringent environmental standards of shipping in the Arctic and reducing freight costs. Conclusions have been drawn on the high importance of gas production projects to be implemented in the Russian region of the Arctic for the development of shipping along the Northern Sea Route.