Japanese marine shipper Mitsui O.S.K. Lines is breaking new ground in the Arctic Circle by teaming up with one of Russia's largest natural gas producers to export the fuel through the icy seas rather than pipeline, in a venture that promises lower costs but also risks running afoul of American sanctions on Moscow.
In September, Russia's Novatek and MOL announced plans to have icebreaking LNG tankers transport the fuel along the Eurasian Arctic coastline to floating storage units that will assist transfers of the cargo to conventional tankers. The project is expected to cost as much as 160 billion yen ($1.47 billion) with operations to start by 2023.
A joint venture will be established and the Japan Bank for International Cooperation may offer financing The Japanese company will make the final decision on the investment next year, expecting to take a stake in the project of at least 30%.
Right now, the only way to transport LNG from the Arctic is by using icebreakers, which are notorious for poor fuel efficiency and high shipping costs.
To solve the problem, MOL and Novatek will construct floating storage units that will transfer LNG from icebreakers to conventional carriers. The terminals will be located at Kamchatka, in Russia's far east, and in Murmansk, in the northwest. This will minimize the use of the high-cost icebreakers.( Collapse )