October 23, 2013

Source: RT News

South Korea has made its first commercial freight voyage by the Northern Sea Route, an icy passage it says has a big financial future. It reduces the time between St. Petersburg and Korea by 10 days, and provides a ‘safer’ alternative to the Suez Canal.

The Swedish icebreaker Stena Polaris docked at the Gwangyang terminal, 200 miles (350 km) south of Seoul after a 35-day journey that started from Port Ust Luga just south of St. Petersburg and close to the border of the Russian Federation and the European Union.

The successful inaugural cargo trip was complete late on Monday, the Korean Ministry of Oceans and Fisheries said on Tuesday. On board the vessel was 44,000 tons of naphtha, a flammable liquid hydrocarbon.

Graphic by RTGraphic by RT

The government plans to develop ports along the Russian coast and add more shipping routes in the Arctic Ocean, according to the fisheries ministry, which held a ceremony at the Gwangyang port Tuesday.

“As such, the Northern Sea Route has the strong potential to grow into a huge cargo transport market,” the ministry said in a statement.

However, the cost is dependent on the weather, as bad weather delayed the Stena Polaris for five days. South Korea also had to rent the Swedish icebreaker, as they have no cargo ships of their own that can perform the ice breaking techniques necessary.

Korea sees a prosperous future in establishing a shipping lane through the Arctic, as over time it could cheapen trade with Russia and Europe. The net trade balance between South Korea and the EU in 2012 was 77.82 million euros, according to EU bilateral trade data published July 5, 2013. Korea is the EU’s 10th biggest trading partner and accounts for 2.2 percent of EU trade.

Russia’s trade balance with South Korea was $218 million in the same period, and is South Korea’s 11th largest trade partner, accounting for 2.1 percent of trade, according to the website of Russia’s Foreign Trade Statistics Office.

The journey through Russian waters is gaining appeal with Asian export countries, which sees the icy alternative as favorable to the traditional trade route, which is seen as a risk due to unrest in Middle Eastern countries as well as piracy off the Somali coast.

On paper, the numbers add up: South Korea can decrease the voyage distance by 7,000 kilometers, and can hedge against the dangers that complicate security via the Suez Canal.

Icy waters

Unlike the Suez Canal and Indian Ocean option, transit across the Arctic is limited to the summer when it is open for only 4 months.

Previously the route was covered in ice but now much of it has melted. It may be ice free in less than 5 years, and ships may not need ice breaking equipment by 2050, according to White House estimates.

The Koreans are the second to pilot a container ship through the polar shipping lane, China completed their test-run on September 11, 2013.

Korean officials have expressed interest in developing a commercial trade presence in the Arctic, which would strengthen cooperation with Russia and Scandinavian countries.

South Korea, along with China, India, Japan, Singapore, and Italy were awarded permanent observer status on the Arctic Council. (link)

Environmental activists have voiced concerns over developing routes through the Arctic, as much of the freight would be oil and other flammable material.

In September, 30 Greenpeace activists staged a protest at a Gazprom oil rig off Russia’s Arctic coast, and have since been charged with piracy.

In May, 20 Greenpeace activists boarded an icebreaker in Helsinki harbor, locking themselves to the ship in protest at oil and gas exploration in the Arctic.