[110519.EN.BIZ] Russia to Team Up With China to Develop an Arctic Shipping Route

RUSSIA intends to collaborate with China to develop an Arctic shipping route as Moscow builds new ports to boost shipments along the Northern Sea Route.

Russian ambassador Andrey Denisov told Hong Kong's South China Morning Post that discussions over the supply of Russian gas to China through a route known as Power of Siberia Two were at an advanced stage.

"Almost everything has been completed so far but there is only one gap, which is the price," said Mr Denisov.

"China as a buyer needs gas and a reliable long-term source. Russia is definitely that kind of source," he said.

Work on Power of Siberia One, also known as the "Eastern Route," is due to be completed on December 10 and is expected to transfer 38 billion cubic meters of gas to China annually.

Any deal concerning Power of Siberia Two, or the "Western Route," could further bolster the energy alliance between China and Russia.

Moscow, which controls 50 per cent of the total Arctic coastline, has been intensifying efforts to develop the region.

"The route is effective in terms of distance, but we need to equip all the shoreline with special devices which can indicate how strong the ice is and other natural conditions," Mr Denisov said.

"We need icebreakers. Russia possesses quite a number and China has experience in building icebreakers and passing through the route too."

Eight of the 27 vessels that travelled along the route last year were from the state-owned China Ocean Shipping Company. Last July the Russian natural gas producer Novatek began to deliver liquefied natural gas (LNG) cargo to China.

Source : HKSG / Map : The Economist.