Global warming opens new sea lanes for shippers

Business Times 27 Feb 08;

(TORONTO) Norilsk, the world's biggest producer of nickel, is building its own shipping fleet to capitalise on the melting of the polar ice caps.

The company ordered five reinforced cargo vessels that can plough through the waters north of Siberia as new sea routes open. Norilsk is spending at least 320 million euros (S$669 million) to buy reinforced vessels rather than rent both freighters and icebreaker escorts.

The thawing sea 'has enormous economic implications, and commerce is going to push this ecological zone to the limit', said Rear Admiral Timothy McGee, head of the US Navy's Meteorology and Oceanography Command.

Global warming, while threatening environmental disasters, is creating economic opportunity for shippers, makers of ocean cargo vessels and tour operators. New routes may expand access to the world's second-biggest oil supply, deliver US wheat to Asia 30 per cent faster and increase Arctic tourism as much as 50 per cent in a decade.

Ice shrinkage may enable ships to sail straight over the top of the world, cutting a 17,700 km trip to 11,265 km and saving as much as 11 days and US$800,000 in fuel and labour.

Investment in reinforced vessels jumped fivefold to US$2.5 billion in 2006 from US$500 million in 1999 and may climb 10 per cent a year through 2010, London-based shipping broker Clarkson plc estimates.

Norway's Aker Yards AS and South Korea's Samsung Heavy Industries Co are producing ships for Arctic investors, including oil refiner ConocoPhillips and metals producer OAO GMK Norilsk Nickel.

'We decided we'd be better off with our own' equipment, said Victor Borodin, a spokesman for Moscow-based Norilsk.

Temperatures above the Arctic Circle have risen at about twice the rate of the global average in the past three decades, United Nations data show. Arctic sea ice shrank to the smallest area on record last summer, covering 22 per cent less than the previous low in September 2005, said the US National Snow and Ice Data Center in Boulder, Colorado.

Norilsk is shipping nickel, copper and palladium north of Siberia to Europe from the Taimyr Peninsula in northern Russia. One reinforced ship is already in service and four are being built by Aker Yards for delivery by mid-2009, all using new hull designs that allow for bow- or stern-first sailing, depending on the thickness of the ocean surface\. \-- Bloomberg