Himaya Quasem Straits Times 5 Aug 11;
SINGAPORE faces mixed fortunes if the shipping route cutting through the Arctic becomes commercially viable, experts say.
Companies building ships, developing ports and those involved in green technology could benefit from new business opportunities as Russia looks to develop the frosty region.
But the Republic could also lose out on trade from vessels heading from Europe to north-east Asia, as they skip Singapore and head straight to northern China, Japan and South Korea via the Bering Strait - a shorter route than the Suez Canal and Malacca Strait.
Still, experts remain optimistic that Singapore would not be hit too hard either way.
Goods and raw materials originating in South-east Asia would still need to be picked up from Singapore before being shipped to Europe, said Mr Wong Siew Chuang, a senior consultant at independent maritime adviser Drewry.
'It will have an impact on Singapore, but not too big,' he said.
Others note that the Arctic route, known as the Northern Sea Route, is passable only in the summer months, when the ice is sufficiently melted. And even then, the threat of ice remains.
Russia currently charges ships about US$200,000 (S$242,000) for one of its nine atomic-powered ice-breakers to accompany them in case of ice.
'Whether or not the route becomes commercially viable will depend a lot on whether Russia reduces this fee,' noted maritime analyst Joshua Ho at the S. Rajaratnam School of International Studies (RSIS) at Nanyang Technological University.
The opening of the Arctic route could also bring more business opportunities for ship and oil-rig builders, as Russia's arctic shelf is believed to contain the equivalent of more than 100 billion tonnes of oil.
Russia has released plans to build 40 ice-resistant oil platforms, 14 offshore gas terminals, 55 ice-resistant tankers and storage tankers, and 20 gas carriers in the future.
Singapore-based Keppel Offshore & Marine has already grabbed a slice of the action, securing a $260 million deal to build two ice-breaker vessels for Russian oil company Lukoil in July 2006.
It also signed an agreement with Lukoil to cooperate on building new platforms and delivered a string of other specialised ships, including tugboats, supply vessels and rescue vessels designed for use in freezing temperatures.
RSIS' Mr Ho said business opportunities could also crop up for port operator PSA International, as ports may need to be developed on the periphery of the Arctic.
The Arctic Council will also want to ensure the fragile ecosystem in the region is preserved, he added, and Singapore's green technology sector could help develop greener ships that have low carbon emissions and are more energy-efficient.
Ice melt opens Arctic trade routes
With ice cover shrinking, it is easy to navigate the shorter, otherwise perilous, routes
Straits Times 5 Aug 11;
MOSCOW: Arctic ice cover receded to near-record lows this summer, opening elusive northern trade routes from Asia to the West, Russia's climate research agency has said.
After the third-hottest year on record since 1936 in the Arctic last year, ice cover has melted as much as 56 per cent more than average across northern shipping routes, making navigation in the perilous waters 'very easy', it said on Wednesday.
'Since the beginning of August, icebreaker-free sailing is open on almost all the routes,' the climate monitoring agency said on its www.meteoinfo.ru website.
It added that the mild conditions would last through next month on shipping lanes that are tens of thousands of kilometres shorter than southern alternatives.
Melting ice is making it easier for Russian and other European shippers to service Asia via the northern sea route, which is about one-third shorter than the Rotterdam-Yokohama voyage through the Suez Canal, saving time and fuel.
Iceland's President Olafur Ragnar Grimsson said last year that the pace of global warming in the Arctic was three times faster than elsewhere, cutting journeys between Asia, Europe and America by as much as half.
The United States National Snow and Data Centre said on its website on July 18: 'Melting occurred at a rapid pace through the first half of July and is now tracking below the year 2007, which saw the record minimum.'
Arctic sea ice typically covers 14 million to 15 million sq km at the height of winter, and retreats, on average, to about 7 million square km by the end of the melt season in mid-September.
With about six weeks of melting still to go this year, the current area of ice cover is about 6.8 million square km, according to a report in The Vancouver Sun on Wednesday.
In 2007, the area of ice extent decreased to less than 4.5 million square km by mid-September, raising widespread concerns and prompting the Canadian government to declare the massive thaw the biggest weather story of the year.
Last September, after Arctic sea ice retreated to an area of just 5 million square km, scientists noted that the four greatest melts since satellite measurements began in the late 1970s had occurred in the four summers between 2007 and last year.
With retreating ice opening new strategic trade routes, Russia hopes to make the Arctic passage a competitor to the Suez Canal, profiting from taxes and the lease of its unique nuclear icebreaker fleet to escort cargo ships along its Siberian coast.
Despite higher costs, Russian state shipping giant Sovcomflot sent more cargoes of gas condensate on the Northern Sea Route this year, an ambitious move that highlights the Kremlin's drive to mark its stake in the energy-rich region.
Russia's largest nitrogen fertiliser producer, Eurocem, sent its first shipment of 44,000 tonnes of iron-ore concentrate to China using the route last month, and envisages running monthly trips, logistics director Igor Nechaev said.
Russian Prime Minister Vladimir Putin has vowed to transform the Soviet-era Arctic route, first plied in 1932 between Arkhangelsk and the Bering Strait, into a year-round passage, and commodity producers have already started sending test shipments.
The northern way dates to 1932, when the Soviet Union sent the first vessel from Arkhangelsk to the Bering Strait. The route is currently used, with the help of icebreakers, from July to November.
If the current pace of ice melt continues, the Arctic Ocean could become entirely ice-free during the summer months by 2050, Russia's top forecaster Alexander Frolov predicted last year.
The route may also appeal to carriers seeking to avoid pirates in the seas around East Africa and trouble triggered by Arab spring revolutions in the area around the Egyptian waterway.
But mariners admit that many obstacles, such as ice floes and shallow waters, remain before the northern Russian shipping lane can take business from existing southern thoroughfares - not least a summer that lasts just a few weeks.
REUTERS, BLOOMBERG