Enhancing Industrial Development in the Russian Arctic: The Northern Latitudinal Passage

Arctic railway link to the port of Murmansk, February 2022. Photo: Ebru Caymaz

Infrastructure is a critical way for humans to engage with the natural environment in the Arctic region, as it facilitates access, connection, inhabitation, and productivity. The Arctic Institute’s 2022 series on Infrastructure in the Arctic investigates infrastructure as a critical point of analysis for considering human impacts and needs in the Arctic, especially in its role as a mediator, or as an interface, between politics, government, people and the natural environment.​

The Arctic Institute Infrastructure Series 2022

• Infrastructure in the Arctic: The Arctic Institute Infrastructure Series
• Underneath the Ice: Undersea Cables, the Arctic Circle, and International Security
• Enhancing Industrial Development in the Russian Arctic: The Northern Latitudinal Passage
• Without Icebreakers, Arctic Infrastructure Won’t Matter
• ‘Supported by every traveler in Norway’: Den Norske Turistforening, tourist infrastructure and transnational travel
• Iqaluit’s water crisis highlights deeper issues with Arctic infrastructure
• Arctic Towns in Transition: Norway’s commitment towards a new energy solution on Svalbard
• Arctic Military Infrastructure: The Olavsvern case
• Space Infrastructure for a Sustainable Arctic: Opportunities and Challenges of Spaceport Development in the High North
• Geopolitics of Subsea Cables in the Arctic
• Past, Present, and Future Themes of Arctic Infrastructure and Settlements
• The Arctic Institute’s Infrastructure in the Arctic Series: Conclusion

The recent Russian Arctic megaproject, the Northern Latitudinal Passage (NLP), holds great potential in terms of boosting cargo flows and enhancing connectivity in the regional infrastructure. The megaproject includes the construction of railways connecting the region’s industrial settlements to the Arctic Ocean and is expected to become a key driver for logistical development in the Far North. Considering the planned routes and the length of the passage, the NLP presents significant potential to affect the industrial and economic development of the Yamal peninsula. Besides, developing the north-south axial Northern Corridor and linking the corridor to the NLP would further promote industrial development in the Far North and become a major economic vector for Central Asian economies.

It is estimated that at least 9 million tons of goods will be transported via these railways.¹⁾Trutnev, Y (2021) Yuri Trutnev Held a Meeting of the State Commission for the Development of the Arctic, https://minvr.gov.ru/press-center/news/yuriy-trutnev-provyel-zasedanie-gosudarstvennoy-komissii-po-voprosam-razvitiya-arktiki-32076/. Accessed on 22 February 2022 More importantly, the NLP is envisioned to become a new export route which will solve the issue of transporting products from the Yamal Peninsula to the Northern Sea Route (NSR). Therefore, a comprehensive study of the parameters of development and logistical support of the mineral resource base of the Yamal Peninsula, including the development of an optimal scheme for the transportation of liquid hydrocarbons, is currently being carried out. After the completion of the development of a comprehensive program, the Ministry of Transport of Russia will clarify the configuration of the infrastructure of the Obskaya-Bovanenkovo-Sabetta railway corridor in terms of the need to develop additional port facilities in Yamal and present the final parameters of the project.²⁾Trutnev, Y (2021) Yuri Trutnev Held a Meeting of the State Commission for the Development of the Arctic, https://minvr.gov.ru/press-center/news/yuriy-trutnev-provyel-zasedanie-gosudarstvennoy-komissii-po-voprosam-razvitiya-arktiki-32076/. Accessed on 22 February 2022 Concordantly, this study aims to outline the NLP and to discuss the feasibility of its projected outcomes.

Industrial Development in the Russian Arctic

In recent years, Russia has been investing large amounts to enhance its Arctic territory. In addition to its Ministry of Arctic Development, Russia’s increasing attention to the region becomes visible in concrete actions such as opening up oil and gas pipelines, building icebreakers as well as various infrastructure, and developing tourism.³⁾Jordan, J. (2021). Russia’s Coercive Diplomacy in the Arctic, The Arctic Institute, https://www.thearcticinstitute.org/russia-coercive-diplomacy-arctic/. Accessed on 23 February 2022 In addition to China, Russia also cooperates with various countries such as Italy and Turkey (i.e. Arctic LNG-2 Project). Surprisingly, Turkish shipbuilders have growing interest in the Northern Sea Route; Turkey-based Sefine Shipyard became the only bidder for Russian icebreaker tender while Kuzey Star Shipyard won the bid to build a dock for nuclear icebreakers.⁴⁾Bronder, P. L. (2021). Turkish Yard Wins Bid to Build Nuclear Icebreaker Dock, June 13, https://thebarentsobserver.com/en/industry-and-energy/2021/06/turkish-yard-wins-bid-build-nuclear-icebreaker-dock. Accessed on 23 February 2022; Daily Sabah (2021). Turkish Shipbuilder Wins Russian Icebreaker Tender, July 27, https://www.dailysabah.com/business/transportation/turkish-shipbuilder-wins-russian-icebreaker-tender. Accessed on 23 February, 2022 Their ability to propose lower offers make Turkish shipyards salient alternatives for the future large-scale projects.

Apart from sea routes, Russia has successfully developed its railway networks within the Northern territories that the density of railways is higher in the Russian North compared to other regions. Owing to the Northern-Siberian Main Line, hydrocarbon resources from the western Siberia can be transported and used especially in the petrochemical industry. Besides, construction at the Obskaya station has the potential to attract 23 million tons of cargo, with the largest volume expected to be oil cargo. It is further projected that about 220 million tons of cargo will arrive at the ports of Murmansk, Arkhangelsk, St. Petersburg, Vyborg, Kandalaksha, Ust-Luga, Primorsk, and Vysotsk by 2025.⁵⁾Pokrovskaya O D, Fedorenko R V & Kamaletdinov (2021) Northern Latitudinal Railway Project: Priorities and Drivers. In: Ashmarina S.I., Horák J., Vrbka J., Šuleř P. (eds) Economic Systems in the New Era: Stable Systems in an Unstable World. IES 2020. Lecture Notes in Networks and Systems, Vol 160. Springer, Cham

Can the Northern Latitudinal Passage Become A Conduit of Enhancing Industrial Development in the Russian Arctic?

Although constructing a railway to enable access to the Arctic Ocean and accelerating the industrial development of the Russian Arctic has been previously discussed, the idea becomes more possible with the approval of the Russian government’s Transport Strategy until 2030 in 2008. Since NLP is a part of the Arctic Transportation Corridor, the main driver behind its construction is to expand the usage of the NSR and boost its potential. Besides, creation of the rail transport corridor seems the most rational option to solve the connectivity problems between the east and the west of Russia while transforming the Trans-Siberian railway into both a container-shipping and high-speed passenger line. Hence, it may become a basis for a new economic development zone in which continuous habitation would become possible.

There have been several discussions revolving around the potential of the NSR since its official opening to international shipping in January 1991. While drastic reductions in sea ice coverage in 2007 have renewed international interest in the region, the number of international transits remains below Russia’s expectations due to unpredictability in sea ice coverage and insufficient infrastructure along the route.⁶⁾Gosnell R (2018) Caution in the High North: Geopolitical and Economic Challenges of the Arctic Maritime Environment. War on the Rocks, June 25, https://warontherocks.com/2018/06/caution-in-the-high-north-geopolitical-and-economic-challenges-of-the-arctic-maritime-environment/. Accessed on 15 January 2022 Despite Atomflot’s heavy promotion, cargo owners and shipping companies remain cautious. Albeit the number of international transits increased between 2016 and 2019, this was not reflected in cargo volume.⁷⁾Gunnarsson B & Moe A (2021) Ten Years of International Shipping on the Northern Sea Route: Trends and Challenges. Arctic Review on Law and Politics, Vol.12:4-30 It is no surprise that investing in the NSR and boosting its potential is hugely expensive and time consuming. However, it is expected that the route may become usable in a few decades⁸⁾Gricius G (2021) Geopolitical Implications of New Arctic Shipping Lanes. The Arctic Institute, https://www.thearcticinstitute.org/geopolitical-implications-arctic-shipping-lanes/. Accessed on 16 January 2022 and investing in extraction of natural resources.

On the other hand, Russia’s ambitious plans to turn the NSR into an attractive international shipping route have necessitated major infrastructure investments including building icebreakers for ice-navigation, developing communication systems and better navigational structure and modernizing ports. Therefore, to develop the hinterland and improve accessibility, Russia announced a project for the construction of the Obskaya-Vobanenkovo-Sabetta railway corridor that would connect industrial settlements of the region to the Arctic Ocean via the Kara Sea. The projected NLP consists of two parts: an east-west connection extending to the Ob which would connect the two of key Arctic railway lines between Tyumen and Nadym as well as the Northern Line from Arkhangelsk. Previously, Nadym was connected to the mainland solely by a ferry line. In 2015, a part of the railway passage was constructed across the Nadym River.⁹⁾Arctic Today (2017) Russia’s Yamal to Invest $144 million in Construction of Northern Latitudinal Railway. Russian News Agency, April 7, https://tass.com/economy/940180. Accessed on 23 February 2022

The other part extends 170 kilometers through Bovanenkovo (using Gasprom’s current railway) to Sabetta.¹⁰⁾Staalesen A (2021) Moscow’s Big Plan for Trans-Arctic Shipping: 2,000 Percent Growth in 10 Years. The Barents Observer, July 23, https://thebarentsobserver.com/en/arctic/2021/07/moscows-big-plan-trans-arctic-shipping-2000-percent-growth-10-years. Accessed on 2 January 2022 Accordingly, in addition to being a joint venture port between the Russian Government and NOVATEK and hosting the Yamal liquefied natural gas (LNG) plant, Sabetta is planned to be transformed into “a universal port for all kinds of goods”.¹¹⁾Staalesen A (2015) Russia’s New Arctic Super-Port Must Get a Railway Connection, President Putin Underlines. The Barents Observer, December 22, https://thebarentsobserver.com/en/industry/2015/12/railway-sabetta. Accessed on 16 January 2022 In order to attain that target, a railway junction which is linked with the Polar Road (especially Nadym-Salekhard section) and extends through Ob. Therefore, one of the main routes extends 170 kilometers through Bovanenkovo to Sabetta, while the other route follows an east-west connection to the Ob. Consequently, the projected railway would link two of key Arctic railway lines in Russia; the line between Tyumen and Nadym and the Northern Line from Arkhangelsk.

If the construction of the NLP can be completed, it will enable the delivery of goods from the Yamal Peninsula across the ports in the North-Western Basin within a relatively short time. Therefore, the megaproject includes several powerful stakeholders such as Gazprom, Russian Railways, the Yamalo-Nenets, NOVATEK, the Republic of Komi, and the Ural Autonomous Districts. The project holds the potential to assist large industrial enterprises with additional opportunities to enter global markets while reducing logistical costs for small companies and unloading the most congested sections along Trans-Siberian.¹²⁾Transport Strategy of the Russian Federation for the period until 2030 (Approved by the Decree of the Government of the Russian Federation of November 22, 2008) N 1734 (2008) https://www.mintrans.gov.ru/documents/3/1009. Accessed 10 January 2022

In line with the insights given above, on 27th October 2021, Putin summoned top industry representatives to further discuss the development of the resource potential of the Yamal Peninsula as international natural gas prices hit records. During that meeting, he pointed out that large-scale projects are being successfully implemented within the region and as the largest field, Bovanenkovskoye is being developed. Besides, he highlighted the importance of the NLP and asked for investment in infrastructure which also highlighted his determination on the construction of the passage.¹³⁾Kremlin (2021). Meeting on the Development of the Resource Potential of the Yamal Peninsula, October 27, http://www.kremlin.ru/events/president/news/page/68. Accessed on 23 February 2022 However, the meeting on Yamal is also criticized by foreign leaders and Russia was accused of “using natural gas as leverage for political gains” while the EU Commision declared that industrial development in the Arctic should be halted.¹⁴⁾Staalesen, A. (2021). Putin: Russian Arctic Gas Can Provide Long-Term Energy Security for Europe and Asia, October 28, https://thebarentsobserver.com/en/arctic-lng/2021/10/putin-russian-arctic-gas-can-provide-long-term-energy-security-europe-and-asia

Conclusion

Enhancing industrial development in the Russian Arctic simultaneously fulfills three main objectives: geopolitical, economic, and social. Developing a functional latitudinal path with the inclusion of powerful stakeholders such as NOVATEK, Russian Railways, and Gazprom will decrease Russia’s dependency on foreign investment while combining freight traffic with the sea routes and developing the NSR infrastructure accordingly. Based on the recent developments regarding Ukraine, it is highly unlikely to draw sufficient foreign investment to the region. On the other hand, Russia presents strong determination to continue its megaprojects since there are several economic benefits, ranging from natural resources to initiating intersectoral competition for cargo transport which may also reduce rates. In terms of social objectives, these railways will connect habited areas in addition to creating new jobs.

In addition to its national stakeholders, if Russia manages to lower the tension pertaining to Ukraine, it will be possible to see new project partnerships such as Turkey to develop its Arctic infrastructure at lower rates. To sum up, as long as the planned railways connect rail, river, air, and road transport, the NLP can provide a strategic basis for an economic development zone in the Russian Arctic and enable continuous habitation with interconnected individual regions.

Ebru Caymaz is an assistant professor from Canakkale Onsekiz Mart University, Turkey. Her first PhD is in the field of Business Administration and she has mainly concentrated on sustainable development. In order to conduct further studies uniting the security issues with the sustainable development in the Arctic, she has currently been attending her 2nd PhD lectures in the field of International Relations.