A Maltese-flagged cargo ship caught fire yesterday while stuck in heavy ice in the Azov Sea.  The vessel, the M/V Captain Ivan Vikulov, sent a distress signal to maritime authorities in the Ukraine Sunday morning requesting assistance.

The icebreaker, Kapitan Moshkin, along with a helicopter were dispatched to the scene to rescue 14 Russian crew members on board. 10 crew members were evacuated by helicopter as 4 remained onboard to fight the fire. The four were later forced to retreat to the icebreaker as the fire engulfed the vessel.

The news agency Interfax has reported that the fire has been extinguished and that the vessel is currently at anchor some 50 km off the coast near the village of Strilkove. Interfax also reported that the Captain Ivan Vikulov was heading from Algeria to Rostov-on-Don but has been blocked by ice since January 28.

The Ice-classed LNG carrier, Ribera del Duero Knutsen, owned by Knutsen OAS Shipping

*Editor’s Note: Changed title to include Northeast Passage, not Northwest Passage as was originally reported.

OSLO (Dow Jones)–Russia has for the first time authorized a Liquefied Natural Gas tanker to sail through its Arctic waters from Europe to high-demand Asian markets, a route that requires about half the usual sailing time, potentially reduces costs and avoids the threat from Somali pirates.

Russia authorized the tanker Ribera del Duera Knutsen to sail along the Northern sea route from the Atlantic ocean to the Pacific ocean, Norwegian shipping company Knutsen OAS Shipping said.

In September, Russian Prime Minister Vladimir Putin said that he sees the future of the Northeast Passage “as that of an international transport artery” able to compete with other maritime routes on both fees, safety and quality.

From Europe, the route is a much shorter way to the Far East than sailing across the Mediterranean Sea and through the Suez Canal, which requires ships to sail through the ‘pirate alley’ in the Gulf of Aden north of Somalia.

It would save a lot of time and money, Knutsen’s Chartering Manager John Einar Dalsvag said, as current LNG rates are at a very high level of about $150,000 a day, so “days are expensive.”

Using the shorter Northern route means sailing in icy Arctic waters from the Barents Sea along Siberia to the Bering Strait, then on to Japan or other countries in the Far East.

Japan’s demand for LNG has climbed sharply after an earthquake and a tsunami knocked out several nuclear power plants in 2011. In December, only seven out of Japan’s 54 nuclear power plants were in operation because of safety concerns. Electricity production has largely been replaced by thermal power plants.

The LNG tanker’s journey along the Northern sea route to Japan would take about 20 days, according to Knutsen OAS Shipping, based in Haugesund, Norway. Due to the icy conditions, the ship must sail the route at some time between June and October, according to the company.

However, the company said the authorization only means the journey is technically possible, as it hasn’t yet signed any contract to deliver LNG by this route.

The Ribera del Duera Knutsen is the only LNG tanker with ICE-1A class notation from classification society Det Norske Veritas, which means it can handle ice thickness of up to 0.8 meters, according to the company.

Knutsen OAS Shipping has “studied all risks”, says Dalsvag, adding that such a journey would require two Russian icebreakers to accompany the ship.

The company said it hasn’t yet calculated what this would cost, or how much time and fuel this route would save them compared to the longer trip through the Suez Canal.

-By Kjetil Malkenes Hovland, Dow Jones Newswires

The incident occured on July 10, 2011 when the riverboat, overloaded with more than 200 passengers, sank during a storm killing 122 people.  An investigation into the incident found that the ship sank after water flowed into 38 portholes that were left open.  The report also found that the vessel was heavily overloaded, a poorly trained crew and failing to inform navigation traffic controllers of the cruise were to blame.

Tuchin is the fifth person to be charged in connection to the incident.  Others included the general director of the company that rented the cruise boat, the river fleet inspector who certified that the Bulgaria was fit to sail, and two senior transport inspectors that allowed the  company to carry passengers despite the vessel lacking the appropriate license.

Yury Tuchin, who was captain of the Arbat cargo ship, pleaded guilty to not stopping to collect survivors, but said he had only done so because his ship risked crushing the lifeboats, according to the report.

The case is reminiscent of the classic Seinfeld finale, where the Seinfeld clan was sentenced to a year in prison for violating the “Good Samaritan Law” when they failed to help a man being mugged.

The Russian Navy or VMF is the naval arm of the Russian Military and above is a private video developed as part of a recruitment campaign to boost the number of sailors needed to for a 2015 rearmament program that, according to wikipedia, puts, for the first time in Soviet and Russian history, the development of the navy on an equal footing with strategic nuclear forces.

The program covering the period until 2015 is expected to replace 45% of the military inventory in the army and navy. Out of 4.9 trillion rubles ($192.16 billion) allocated for military rearmament, 25% will go into building new ships. “We are already building practically as many ships as we did in Soviet times,” First Deputy Prime Minister Sergey Ivanov said during a visit to Severodvinsk in July 2007, “The problem now is not lack of money, but how to optimize production so that the navy can get new ships three, not five, years after laying them down.” According to the list of ships in the Russian Navy today the tonnage of the active navy is approximately 1,300,000, the ships in reserve have a tonnage of more than 300,000, this makes the Russian Navy by far the second largest in the world with a combined tonnage of 1,600,000.

This news comes one year after Russia supported the successful voyage of a gas tanker from its northwestern port of Murmansk to China.

“We see the future of the Northeast passage as that of an international transport artery capable of competing with traditional maritime routes when it comes to service fees, safety and quality,” Putin told an international Arctic forum. He also mentioned that Russian experts believe the increased volume of traffic through the Northeast passage this year will reach a milestone with an estimated 700,000 tons of cargo delivered this year alone. ”I do not doubt that this is just the beginning,”

“Our plans include modernizing river, automobile, rail, communications, airfields and airports as well as the renovation of Polar aviation,” Putin said. In addition to state facilities he plans to encourage trade with new subsidy programs stating, “The states and private companies which choose Arctic shipping will no doubt receive hefty economic advantages and dividends,”.

Russia’s plans are just part of Russia’s strategy to stake the energy-rich Arctic that is beginning to open up as polar ice recedes.

“It is transport, with the creation of new sea and air corridors, that is capable of becoming a breakthrough project of uniting Arctic states,” Putin concluded.

The deal, signed in the presence of Prime Minister Vladimir Putin at his vacation residence on the Black Sea, is a big win for Exxon as it competes with other international oil companies for increasingly scarce new fields.

The pact also is a success for Kremlin oil czar Igor Sechin, who has sought to woo back big foreign oil companies whose technologies are vital to developing the next generation of Russian oil fields. The alliance with Exxon, the largest U.S. oil company, will give Rosneft international exposure that it has long sought to bring it closer to the top league of global oil companies.

“This large-scale partnership represents a significant strategic step by both companies,” Exxon Chief Executive Rex Tillerson said in a written statement.

“It’s very nice that Rosneft has such a reliable, good strategic partner,” Mr. Putin told the executives at the signing, specifically hailing Exxon’s Arctic expertise.

An apparent loser from the pact is U.K.-based BP, which announced a similar agreement with Rosneft early this year only to see it blocked by opposition from BP’s existing Russian partners, a group of Soviet-born billionaires who own half of the TNK-BP Ltd. joint venture.

Exxon’s pact with Rosneft covers the same three Arctic fields that BP had been discussing, as well as other cooperation inside and outside Russia that BP had hoped for. BP declined to comment.

“Exxon’s proposals were better not only than those of BP but also all the others that were made by the world leaders in oil and gas,” Deputy Prime Minister Sechin said, according to Interfax. Rosneft spokesman Rustam Kazharov said the Exxon deal includes more international cooperation and greater up-front investment in the Arctic fields.

The overall value of the Exxon-Rosneft deal wasn’t disclosed, but Mr. Kazharov said total investment would be in the “tens of billions of dollars.” The companies said they envision a $3.2 billion exploration program in the Arctic’s Kara Sea and in the Black Sea. The companies announced the Black Sea agreement earlier this year, putting exploration spending there at $1 billion.

Rosneft and Exxon didn’t comment on the possible size of the Arctic fields, but BP early this year said they could hold as much oil and natural gas as the oil-rich North Sea. Rosneft estimates the Arctic fields hold 4.9 billion barrels of recoverable crude reserves, while the one in the Black Sea has reserves of 1.2 billion barrels.

But the risks in developing the Arctic fields are legion, from ice cover most of the year to the almost complete lack of infrastructure in the area. In addition, Russia’s heavy tax burden also deters much new oil exploration, industry officials say. At the signing ceremony Tuesday, Mr. Tillerson hailed the Russian government’s efforts to reform the tax system, which he said will “help expand cooperation in the difficult environment now in Russia,” Interfax reported.

The new deal also calls for cooperation in the U.S.—with Rosneft possibly getting equity stakes in Exxon projects in the Gulf of Mexico and Texas—as well as possible opportunities for joint development of hard-to-recover oil in Rosneft’s West Siberian fields.

“We have a clear vision for Rosneft’s strategic direction—building world-class expertise in offshore business and enhancing oil recovery,” said Rosneft President Eduard Khudainatov.

Rosneft and Exxon, based in Irving, Texas, have worked together since the 1990s on the Sakhalin-1 project in Russia’s Far East, a venture that Mr. Tillerson worked on at the time. The Sakhalin project has faced years of bureaucratic and other difficulties but has been a success.

In 2003, Exxon was preparing to make a much bigger bet on Russia by taking a large stake in OAO Yukos, then the country’s largest oil company. But just days after Exxon’s then-CEO met Mr. Putin, who was president at the time, to discuss the deal, Yukos founder and CEO Mikhail Khodorkovsky was jailed on charges of tax evasion and fraud. Yukos was later driven into bankruptcy and broken up. Most of its assets were taken over by Rosneft.

Royal Dutch Shell PLC also held talks with Rosneft about exploration in the Kara Sea.

“This is as much a blow to Shell as to BP,” said Peter Hutton, an analyst at RBC Capital Markets. “I think BP knew it was lost, that the opportunity was gone.” But the opportunity remained for other companies “in a package that was available, offered and quantifiable” he said.

“Shell remains keen to work in Russia’s Arctic, as well as on opportunities it has in other Arctic areas such as Alaska,” said a Shell spokesman. He declined to comment on the Exxon-Rosneft deal and had no update on the status of Shell’s talks with Rosneft. Shell CEO Peter Voser said in July that his company was in early-stage talks with Rosneft over Arctic exploration opportunities.

Mr. Putin has sought to lure a global oil giant with offshore expertise and technology in order to develop fields in the Kara Sea and elsewhere. Russia has been attempting to increase its oil production, which has leveled off at about 10 million barrels a day.

(c) 2011 Dow Jones & Company, Inc.

Essentially the Russian Navy boarded a pirate ship and freed some Russian seafarers who had just been captured by pirates.  Then the Russians handcuffed all the pirates to the pirate ship, and blew it up.

***UPDATE***

According to a Telegraph News Report from 2009, the pirates in this video were not, in fact, set on fire and blown up in cold blood by the Russians, but were taken in custody on board the destroyer Admiral Panteleev.  

STX Group will undertake engineering, procurement and construction on a lump-sum turnkey basis for the shipyard, the company said in a statement.

Meanwhile, STX Group said it’s in talks with clients in countries such as Brazil and United Arab Emirates on new shipyard projects.

-By Kyong-Ae Choi, Dow Jones Newswires

The 23-year-old Taymyr yesterday successfully docked at its home port of Murmansk near the Norwegian border after using back-up diesel engines to make its way back from the Kara Sea in the Arctic. The reactor, whose capacity was reduced to 30 percent, was shut down all together for its return.

Bellona was pleased with the candor with which officials handled the incident, even though their earliest reports on leaking reactor coolant had been incomplete.

The vessel was escorted to port by two other nuclear icebreakers, the Rossiya and the Yamal, Rosatomflot officials told a press briefing that they held aboard the stricken Taymyr to allay fears of radiological dangers.

Rosatomflot nuclear fleet chief Vyacheslav Ruksha said the vessel remained safe and attributed the radiation spill to a micro-fracture that resulted in the leakage of 6,000 litres of nuclear reactor coolant.

“We were lucky because this situation developed at the end of the voyage. But we had to change our plans because it was due to set sail for the Arctic in June,” Ruksha told a Murmansk press briefing.

“Now the icebreaker will undergo repairs, and no one knows how long they will last. Practice shows they could stretch between two weeks and two months,” Ruksha said. He also confirmed that this was the second such leak to affect the 21,000-tonne craft in a year.

According to Rosatomflot’s chief engineer Mustafa Kashka, the icebreaker has worked for 136,000 hours, and its operational life span has been extended to 150,000 hours.

“We hope that this incident will not interfere with extending the working resources of the Taymyr to 170,000 to 200,000 hours,” said Kashka. Continue Reading…

The following is video footage of the Taimyr in action breaking ice (another interesting video can be found HERE):