Russia’s state-run nuclear energy company Rosatom and Dubai-based logistics firm DP World have agreed to establish a joint venture to develop the Northern Sea Route as a viable shipping route between Asia and Europe.
The joint venture intends invest in, build and operate transport and logistics capacity, including for containers, through the Arctic route.
A record 33 million tons was carried along the NSR in 2020 and Russia has targeted 80 million tons by 2024. Rosatom has previously said that establishing the NSR as a viable sea route, including the development of ports and transport links along Russia’s north coast, would require $11.7 billion in investments.
Using the Northern Sea Route shortens the distance between Northwest Europe and East Asia compared to going through the Suez Canal and can shave up to 19 days off voyages and reduce CO2 emissions.
In a statement, Rosatom said the partnership is seeking to test container shipping, a sector that has so far been hesitant and unwilling to head north due to risks related to its remoteness, lack of infrastructure and environmental impact. MSC Mediterranean Shipping Company earlier this year reaffirmed its commitment not to use the NSR after the Ever Given became stuck in the Suez Canal, sparking conversation about alternative trade routes. Although Maersk tested the NSR route once in 2018 on a one-off voyage, the company has no plans to use the NSR as an alternative for East-West trade.
“Building of sustainable transport infrastructure in the Arctic opens up new opportunities in developing the Eurasian transit which can be achieved in an optimal timeframe and help reduce the environmental footprint through shorter route distances and the advanced low-carbon energy solutions applied. Today is an important step in the development of a strategic international partnership between ROSATOM and DP World,” said Alexey Likhachev, General Director of Rosatom.
“As the leading provider of worldwide, smart, end-to-end supply chain logistics, DP World supports Russia’s efforts to diversify trade flows between Asia and Europe,” said Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World. “The Northern Transit Corridor holds out the prospect of shorter transit times between East and West. DP World has already committed to invest $2 billion with the Russian Direct Investment fund, and we will continue to work with our partners in Russia to find solutions that allow the Northern Transit Corridor to develop sustainably.
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