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ARCTIC DEVELOPMENTOPPORTUNITIES

PAAVO LIPPONENAPRIL 2016

APRIL 2016 ARCTIC DEVELOPMENT OPPORTUNITIES 1

· Black carbon emissions seriously threaten the Arctic ice sheet· The melting of the Arctic sea ice to record lows in recent years has prompted many nations, principally those with

an Arctic coastline – US, Canada, Russia, Norway, Denmark, Greenland – to reassess their commitments andstrategic interests

· Ice free summers in the Arctic are expected in a matter of decades, which would open up the region to greatercommercialization, including natural resource exploitation, energy production and shipping

· The Arctic sea ice has slowly declined in the past three decades to the lowest levels in history· Arctic sea ice is younger and thinner, hence more inclined to melt. Less white ice and more dark sea means that

more solar radiation is absorbed, accelerating the thaw

BACKGROUND

Scientist expect a nearly ice-freeArctic Ocean in September before 2050


INTERNATIONAL COOPERATION AND TREATIES

Finlandregards this

as theprimary

cooperationforum on

Arcticmatters

Various UNbodies

promoteinternationalcooperationin importantareas of theArctic, likeUNCLOS

ArcticCouncil UN

Introducesa regional

perspectiveto the more

generalArctic

policies

BarentsEuroArctic

Council

Has aprogram inplace formutualArctic

cooperation

NordicCouncil

Preparesregulationsfor vesselsnavigating

on the Polarseas;

developedthe Polar

Code

IMO

Several international and regional bodies must work together with the Arcticcountries in cooperation to safely meet strategic objectives in the Arctic

EU

Closelyinvolvedwith theArcticregion

through theNorthern

Dimension

Other legal conventions governing the Arctic include the MARPOL Convention and theSpitsbergen Treaty.


STRATEGIC IMPORTANCE

Of nearly 60 large oil and natural gas fields discovered in the Arctic, 43 are inRussia, 11 are in Canada, 6 are in Alaska and 1 is in Norway

90b i l l i o n

700 4,000m i l e s

44b i l l i o n

BARRELS NATURAL GAS44 billion barrels of natural

gas represents 30% ofundiscovered conventionalnatural gas resources.16.5million metric tonnes peryear will be produced at

Total, CNPC and Novotek’sYamal LNG terminal in

Russia

BARRELS OF OIL90 billion barrels of

undiscovered but technicallyrecoverable oil in 25

geographically definedareas, representing 13% ofthe undiscovered oil in the

world

MINERALS DISCOVERED700 various minerals suchas copper, nickel, zinc and

rare earth elements inhundreds of deposits havebeen found in Russia, theUS, Canada and Norway

MARITIME ROUTESMaritime routes betweenAsia and Europe could bereduced by as much as

4,000 miles or 30%compared to the traditional

route through the SuezCanal. The NSR handles

about 1.5 million tonnes ofcargo


STRATEGIC IMPORTANCE

Industries other than fuels and minerals include tourism and fishing, whileresidents of this area and national security play a role in decision making

200ye a r s

8b i l l i o n m 3

8.5m i l l i o n t o n n e s

2.8m i l l i o n k m 2

INTERNATIONAL FISHINGBeyond the 200-mile zones,international waters may beopen to un-regulated fishing,

rich with pollock, salmon,halibut and crab, already

yielding nearly half ofAmerica's seafood catch

and a third of Russia's. 50%of Arctic caught fish are

consumed in the EU

TOURISM IN THE ARCTICIn the past 2 centuries,numerous advances in

transport technologies havecontributed to the growth ofArctic tourism. Currently,

advanced ship technologies,improved marine charts and

navigational aids haveallowed cruise ship travel to

increase exponentially

GROWING STOCKThe Barents region forest is

about 87 million hectaresand annual fellings nearly 48million m3. About 80% of the

forest area and growingstock volume are Russia.

Intensity of forest utilisationis much lower in Russia andNorway than in Finland and

Sweden

STRATEGIC MILITARYOIL PRESENCE

In December 2015, theRussian Vaygach set a new

speed record along theNorthern Sea Route (NSR),

travelling 2200 nauticalmiles in 7.5 days to allow it

to deliver fuel to a number ofports along the NSR for theRussian Ministry of Defense


MINERAL RESOURCES IN ARCTIC COUNTRIES

CANADA• Mining and

mineralprocessinggenerated 3.4%of the nationalGDP

• Canada’s Arcticminerals includediamond, gold,gypsum, ironores, lead, salt,uranium andzinc

USA• 67 million tons

of zinc• 67.6 million

tons of lead

NORWAY• About 80 million

tonns of variousmineralresources

• Northern Norwayand Svalbardaccount for abouthalf of the valueof non-petroleummineralsproduction

• About 1,000million tons ofiron

Mineral resources provide a huge opportunity, both in countries with establishedmining operations and those where new desposits are opening, such as Greenland

RUSSIA• More than 700

minerals have beenfound.

• The estimated valueof the Russianmineral reserves areat 1.5 – 2 TUSD

• Nickel – copper ore,alumina, rare metals,titanium and semi –precious stones,mica, tin, titanium,fossil ivory

• Estimated16 billiontons of phosphorusores

• 687 million tons ofproven apatite oreresirves

• Iron ore reserves of3.2 billion tonsestimated

SWEDEN• 2413 million

tons of ironore

FINLAND• Over 1/8th of

Finland hasbeen designatedfor mining

• Sokli mine has aphosphorusdeposit of 12.4billion tons andother ores

• Estimated 140million tons ofnickel in Kevitsa

• Estimated 150million tons ironin Kolari

• Existing Kittilägold min of 6million ounces


ARCTIC BOUNDARIES

7APRIL 2016 ARCTIC DEVELOPMENT OPPORTUNITIES 7

GEOGRAPHICAL SCOPE

In addition to Russia presenting a revised claim of Arctic Territory to the UnitedNations in February 2016, several other nations are staking claims

· Denmark is attempting to prove that a 1,000-mileundersea mountain range, the Lomonosov Ridge,is linked geologically to Greenland, a semi-autonomous Danish territory

· If it finds such a link, Denmark could make a casethat the North Pole belongs to the Danes

· Canada and the United States could also claim ahuge area, and then face challenges from theother Arctic nations

· Ilulissat Declaration· US maintains that the NW passage is an

international strait with free navigation rights, whileCanada says its an inland waterway over which itmaintains exclusive jurisdiction

· Washington and Ottowa also disagree on theirmaritime boundary in the resource rich Beaufort Sea


ICEBREAKERS AS A STRATEGIC NECESSITY

CANADA7 ICEBREAKERS IN CANDADIA COASTGUARD1 IN ROYAL CANADIAN NAVY1 COMMERCIAL

USA2 HEAVY ICEBREAKERS

DENMARK3ICEBREAKERS

RUSSIA41ICEBREAKERS

CHINA2 POLAR RESEARCH

INSTITUTE1 COMMERCIAL

FINLAND7 ICEBREAKERS1 UNDERCONSTRUCTION

SWEDEN5 SWEDISH MARITIMEADMIN3 TRANS-VIKING

NORWAY3ICEBREAKERS

INDIACOMMISSIONING FIRST

COMMERCIALICEBREAKER FOR

COMPLETION IN 2017


· Two sea routes through the Arctic: the Northwest Passage and the Northeast Passage· The Northern Sea Route (NSR) is a shipping lane across the rim of Siberia, connecting the Atlantic to

the Pacific· Shanghai to Hamburg through the NSR reduces the shipping distance by 30% versus the traditional

route through the Suez Canal and avoids waters at risk for piracy· Only 4 cargo vessels sailed the whole route in 2010, 46 in 2012 and up to 71 in 2013

– 17000 ships pass through the Suez Canal annually· Possible increase in the Northwest Passage, above North America from Alaska through the

Canadian Arctic Archipelago, which would decrease the length of the route by several dayscompared to the Panama Canal

SHIPPING

As the Arctic ice cap retreats, shipping lanes are opening, that could rival orcomplement conventional routes during the summer months

10APRIL 2016 ARCTIC DEVELOPMENT OPPORTUNITIES

· The Danish Nordic Orion became the first bulk carrierto traverse the Northwest Passage in 2014, savingaround 80 000 USD in fuel costs. But this route ismuch less potential than the NSR

· Opening the North-East Passage will increase theimportance of the Bering Straits in the future.Similarly, the North-West Passage may beincreasingly used for shipping in the long term

10

INVESTMENTS IN PORTS AND TERMINALS

Novy PortGAZPROM

76 BUSD

15%3

1 SabettaPort

NOVATEK

2

Free port

VLADIVOSTOK

4

Free portZARUBINO

5

1) Gazprom’s Novy Port: build with the capacity to handle up to 8.5 million tons of crude oil annually from the nearby Novoportovskoye oil and gasfield. Testing of the port is scheduled to begin early this year.2) Novatek’s Sabetta Port is where the long-planned Yamal LNG project is scheduled to come online in 2017, with 16.5 million tonnes / year LNG tobe shipped eastward along the Northern Sea Route on Korean-built, Chinese-owned Arctic-class LNG tankers, with an expected cost of 25 BEUR.3) China and Russia have signed an MoU to study how to achieve 10 - 15 % transit cost reductions along the NSR4) The China – Russia MoU is also planning Primorye-1 is a maritime route that will extend through the Sea of Japan from Harbin, China overland tothe Russian port of Vladivostok5) Primorye-2 will go from Hunchun, China overland to the port of Zarubino, Russia, from where onward shipments by sea to China will be possible.This represents a practical coupling of the Silk Road and the Eurasian Economic Union.6) China’s state-owned, €36 billion Silk Road Fund, whose goal is to develop the “One Belt, One Road” project, received a 10% stake in the YamalLNG project in exchange for a 700 million euro loan.7) 40 Chinese insurance companies and asset managers raised €5.5 billion to establish a new fund called China Insurance Investment Limited, whichwill finance energy and infrastructure projects overseas8) Investment by Statoil and the Norwegian government into Snohvit, a complex being built to receive natural gas piped from the Barents Sea andliquefy the gas for shipping.9) OmniTrax estimates it has spent €46 million modernizing the port to accommodate big ships carrying exports like grain and farm machinery toMurmansk, and incoming Russian products, including fertilizer and steel.10) The Russian Defense Ministry has ordered a pilot project for a mobile low-power nuclear station compatible for the Arctic by 2020, with demandfor about 30 such units.11) Archangelsk port to raise capacity to 100 000 dwt ships, to become a strategic logistics hub

10%6

OMNITRAXHudson Bay 8.8

BUSD8

9 10KOLANUCLEAR

POWERP L A N T

APRIL 2016 ARCTIC DEVELOPMENT OPPORTUNITIES

ARCHANGELSK

11

11

INVESTMENTS AND DEVELOPMENTS

1.2MIL KM2

1.1MIL KM2

35PERCENT

TERRITORY CLAIMSRussia has submitted vastterritory claims to the UN ofover 1.2 million km2 of Arcticsea shelf extending 650 kmfrom shore

SEA – ICE MAXIMUMThe annual maximumreached an all time low of 1.1million square kilometersbelow average in 2015

OIL & GASDEMANDExpected to increase by35% by 2035, outweighingthe initial investment costs

CHINESE LOANSTo Russia to build an oil pipelinefrom Siberia to China and todevelop Arctic oil fields

RADIO COVERAGERadio Holland has expandedcoverage from the Kara,Norwegian and Barents Sea

AFRAMAX TANKERA modern tanker designed fortransporting crude oil in theArctic has been developed byFinnish companies

MAJORITY INTERESTFinnish Industry Investmentpurchased on a 66.4 % majoritystake of the shares of Aker ArcticTechnology

78BEUR

66.4%

118Kdwt

If only the most northern regions of Europe are taken into account, the ongoingand planned investments for this decade total over 100 billion euros


INVESTMENTS AND DEVELOPMENTS

58.8BEUR

260MEUR

50MEUR

RUSSIAN STRATEGYState investments mayamount to €13.8 billion withan additional €45 billion inprivate investments intelecom, mining and othersectors within this decade

FINNISH RAILINVESTMENTLinking the mining region withnorthern Norway and theBarents Sea

DANISH CLAIMSDenmark filed a claim for theterritory of approximately895,541 square kilometers ofthe Arctic seabed after 12years of research and over$55 million worth ofinvestments

GAZPROM YAMALComplex development in the Yamalpeninsula will cost Gazprom 170million rubles (2.2 MEUR) by 2030

ROSNEFTBy 2022, Rosneft will have invested250 BeUR, mainly developing oilfield in the Siberian Arctic

CHINESE STRATEGYIn Canada, Chinese firms haveacquired interests in two oilcompanies that could afford themaccess to Arctic drilling

SEA ROUTESTwo sea routes through the Arctic:the Northwest Passage and theNortheast Passage

2.2MEUR

250BEUR

CHINA

2

Investment will depend on global commodity prices, exploration and productiontechnologies, geographic access and infrastructure, legal and political climates


ARCTIC POLICY

Each country which claims a stake in the importance and value of the Arctic hasoutlaid their own policy objectives with various priorities

MILITARYINFRASTRUCTURE

Russian Northern Fleet will deploymilitary infrastructure in most of the

archipelagos and islands of theArctic Ocean on the borders of

Russia

DEVELOPMENTShip voyages to Franz Josef Land,

Severnaya Zemlya, NovosibirskIslands and Wrangel Island are

planned

MILITARY & MARITIMENorthern Fleet actions are not onlymilitary, but also serve to ensuremaritime economic activities in

Russia in the Arctic and the NorthernSea Route as a national transport

route

INCREASE INVESTMENTNew steps to accelerate the

acquisition of additionalicebreakers to ensure the US canoperate year-round in the Arctic

SAFE MARINE OPERATIONSThrough mapping and charting

efforts in the Bering, Chukchi andBeaufort Seas regions

MARINE BIODIVERSITY3 sampling cruises in 2015 as part of

a 5-year demonstration project togather data about birds, mammals

and water-columns, microbes,plankton, sediment and fish

RESOURCESSees the great potential for

economies of Germany and Europethat Arctic resources hold

ENVIRONMENTStresses the importance of

protecting the Arctic enviornmentand the establishment of protectedareas to maintain Arctic biodiversity

USA GERMANYRUSSIA

FREEEDOM OF NAVIGATIONIn accordance with high safety and

environmental standards


ARCTIC POLICY

The tone of the policies in various countries and regional bodies differs, rangingfrom ’safety and sustainability’ to ’investments and opportunity’

CLIMATE CHANGE & THEENVIRONMENT

The EU stresses the importance ofstrict compliance with stringent

environmental standards to avoiddamage to this sensitive region

INCLUSIVE DIALOGUEConstructive engagement with Arctic

States, indigenous peoples andother partners

SUSTAINABILITYWill publish a new communication on

economic development with focuson the sustainable use of resources

and environmental expertise

INVEST & COLLABORATETo gain access to the Arctic byinvesting and joining with localcompanies and financing good

works to earn good will

MULTINATIONAL RESEARCHUsing own icebreakers for joint

scientific research

ICELAND & GREENLANDEconomic agreements, covering

geothermal energy and free trade.Financing the development of minesand discoveries of gems or minerals.

ARCTIC EXPERTISEExpertise in energy efficiency and

renewable energy sources

CHINA FINLANDEU

TOURISMTo cherish natural scenery,

environment and the uniqueness ofthe local culture

CROSS BORDER DIMENSIONAs the costs of any investments will

be extremely high, the transportsystem must be addressed in a

comprehensive way


ARCTIC COUNCILNew Arctic Policy with strategicpriorities as Chair of the Arctic

Council from 2017 – 2019

ARCTIC COUNCILChina is an observer member of the

Arctic Council

15

OTHER ARCTIC POLICIESCANADAHolds large land and sea areaswhere it underlines its sovereignty.Plays an important role in theArctic council and leads Arcticresearch.Canada began patrolling the mostremote Arctic reaches with armyrangers and plans to launchRadarsat 2, a satellite system thatwill allow surveillance of the Arcticand sea approaches as far as1,000 miles offshore

USACurrent chair of the ArcticCouncil 2016 – 2017.The United States the Senatehas refused to ratify theConvention of the Law of theSea. This means the UnitedStates has not been able toformally stake out itsunderwater boundaries

DENMARKBecause ofGreenland,Denmark has asignificantposition in EUArctic issues.

RUSSIASocio-economic development, advanced ICT infrastructure,environmental safety, international cooperation, assurance ofmilitary security and defense of the state bordersRussia signaled its ambitions already in 2007 when it senttwo submersibles 14,000 feet down to seabed beneath theNorth Pole and planted a titanium Russian flagArctic policy administration has now been restructuredto fall under the duties of the Deputy Prime Minister

SWEDENPriorities include climate, environment, economicdevelopment and the human dimension.Infrastructure developments and mining, e.g. Kiruna,where railroads and energy infrastructure (mainlywind) are being developed

ICELANDUnderlines theimportance ofregional andmultilateralcooperation.

CHINAChinese mining companies have proposed buildingrunways for jumbo jets on the ice in Greenland’s farnorth to fly out minerals until the ice melts enoughfor shipping.Investing actively in North-Western Russia, witha focus on natural resource exploitation


NORWAYHeavy on-shore infrastructure investment,including ports and roadsUniversity of Tromsa developed into agrowing research and educational centerOff-shore oil and gas developmentsArctic Economic Council secretariatlocated in Tromsa

16

STRATEGIC FINNISH OBJECTIVES – THE NORTHERN DIMENSION

Finland has several levels of strategic objectives for their increased involvement inArctic affairs, importantly the cooperation in Northern Dimension

• Business opportunities in miningtechnologies and increasing transportvolumes

• Enhance Finland’s international imagefor sustainable management of highquality raw material and forestry

• Identify Finland as a global logisticshub with connections through theAtlantic, Arctic and Central Europethrough investments in cables,communications, data and rail

• Promote investment in Finland throughemphasis on Finland’s expertise inenergy efficiency and operating in coldclimates

• Attract foreigninvestments ingrowing miningindustry

• Lapland’s geographiclocation is ideal forsatellite reception,and may serveinvestments in theArctic ResearchCentre of the FinnishMeteorologicalInstitute

• Nordic labour market inLapland, with strategicobjectives related totourism, renewableenergy sources, landuse, mining operations,transport andindigenous peoples

• The forest sectorcreates opportunitiesfor small-to-mediumenterprises

INTERNATIONAL NATIONAL REGIONAL


FINNISH OPPORTUNITIES

Finland’s position may prove essential to transport routes both on land and at seafor the transfer and delivery of natural resources, fuel sources and equipment

S H I PB U I L D I N G

There will be a greatdemand foricebreaker expertise.Finland has expertisein winter navigation,maritime industry andice-breakers, as wellas expertise inmechanical oilrecovery in icyconditions

F O R E S T R Y

The total forest areaof Lapland is 9 milha, of which 4 millionis actively managed.The forest sector andtimber industriesemploy 3,200 peoplein Lapland alone,accounting for alarger percentage ofoverall activity thanin the rest of Finland

A R C T I CC O U N C I L

C H A I R

Finland will assumeArctic Councilchairmanship in2017. Finland wouldalso have a clearrole in the EU Arcticpolicy. Nearly 1/3rdof the people livingnorth of the 60thparallel are Finns

A R C T I CE X P E R T I S E

Expertise in mining,energy and othersectors will beinvaluable to thefurther developmentin the Arctic. Finlandhas the opportunityto offer advisoryservices, machineryand invest in thediscovery of oil, gasand minerals

N O R T HD I M E N S I O NP A R T N E R S H I P

TEN-T core networkcorridor “North Sea-Baltic” starts fromthe ports of Belgiumand Netherlands ofthe North Sea andpasses throughGermany andPoland and stretchesuntil the Baltic Statesand Finland


FINNISH OPPORTUNITIES

To date, Finland’s involvement in Arctic development has been limited to policyadvisory and education and research initiatives, not commercial development

19

E N E R G Y

The Arctic region needs newelectricity transmission lines,de-centralised energyproduction and linesbetween Norway andRussia need to beupgraded. Thisenvironmental stress willoffer opportunities to theFinnish clean-techcompanies engaged in thisline of business as well

T E L E C O M M

Lapland’s geographiclocation is ideal for satellitereception, and may serveinvestments in the ArcticResearch Centre of theFinnish MeteorologicalInstitute. This could beused in partner with otherresearch initiatives, as wellas for safety improvementinitiatives

E D U C A T I O N

The Nordic Mining School, jointlylaunched by the Universities of Ouluand Luleå. 2011–2016 Green MiningProgramme launched by Tekes, theFinnish Funding Agency forTechnology and Innovation, Tekes'sArctic Seas Programme, Ministry ofEmployment and the EconomyDevelopment Programme for theMaritime Industry for 2014–2016 andthe Academy of Finland ArcticResearch Programme 2014–2018

C O O P E R A T I O N

Since Russia is the mainmarket for Finnish Arcticenergy expertise,exports necessitateclose cooperationbetween Finnish andRussian companies


SECURITY ISSUES IN THE ARCTIC

The far northern Arctic Ocean belongs to no country, though most of the resourcesare in an area which is already clearly carved up

BOUNDARYDISPUTESIn a place where exact boundaries werenever much of a concern, haggling overborders has begun among the primarynations

MILITARYPRESENCE

Russia and Canada have both recently madeclaims to the UN for review to extend theboundary to which they claim access toresources on the continental shelf. Countriesoutside of the Arctic, such as China, aresecuring rights to access through investmentsand collaboration.

The various capabilities of the DefenseForces play an important part in supportingcivilian safety and rescue authorities insearch and rescue operations and themitigation of the effects of potential naturalcatastrophes and environmental damage.

Coastal States have upgraded their maritimesurveillance and military capabilities as wellas the frequency of exercises in the region.


INVESTMENTS IN RUSSIA AND FINLAND

Russia’s investment targets oil, gas, mining and military, as well as a nuclear powerplant. Finland has mostly plans, with available space in Kemintulli and Kromilaaksoand Simo-Karsikko industrial areas in Lapland, as well as a push for tourism

FINLANDPrioritizing education and

training for the Arctic regionas an opportunity to push theFinland brand, tourism, andlocal employment through

industry and energy

NUCLEAR POWER2020

DEFENSE MINISTRYPILOT POWER

STATION BY 20201.2MILLION KM2OF NEWTERRITORIALCLAIMS TOTHE UNITEDNATIONS

8.5MILLIONTONS OILATSABETTAPORT

170BILLIONUSDTODEVELOPYAMALPORT

270BILLION USDTO DEVELOPOIL FIELDSBY ROSNEFT

BY 2020, GENERATE

2,500MWINLAND WIND POWER AT

3.5 BEUR 15BILLION EURINDUSTRIALINVESTMENTSIN LAPLANDWITHIN THENEXT DECADE

€1BILLIONINVESTMENTS INTOURSIM INLAPLAND

130BEURINVESTMENTS IN THEEUROPEANHIGH NORTHIN THE NEXT10 – 15 YEARS

1 BUSDINVESTMENT INSOKLI MINEPROJECT INLAPLAND TOMINEPHOSPHORUS

RUSSIAVery active in the Arctic,developing drills, ports,

icebreaking capabilities andexploratory efforts.

DEFENSE MINISTRY INSTALLEDRADAR DETECTORS AND JET

FIGHTERS IN THE ARCTIC38,000

TROOPS PARTICIPATED IN THEARCTIC WAR GAMES

S-400MISSILE DEFENSESYSTEM DEPLOYED INTHE ARCTIC INDECEMBER WITH MOREDEPLOYED IN 2018


RUSSIA’S CLAIM OVER ARCTIC AND NORTH POLE

Russia has re-submitted its petition to the UN claiming exclusive control over 1.2km2 of the Arctic sea shelf.· This is the second time Russia has staked its claim to what it sees as its territory. Earlier in 2002, the UN rejected the

bid on lack of evidence· According to the 1982 UN Convention on the Law of the Sea, a nation may claim an exclusive economic zone up to

only 200 nautical miles from their recognized borders, unless it can prove continental shelf on which it sits extendsbeyond in which case the zone is extended to 350 miles

· Russia claims area even beyond that. This would include the North Pole and give Russia access to an estimated 4.9billion tonnes of hydrocarbons. Its claim includes the Mendeleev Rise as well as the Lomonosov Ridge, whichDenmark and Canada also claim. Russia says these and the North Pole are part of the Eurasian continent.

· Russia has over the last decade conducted nine expeditions to the Arctic to mapthe ocean floor over tens of thousands of kilometers and substantiate itsterritorial claim

· If the new proposal is accepted by the UN commission, Russia would not onlygain the right to the mineral deposits but also be able to expand its frontiers

· Russia lays claims to the Lomonosov Ridge, Alpha Ridge and Chukchi Cap, andto the Podvodnik and Chukchi Ocean Basins separating them.

· Russia has begun militarising the region by restoring some of the military basesin the islands and outposts in the Arctic, calling it a move to protect the crucialshipping routes

· The Laptev Sea, as has already been proven, has a diamond canal on thesurface of its shelf, which will allow Russia to become even more competitivewith other countries in the production of diamonds

· Denmark, Canada, Norway and the U.S. are also laying claims to sometimes-overlapping territories under the Arctic Ocean


CHALLENGES AHEAD

Despite the many opportunities that the Arctic region may offer, there are manyhurdles to be overcome on the path to profits - and developments take time

H A R S HE N V I R O N M E N T

Even during thesummer, the harshenvironment makesnavigation difficultwith unpredictableweather and icefloes. Technologyand expertise in oilspill cleanup andsearch and rescueneed to besignificantly improved

I C E B R E A K E RE S C O R T

Ships may require anicebreaker escort(approximately 400000 USD) andadditional insurancethat offset some ofthe routes potentialfuel savings

T I G H TS C H E D U L E

Container shipping,which operates on atight deliveryschedule, may notbe able to utilize thisroute if some of thepassage is not open

T E L E C O M M

There is a greatneed to developtelecommunicationsincluding satellites tomake conditionssafe in the Arctic.

R U S S I A NC O N T R O L

Moscow controlsmost of the NSR andthe attendanticebreaking fleet,requiring closecommunication andcooperation withgovernmentadministrations inRussia


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ARCTIC DEVELOPMENT OPPORTUNITIES - poyry.fi · be shipped eastward along the Northern Sea Route on Korean-built, Chinese-owned Arctic-class LNG tankers, ... APRIL 2016 ARCTIC DEVELOPMENT