Energy Companies Try Arctic Shipping Shortcut Between Europe and Asia
By Eric Yep
Japanese and South Korean energy companies have begun shipping oil products through the Arctic’s melting ice—adding credibility to a route that could slash costs while avoiding risks associated with ferrying cargo through the Suez Canal.
The ships are taking the so-called Northern Sea Route, traders and shipbrokers in Singapore said, a shortcut between Asia and Europe along Russia’s Arctic Ocean coast. This marks the first time oil-derived products have been moved in such large volume through what maritime explorers of centuries past dubbed the Northeast Passage.
There have also been shipments by this route of gas condensate—a form of hydrocarbon—and iron ore in the past couple of years, and last year Russian gas giant Gazprom, OGZPY -0.50% in a test run, sent a load of liquefied natural gas to Japan. Earlier this month, Chinese shipper Cosco sent a container vessel from China to Europe along the route, which it said would not only cut shipping costs and carbon emissions, but also bring it closer to Western markets and foster economic development in Chinese coastal areas.
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