Kremlin Prioritizes Commercial Considerations in Arctic Safety Dispute

The serious violation of Arctic shipping safety rules by Yamal LNG carrier Boris Vilkitsky last month has escalated a growing conflict about the regulation of and control over the Northern Sea Route (NSR).

The widening rift involves Rosatomflot, operator of Russia’s icebreaker fleet, on one side and the Ministry of Transportation via its Northern Sea Route Administration (NSRA), on the other side. While the former aims to prioritize commercial considerations, the latter wishes to uphold existing safety standards along the route.

Following the safety violation the Boris Vilkitsky was detained in the Port of Sabetta for more than a week and was only permitted to leave after direct intervention by the Kremlin. The dispute between the agencies has affected the smooth operation of Russia’s largest Arctic natural resource project prompting a harsh rebuke by President Putin directed at Northern Sea Route Administration officials.

“Gas carriers are not allowed into the port under far-fetched pretexts, then they do not let them depart. This will be dealt with separately,” President Putin stated during a meeting with members of the Council of Legislators.

NSRA versus Rosatomflot

The struggle for control over the NSR has been simmering below the surface for at least the past two years since the Russian government put forth various plans to reorganize the route’s competencies.

Currently, the NSRA manages the growing traffic on the route and its primary functions are related to its safe operation, including issuing of permits to commercial vessels. Rosatomflot, a government-owned corporation, operates the country’s fleet of nuclear icebreakers and benefits financially from escorting vessels through the waters of the NSR.

Under the proposed structure responsibilities for the route would be consolidated either under the umbrella of Rosatomflot or the Ministry of Transport, with the former currently favored by the Russian government.

“This looks like a very hard battle between different agencies and personalities. Large sums of money in the form of state investments and subsidies are involved,” explains Arild Moe Senior Research Fellow at the Fridtjof Nansen Institute.

Boris Vilkitsky escalates existing conflict

The conflict between the two agencies escalated last month when the LNG carrier Boris Vilkitsky, operated by Dynagas LNG Partners, entered the NSR despite damage to one of its three engines. The malfunction reduced the vessel’s ice capabilities from Arc7 to Arc4 and made it illegal for the vessel to enter the route.

The flaw was known to the vessel’s captain, Dynagas LNG Partners, and Rosatomflot before it entered the route, but was concealed from NSRA officials and the port authorities in Sabetta. Officials called the incident a gross violation of NSRA rules and “a threat to the safety of navigation, as well as the protection of the marine environment.”

NSRA officials only became aware of the damage when the vessel experienced difficulties navigating in heavy ice en route to Sabetta while being escorted by the Rosatomflot icebreaker Taimyr.

Following the arrival of the vessel in Sabetta officials uncovered a host of additional violations, including the absence of accurate ice charts and the lack of required ice navigation experience by the captain and crew. Dynagas LNG Partners did not respond to requests for comment on its apparent lack of safety culture.

The Boris Vilkitsky remained in port for more than a week before it was permitted to leave upon intervention by the Kremlin. Even under escort by Russia’s most powerful nuclear icebreaker 50 Years of Victory it took almost a week to get the vessel out of the ice-covered waters of the NSR.

Kremlin sends clear signal

With its intervention the Kremlin sends a clear signal that obstacles or delays in the development or transport of LNG from Yamal will not be tolerated. Putin called actions by the NSRA a “fictitious pretext for constraining development.”

Similarly, Rosatomflot says that existing ice class requirements are too restrictive and will have to be revised from Arc7 to Arc4 or Arc5.

“Otherwise, Rostomflot will have to cease the escort of Arc4 and Arc5 vessels even under average type of ice conditions, which will damage commercial projects, including Yamal LNG, and the delivery of products to Norilsk,” explains Rosatomflot’s General Director Vyacheslav Ruksha.

The question whether Russia will prioritize commercials considerations over safety requirements will only gain further prominence as hundreds of voyages by LNG carriers will be needed every year once Yamal LNG reaches its full capacity of 16.5 million tons by 2021.

Rosatomflot compromised safety of the NSR

The incident shows that Rosatomflot is willing to circumvent safety regulations in pursuit of rapid economic development. Safety rules, as outlined by the NSRA’s “Rules of Navigation for the Waters of the Northern Sea Route” may be incompatible with the need to rapidly increase traffic and maximize economic development surrounding the exploration of natural resources, such as Yamal LNG.

According to Ruksha the reduction in ice class from Arc7 to Arc4 did not affect the safety of the Boris Vilkitsky but merely reduced its speed. Even with reduced propulsion the first-year ice encountered in the Kara Sea represented no risk to vessel’s hull, which remained at a category Arc7, he explained.

However, questions remain surrounding Rosatomflot’s failure to share the vessel’s malfunction with the NSRA. As the company directly profits from escorting commercial vessels through the route, safety considerations may not be its primary concern.

This argument gains further traction in light of the fact that Rosatomflot has repeatedly asked the Ministry of Transport to reduce the required ice class along the route to boost shipping volumes and thus directly bring in more business, explains Mikhail Voytenko, editor of Maritime Bulletin.

As the incident surrounding the Boris Vilkitsky shows, the NSRA lacks the clout to monitor and enforce the safety of navigation on the NSR. Furthermore, Novatek, the operator of Yamal LNG, and Dynagas LNG Partners, the operator of the vessel, have remained on the sidelines and have failed to speak out publicly on the importance of safety regulations.

If Rosatomflot emerges victorious from the battle to reorganize control over the NSR under its leadership, safety may take a further backseat.