November 8, 2012 / 4:46 PM / 7 years ago

Gazprom tests LNG trade route via Arctic waters

LONDON, Nov 8 (Reuters) - The trading arm of Russia’s Gazprom is testing a new liquefied natural gas (LNG) trade route between Europe and energy-hungry markets in Asia as shrinking sea-ice opens Arctic waters to marine traffic.

Gazprom is sending the LNG tanker Ob River from the world’s northernmost liquefaction plant in the Barents Sea to Japan, a voyage to test the feasibility of cutting transit times to Asia, which would boost Russian plans to build an LNG plant in the Arctic.

The route is currently open only four months of the year.

The vessel, chartered by Gazprom from Greek owner Dynagas, loaded at Norway’s Snoehvit LNG plant in the Barents Sea this week and is heading to Asia, a source with knowledge of shipping schedules said.

Another source said Gazprom purchased the cargo from Germany’s RWE, which owns production capacity at Snoehvit.

Asia is the world’s top importer of LNG, and the Northern Sea Route offers traders a chance to shave nearly three weeks off voyage times from Snoehvit to Japan.

Norwegian LNG bound for Asia currently takes a roundabout course down through the Mediterranean, incurs charges when transiting the Suez Canal and exposes tankers to piracy risks in the Gulf of Aden, before the final leg of its journey brings it to Asia.

A successful expedition may also help support the development of new but costly LNG production plants such as Yamal in the Russian Arctic by improving their prospects of accessing the world’s highest-paying market. (Reporting by Oleg Vukmanovic; editing by Jane Baird)

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