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LNG ship heads to Japan via the Arctic Ocean

November 27, 2012

A large tanker carrying liquified natural gas (LNG) is set to become the first ship of its type to sail across the Arctic. The ship left Hammerfest in the north of Norway on 7 November and will traverse the eastern arctic to Japan (via the northeast passage).

The specially equipped tanker named the Ob River has a strengthened hull.  Ob River can carry up to 150,000 cubic metres (about 63,668 mt or 3.1 Bcf) of LNG. The LNG-tanker will be escorted by Russian nuclear powered icebreakers for most of the route along the north coast of Siberia.

The ship is due to arrive in early December and will shave 20 days of the normal voyage. The trip will save 40% of the distance, and 40% less fuel. Nineteen thousand ships went through the Suez canal last year; around 46 went through the northern sea/Arctic ocean route.

Demand for liquefied natural gas is high in Europe and Asia, where the fuel costs $10 to $16 per million British thermal units—far more than the $3.70 it fetches in the U.S. The U.S. is awash in natural gas, so much so that prices have fallen to historic lows and inventories are well above their five-year average. In fact, the price is so low that many energy companies no longer consider it profitable to drill. Unfortunately the US has only one small 40 year old LNG export facility at Nikiski, Alaska.

The Statoil LNG Facility at Hammerfest produces 4.2 million tonnes per annum of LNG.


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